WSJ Metropolis Blog: Attorney General Suing Gas Stations for Sandy Price Gouging

 

May 2, 2013 : By Joe Jackson

New York state Attorney General Eric T. Schneiderman announced Thursday the filing of lawsuits against four gas station operators for price gouging in the wake of superstorm Sandy.

The suits against one Brooklyn station and three in Long Island come after an investigation by Schneiderman’s office that spanned the six months since Sandy struck.

Another 25 gas stations in counties surrounding New York City reached settlements worth $167,8450  with the attorney general’s office over price gouging.

“We want to send a message to the small minority of folks who tried to make a fast buck through illegal conduct that that will not be tolerated in New York State,” Schneiderman said. “This is not just a matter of saving a few dollars. Gasoline can save lives in times of crisis.”

One New York City station was among those sued — Sonomax gas station in Greenpoint, Brooklyn, which allegedly marked up prices by 88% to $4.59 per gallon after the storm, according to a statement from the Attorney General’s office. A call to the station was not immediately returned.

Schneiderman said his office warned retailers the day before the storm hit on Oct. 29 not to improperly elevate prices. But in the aftermath, they received “hundreds and hundreds” of complaints – including as many as 50 against a single station – from consumers about unfair price hikes.

The office then launched its investigation, comparing gas prices before and after the crisis under the state’s Price Gouging Law, which prohibits merchants from taking unfair advantage of consumers by selling goods or services for an “unconscionably excessive price” during disasters.

Schneiderman  said if retailers could prove that additional cost burdens occurred to make price increases necessary, those were taken into account. He added, “Unless you have some reason your costs went up, you’re not allowed to inflate your prices. It’s very, very simple.”

“Gas prices don’t lie. Everyone we brought an action against could not defend the unconscionable increase in their gas prices,” he said.

Schneiderman said investigations are ongoing into other instances of price gouging involving hotel rooms, batteries and other services.

State Sen. Brad Hoylman said he is “shocked” that some gasoline station operators were charging up to 500%  more than the market rate. “It’s said that after the storm come the vultures. And that’s exactly what happened here,” he said. “In a time of crisis, like a natural disaster which was superstorm Sandy, supply and demand do not apply.”