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NJ Attorney General Files More Price Gouging Lawsuits [AUDIO]

Ten more New Jersey businesses are accused of price gouging after Superstorm Sandy, as state officials vow to continue to crack down on retailers who attempt to capitalize on victims’ misfortune.

Attorney General Jeff Chiesa
Attorney General Jeff Chiesa (Stacy Proebstle, Townsquare Media)

Its the second round of price gouging lawsuits. Ten more businesses, including seven hotels and three gas stations are accused of illegally overcharging consumers during the storm with excessively increased rates, according to the state Attorney General’s office.

“We are talking about rates that went from 151%, 92% increased and that is just inexplicable to me and to the families that were victims of this natural disaster,” said state Attorney General Jeff Chiesa.

He said in some cases hotels charged more than $400 a night and gas stations raised rates to nearly $4.50 a gallon during the state of emergency.

“Safe, comfortable lodging and gas for generators is not a luxury when people have been displaced from their homes during a state of emergency. It is a basic necessity. We have no tolerance for businesses seeking to unlawfully profit from the desperation of others during this unprecedented storm.”

Eric Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said, “Hurricane Sandy brought out the best in most New Jerseyans. There were, however, certain retailers in the state who allegedly attempted to capitalize on the misfortune of our residents by unlawfully increasing the price of essential items such as shelter and fuel. Since the storm, the Division of Consumer Affairs has been vigilant about taking these few retailers to task. The Division will continue these efforts until all allegations of price gouging have been investigated and, the businesses who violated New Jersey’s consumer protection laws have been held accountable.”

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 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.

Violators face fines up to $10,000 for a first offense.

Consumers who suspect price gouging or any other violation of consumer protection laws, particularly as a result of Hurricane Sandy, are urged to call the Division of Consumer Affairs at 800-242-5846.

“If people feel they have been a victim of price gouging post Sandy they should contact our office immediately. I know there are other cases that my office is investigating and we will see how many more complaints they end up bringing,” said Chiesa.

Businesses Named In the Lawsuit

  • Howard Johnson Express-Clifton, at 680 Route 3 West, Clifton. This hotel allegedly charged as much as $449.99 per room night during the state of emergency. That represents an increase of or 151 percent above the highest rate charged prior to the state of emergency, which was $179 per room night. This hotel allegedly engaged in 177 instances of price gouging during the state of emergency.
  • Holiday Inn Express, 2600 Tonnelle Avenue, North Bergen. This hotel is accused of charging as much as $399.99 per room night during the state of emergency. That represents an increase of 92 percent above the highest rate charged immediately prior to the state of emergency, which was $208 per room night. This hotel allegedly engaged in 109 instances of price gouging during the state of emergency.
  • Ramada Inn, 120 Evergreen Place, East Orange. This hotel allegedly engaged in 208 instances of price gouging. In more than 90 of those instances, the hotel raised its rates by more than 30 percent above the highest rate charged prior to the state of emergency, which was $130 per room night.
  • Howard Johnson Express-Parsippany, at 625 Route 46 East, Parsippany. This hotel was named in New Jersey’s first round of price gouging lawsuits, announced November 9th. The hotel allegedly charged as much as 32 percent above the highest rate it charged for certain rooms prior to the state of emergency. This hotel allegedly engaged in 15 instances of price gouging during the state of emergency.
  • Comfort Suites, at 220 Route 17 Mahwah, owned by Tapah, LLC. This hotel allegedly raised its room rates by varying excessive amounts, up to 208 percent. The hotel allegedly charged $219 after the storm, for a room that was rented at $71.20 prior to the state of emergency. The hotel allegedly engaged in price gouging on 473 instances during the state of emergency.
  • America’s Best Value Inn, at 1311 Route 22 West, Phillipsburg, owned by Om Dutt, LLC. This hotel allegedly raised its room rates by varying excessive amounts, up to 191.6 percent. The hotel allegedly charged $350 after the storm, for a room that was rented at $120 prior to the state of emergency. The hotel allegedly engaged in price gouging on 30 instances during the state of emergency.
  • A-1 Motel, at 616 West White Horse Pike, Cologne, owned by A. Classic Corporation. This hotel allegedly raised its room rates by varying excessive amounts, up to 117 percent. The hotel allegedly charged as much as $108.70 during the state of emergency, compared with its highest pre-storm rate of $50 per room night.
  • Extended Stay America, at 3450 Brunswick Pike, Princeton, owned by ESA P Portfolio LLC. This hotel allegedly raised its room rates by varying excessive amounts, up to 59.8 percent. The hotel allegedly charged as much as $154.99 for double rooms during the state of emergency, compared with its highest pre-storm rate for double rooms of $96.99. The hotel allegedly engaged in price gouging on 107 instances during the state of emergency.

The lawsuits also include three gas stations:

  • Jenny’s Shell Station, LLC, at 461 Bloomfield Avenue, Bloomfield. This gas station allegedly raised the price for cash sales of regular gas from $3.70 per gallon to $4.50 per gallon, an increase of 22 percent, 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 percent, respectively. It also allegedly violated the price gouging law by increasing its markup from cost for regular gasoline by 23 percent. The Division of Consumer Affairs received complaints from approximately 12 consumers about this company.
  • Empire Oil, LLC, d/b/a Delta at 7319 Bergenline Avenue, North Bergen. This gas station allegedly raised the price for cash sales of regular gas from $3.40 per gallon to $4.10 per gallon, an increase of 21 percent, during the state of emergency. The company also allegedly raised the price for cash sales of supreme-grade gasoline by 22 percent. It also allegedly violated the price gouging law by increasing its markup from cost by as much as 14 percent, after receiving shipments of fuel on November 2 and 3. The Division of Consumer Affairs received complaints from approximately 10 consumers about this company.
  • Shiv Shivam Inc., d/b/a Lukoil at 152 Old New Brunswick Road, Piscataway. This gas station allegedly raised the price for cash sales of regular gas 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 7 cents per gallon. The business allegedly violated the price gouging law by raising its markup from cost for regular gasoline by 17.5 percent. The Division of Consumer Affairs received complaints from approximately 16 consumers about this company.

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