NJ Files Six More Hurricane Sandy Price Gouging Lawsuits

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New Jersey Attorney General Jeffrey S. Chiesa

New Jersey Attorney General Jeffrey S. Chiesa

NEWARK – State Attorney General Jeffrey S. Chiesa and the State Division of Consumer Affairs have filed suit against five more hotel operators and one more gas station, alleging that each excessively raised prices during the declared state of emergency for Hurricane Sandy and illegally gouged consumers.

The six filings are the third group of lawsuits brought by the Attorney General and Consumer Affairs following investigations of complaints filed by consumers. The state has filed suit against a total of 24 New Jersey businesses – 13 hotels/motels and 11 gas stations – for alleged price gouging in connection to Hurricane Sandy.

“We allege that these hotel owners broke our price gouging law, at a time when vulnerable consumers desperately needed the most basic of necessities – shelter,” Chiesa said. “There is no excuse, legally or morally, for businesses trying to gouge consumers in the aftermath of a widespread disaster, and we are holding them accountable.”

The five hotels and the gas station named in the latest lawsuits, and details about their alleged price gouging, are as follows:

· Hospitality Management of Parsippany, LLC (d/b/a Days Inn), 3159 Route 46 East, Parsippany. This hotel allegedly increased room rates by up to 204% ($62.10 vs. $189.00 per night) during the declared state of emergency. Investigators found 258 occurrences of alleged price gouging.

· Amy Hotels, LLC (d/b/a Econo Lodge), 6641 Black Horse Pike, Egg Harbor Township. This hotel allegedly increased room rates by up to 150% ($75.00 vs. $199.99 per night) during the declared state of emergency. Investigators found 545 occurrences of alleged price gouging.

· Barclay Hospitality Services, Inc. (d/b/a Homewood Suites by Hilton), 3819 Route 1, Princeton. This hotel allegedly increased room rates by up to 77% ($129.00 vs. 229.00 per night) during the declared state of emergency. Investigators found 108 occurrences of alleged price gouging.

· Riya Hazlet Hotel, LLC (d/b/a/ Holiday Inn Hazlet), 2870 Route 35, Hazlet. This hotel allegedly increased room rates by up to 70% ($134.95 vs. $229.95 per night) during the declared state of emergency. Investigators found 124 occurrences of alleged price gouging.

· Infant King Management, LLC (d/b/a Howard Johnson Inn), 8029 Black Horse Pike, Pleasantville. The defendant allegedly increased room rates by up to 58% ($75.00 vs. $119.00 per night) during the declared state of emergency. Investigators found 52 occurrences of alleged price gouging.

· Ali Syed Gas Inc. (d/b/a Gulf), 141 Johnson Avenue, Hackensack. This gas station allegedly increased the price for regular gas by 17.6 percent ($3.40 per gallon to $4 per gallon), the price of premium gas by 28 percent ($3.90 per gallon to $4.10 per gallon), and the price of diesel fuel by 29 percent ($3.88 per gallon to $4.10 per gallon) during the declared state of emergency.

“Consumer Affairs investigators and the Division of Law have moved quickly on the consumer complaints filed to date. These lawsuits send a clear signal to untoward business owners – that New Jersey will not permit profiteering on the misfortune of its citizens,” said Eric T. Kanefsky, Acting Director of the State Division of Consumer Affairs.

The state is seeking restitution for consumers, imposition of civil penalties ranging up to $10,000 for an initial offense and up to $20,000 for each subsequent offense, and reimbursement of its investigative and legal costs.

New Jersey’s price gouging statute, N.J.S.A. 56:8-107, et. seq., 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 percent 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 percent above the normal markup from cost.


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