More Sandy Price-Gouging Actions on East Coast

ALBANY, N.Y.-- New York StateAttorney General Eric T. Schneiderman has announced that his office has notified 12 gas station operators of his intent to commence enforcement proceedings against them for violations of the New York State Price Gouging statute in the wake of Hurricane Sandy.

The AG's office sent notification letters to 13 gas stations earlier this month, bringing the total number of targeted retailers so far to 25 (see Related Content below for previous CSP Daily News coverage).

Schneiderman said there will be other notifications coming as the investigation into consumer complaints continues.

The actions are based upon a review of both consumer complaints and independently gathered pricing information.

Eric SchneidermanAmong the current batch of 12 enforcement targets is a Mobil station in the Bronx where--according to the AG's office--a consumer waiting in line for over an hour was just three cars from the pump when she was told that she would be charged $50 for five gallons of gasoline--$10 per gallon. In contrast, stations nearby were charging $3.95 a gallon.

At a second location, a Coastal station in Port Jefferson Station, a consumer reported being charged $4.69 per gallon of gasoline while neighboring stations were charging between $3.69 and $4.05. One consumer waited in line for over an hour and did not see a sign detailing prices until after the attendant began pumping gasoline for the customer.

The stations receiving notices include:

Suffolk

• Coastal, Port Jefferson Station. (Consumer complaint: 4.69 per gallon for regular grade gasoline).

Nassau

• BP, Farmingdale (Consumer complaints: $4.71 per gallon).
• Liberty Petroleum, Elmont (Consumer complaint: $6.99 per gallon).
• Ultra, Levittown (Consumer complaint: $4.89 per gallon).

Staten Island

• Rio, Staten Island (Consumer complaint: $4.89 per gallon).

Queens

• Getty, Flushing (Consumer complaint: $4.99 per gallon).
• Gulf, Maspeth (Consumer complaint: $4.79 per gallon cash, $4.89 per gallon credit).
• Shell, East Elmhurst (Consumer complaints: ranging from $4.89 to $7.90 per gallon).
• Sunoco, Ridgewood (Consumer complaint: $7.25 per gallon).

Bronx

• Mobil, Bronx (Consumer complaint: $10 per gallon).

Westchester

• Mobil, Katonah (Consumer complaint: $4.79 per gallon).
• Mobil, Spring Valley (Consumer complaint: $4.65 per gallon).

New York State's Price Gouging Law prohibits merchants from taking unfair advantage of consumers by selling goods or services for an "unconscionably excessive price" during an "abnormal disruption of the market." The price gouging law covers New York State vendors, retailers and suppliers, including but not limited to supermarkets, gas stations, hardware stores, bodegas, delis and taxi and livery cab drivers.

The law does not specifically define what constitutes an "unconscionably excessive price; however, the statute provides that a price may be "unconscionably excessive" if the amount charged represents a gross disparity between the price of the goods or services which were the subject of the transaction and their value measured by the price at which such consumer goods or services were sold or offered for sale by the defendant in the usual course of business immediately prior to the onset of the abnormal disruption of the market.

A "before-and-after" price analysis can be used as evidence of price gouging. Evidence that a price is unconscionably excessive may also include proof that "the amount charged grossly exceeded the price at which the same or similar goods or services were readily obtainable by other consumers in the trade area"; however, a merchant may counter with evidence that additional costs not within its control were imposed for the goods or services. Notably, the price gouging law does not prohibit any disparity between the price charged before and after there is an abnormal disruption of the market. Rather, the statute prohibits a "gross disparity," when it is clear that a business is taking unfair advantage of consumers by charging unconscionably excessive prices and increasing its profits under severe circumstances that call for shared sacrifices.

In New Jersey, Governor Chris Christie, State Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs have announced a second round of price gouging lawsuits, against 10 businesses accused of illegally overcharging consumers during the Hurricane Sandy state of emergency. The AG's newest lawsuits include seven hotels and three gas stations:

• Jenny's Shell Station LLC, Bloomfield. This station allegedly raised the price for cash sales of regular gasoline from $3.70 per gallon to $4.50 per gallon, an increase of 22%, during the state of emergency. The company also allegedly raised the price for cash sales of plus-grade gasoline and V-Power gasoline by 18% and 17%, respectively. It also allegedly violated the price gouging law by increasing its markup from cost for regular gasoline by 23%. The Division of Consumer Affairs received complaints from approximately 12 consumers about this company.
• Empire Oil LLC, dba Delta, North Bergen. This station allegedly raised the price for cash sales of regular gasoline from $3.40 per gallon to $4.10 per gallon, an increase of 21%, during the state of emergency. The company also allegedly raised the price for cash sales of supreme-grade gasoline by 22%. It also allegedly violated the price gouging law by increasing its markup from cost by as much as 14%, after receiving shipments of fuel on Nov. 2 and 3. The Division of Consumer Affairs received complaints from approximately 10 consumers about this company.
• Shiv Shivam Inc., dba Lukoil, Piscataway. This station allegedly raised the price for cash sales of regular gasoline from $3.49 to $4.50 per gallon during the state of emergency while the cost to the station for regular gasoline increased by only seven cents per gallon. The business allegedly violated the price gouging law by raising its markup from cost for regular gasoline by 17.5%. The Division of Consumer Affairs received complaints from approximately 16 consumers about this company.

New Jersey's price gouging statute prohibits excessive price increases during a declared state of emergency or for 30 days after the termination of the state of emergency. Excessive price increases are defined as more than 10% higher than the price at which merchandise was sold during the normal course of business prior to the state of emergency. If a merchant faces additional costs during the emergency, prices may not exceed 10% above the normal markup from cost.