NJ Reaches Settlements With 8 Businesses Accused Of Sandy Price-Gouging

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NEWARK – Eight businesses, including four hotel operators that allegedly excessively and unjustifiably raised room prices for consumers who needed lodging immediately following Superstorm Sandy, have agreed to pay $282,844.72 – including reimbursement to 185 affected consumers – pursuant to settlements reached by the Office of the Attorney General and Division of Consumer Affairs. In arriving at the settlements with the state, the businesses made no admission of liability.

These settlements, which are the first involving hotel operators who were sued for alleged price gouging during the State of Emergency declared by Gov. Chris Christie in late October 2012 and in response to Superstorm Sandy, concern the following:

  • Barclay Hospitality Services, Inc., doing business as (d/b/a) Homewood Suites by Hilton, 3819 Route 1, Princeton: Will reimburse 63 consumers a total of $3,532.74. In addition, Barclay has made a settlement payment of $92,000.
  • ESA P Portfolio d/b/a Extended Stay America Princeton, 3450 Brunswick Pike, Princeton: Will reimburse 53 consumers a total of $2,006.20. In addition, ESA P Portfolio will make a settlement payment of $61,879.77, which includes $56,114.40 in civil penalties, $3,982.50 in attorneys’ fees and $1,782.87 in investigative costs.
  • Infant King Management, LLC, d/b/a Howard Johnson Inn, 8029 Black Horse Pike, Pleasantville: Will reimburse 59 consumers a total of $1,183.17. In addition, Infant King Management will make a settlement payment of $28,816.83, which includes $26,176.35 in civil penalties, $1,903.50 in attorneys’ fees and $736.98 in investigative costs. A suspended civil penalty of $5,000 will be automatically vacated after one year if there are no violations of the settlement terms.
  • A Classic Corp. d/b/a A-1 Motel, 616 West White Horse Pike, Cologne: Will reimburse 10 consumers a total of $282.94. In addition, A Classic Corp. will make a settlement payment of $9,717.06, which represents $5,378.42 in civil penalties, $3,037.50 in attorneys’ fees and $1,301.14 in investigative costs.

“The immediate aftermath of Superstorm Sandy left many New Jerseyans in a state of chaos and turmoil, which was only made worse when companies illegally gouged them for essential items such as shelter and fuel,” Acting Attorney General John J. Hoffman said. “We are here to protect the most vulnerable. We simply will not allow businesses to victimize vulnerable residents, who already are suffering hardships during a declared state of emergency.”

In addition to the settlements with the hotel operators, the Office of the Attorney General and Division of Consumer Affairs have settled the lawsuits filed against the following gas stations for alleged price gouging following Superstorm Sandy:

  • S&D, LLC, d/b/a Exxon, 555 Riverside Avenue, Lyndhurst: Will make a settlement payment of $25,000, which represents $22,980.37 in civil penalties, $1,627.50 in attorneys’ fees and $392.13 in investigative costs.
  • Cuoto & Sons, Inc., d/b/a Sunoco, 89 Wilson Avenue, Newark: Has paid $23,426.01, which represents $19,380.64 in civil penalties $3,220 in attorneys’ fees and $825.37 in investigative costs. In addition, a suspended civil penalty of $3,426.01 will be automatically vacated after one year if there are no violations of the settlement terms.
  • AT Petroleum, LLC, d/b/a Lukoil, 253 McBride Avenue, Paterson: Will make a settlement payment of $15,000, which represents $7,807 in civil penalties, $4,696 in attorneys’ fees and $2,497 in investigative costs.

Further, the division arrived at a settlement of the following investigation, which arose from the sale of five-gallon gas cans at allegedly excessive prices:

  • Berwick International, Inc., d/b/a Village Hardware, 223 Main Street, Hardwick: Will make a settlement payment of $20,000, which includes $17,123.24 in civil penalties, $2,092.50 in attorneys’ fees and $784.26 in investigative costs.

As part of these settlements, the businesses agreed to comply with the State’s Consumer Fraud Act going forward, particularly by not advertising, offering for sale and/or selling merchandise (e.g. hotel rooms, motor fuel, gas cans) at excessive prices during a declared State of Emergency. Further, any future violations of the Consumer Fraud Act might subject the businesses to enhanced civil penalties.

With these settlements and the first two price-gouging settlements announced in April, the Division of Consumer Affairs has assessed a total of $328,844.72 against companies that allegedly sold merchandise at excessive and unjustified prices following the declared state of emergency.

“Additional price gouging settlements are expected as a result of the investigations conducted by our Office of Consumer Protection staff in the days and weeks following Superstorm Sandy,” said Eric. T. Kanefsky, Director of the State Division of Consumer Affairs. “There is no excuse or justification for gouging consumers during a declared State of Emergency.”

In arriving at the settlements with the State, the businesses made no admission of liability. Investigators within the Division’s Office of Consumer Protection investigated these matters. Deputy Attorneys General Lorraine K. Rak, Chief of the Consumer Fraud Prosecution Section in the Division of Law, and Labinot A. Berlajolli, Glenn T. Graham, Nicholas Kant, Kourtney J.A. Knop, Lindsay Puteska, Lorena Salzmann and Alina Wells, and Special Deputy Attorney General Krima D. Shah represented the State in these matters.


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