N.J. AG Settles First Sandy-Related Price-Gouging Lawsuits

Two stations received total of 66 consumer complaints

Jeffrey Chiesa

NEWARK, N.J. -- Two New Jersey gas stations will collectively pay $46,000 to resolve allegations that they "excessively and unjustifiably" raised prices for motor fuel during the State of Emergency declared by Governor Chris Christie in response to last fall's Superstorm Sandy, under terms of court-approved Final Consent Judgments.

C.S. George & Sons Inc., which does business as George's Gulf Station in Clifton, and Shiv Shivam Inc., which does business as Lukoil in Piscataway, are among the 24 businesses sued late last year by Attorney General Jeffrey S. Chiesa and the State Division of Consumer Affairs for alleged price gouging.

C.S. George & Sons allegedly raised the price of regular gasoline by 34%, immediately following the declared State of Emergency. Shiv Shivam allegedly raised its price for regular gasoline by 17.5%.

"Through Gov. Christie's leadership, we acted swiftly and decisively to investigate consumer complaints about alleged price gouging and to file lawsuits, where warranted, in order to protect New Jersey residents from such unlawful practices," Chiesa said. "These two settlements are the first of what I expect to be a series of resolutions to the price-gouging lawsuits that we have filed to date."

New Jersey's price-gouging law prohibits excessive price increases during a declared State of Emergency and for 30 days thereafter. Excessive price increases are defined as those 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 those costs.

The Division of Consumer Affairs received more than 50 consumer complaints about George's Gulf Station, and it has agreed to pay $26,000. The division received 16 consumer complaints about the Lukoil station, and it has agreed to pay $20,000.

Under the terms of the settlements, both stations also have agreed to comply with the state's Consumer Fraud Act going forward including by, among other things, not advertising, offering for sale or selling motor fuel at excessive prices following a declared State of Emergency. Further, any future violation of the Consumer Fraud Act might subject the stations to enhanced civil penalties. The settlements announced Wednesday include civil penalties and reimbursement of the State's attorneys' fees and investigative costs.

More than 2,000 consumer complaints about price gouging of all kinds were filed in the period immediately following landfall by Superstorm Sandy.