Parsippany Howard Johnson Accused of Price Gouging

A Parsippany hotel has been hit with a civil lawsuit for alleged price gouging in the wake of Tropical Storm Sandy.

Ratan Hospitality Group, LLC, which does business as the Howard Johnson Express at 625 Route 46 East, allegedly raised room prices up to 32 percent immediately prior to the state of emergency, according to a joint statement released Friday by Gov. Chris Christie and Attorney General Jeffrey S. Chiesa.

The hotel is accused of increasing rates to as much as $119 per night, compared to the hotel's usual highest room rate of $90, the statement said.

The hotel and seven New Jersey gas stations are also named in the suit, filed by the Division of Law on behalf of the state Division of Consumer Affairs.

"We have received no indication that these defendants faced costs that would have made these excessive price increases necessary or justifiable," Chiesa said in a press release. "We have hundreds of complaints still to investigate. Anyone seeking to prey upon the desperation of consumers during this state of emergency will find that the penalties far outweigh any ill-gotten profits."

Excessive price increases during a declared state of emergency, and for 30 days after the end of the state of emergency, are illegal under state law. Excessive prices 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.

Prices may not exceed 10 percent above the normal markup from cost, even if the merchant faces additional costs during the emergency.

Violations of the price gouging statute are subject to civil penalties of up to $10,000 for the first offense and up to $20,000 for subsequent offenses; each sale of merchandise is considered a separate event.

The Division of Consumer Affairs has received nearly 2,000 complaints since the Oct. 27 state of emergency, according to Acting Director Eric T. Kanefsky. Since then, more than 170 subpoenas to New Jersey merchants have been issued, with hundreds of others investigated, Kanefsky said.

Businesses accused of price gouging:

• Kistruga, Inc., d/b/a (doing business as) Lukoil station, at 253 McBride Avenue, Paterson. This gas station is accused of raising the price of regular fuel from $3.45 to $5.50 per gallon, an increase of 59 percent, during the state of emergency. On Nov. 1, the business allegedly made approximately 230 sales of regular gasoline to consumers. The Division of Consumer Affairs received approximately 27 consumer complaints about this company.

• C.S. George & Sons, Inc., d/b/a George's Gulf station, at 387 Crooks Avenue, Clifton. This gas station is accused of raising the price of regular gas from $3.49 to $4.69 per gallon, an increase of 34 percent, during the state of emergency. The Division of Consumer Affairs received approximately 52 consumer complaints about this company.

• Alen Service Corp., d/b/a Lukoil station, at 335 McCarter Highway, Newark. This gas station is accused of raising the price of regular gas from $3.60 to $4.50 per gallon, an increase of 25 percent, during the state of emergency. The business also allegedly raised the price of premium-grade gasoline by 25 percent, raised the price of plus-grade gasoline by 26 percent, and raised the price of diesel fuel by 31 percent, to $5.45 per gallon. The Division of Consumer Affairs received approximately 21 consumer complaints about this company.

• Vinny Fuel Corporation, d/b/a Delta Gas station, at 141 Bloomfield Avenue, Bloomfield. This gas station is accused of raising the price of regular gas from $3.19 to $3.99 per gallon, an increase of 25 percent, during the state of emergency.  The Division of Consumer Affairs received approximately six consumer complaints about this company.

• Perth Amboy NJPO, LLC, d/b/a BP station at 163 Fayette Street, Perth Amboy. This gas station was accused by consumers of raising the price of regular fuel between 22 percent and 33 percent during the state of emergency. It also allegedly raised the price of premium-grade gasoline by 12 percent, and the price of plus-grade gasoline by 13 percent, from Oct. 31 to Nov. 1.The business has allegedly refused to provide receipts, records, and other documents that the Division of Consumer Affairs demanded by subpoena. The Division of Consumer Affairs received approximately 19 consumer complaints about this company.

• S&D LLC,d/b/a Exxon station, at 555 Riverside Avenue, Lyndhurst. This gas station is accused of raising the price of regular fuel from $3.42 to $4.13 per gallon, an increase of 21 percent, during the state of emergency. It also allegedly raised the price of supreme-grade gasoline by 14 percent. The Division of Consumer Affairs received approximately 13 consumer complaints about this company.

• Couto & Sons, Inc. d/b/a Sunoco station, at 69 Wilson Avenue, Newark.  This gas station is accused of raising the price of regular fuel from $3.80 to $4.46 per gallon, an increase of 17 percent, during the state of emergency. It also allegedly raised the price of plus-grade, premium-grade, and ultra-grade fuel by 11 percent.  The gas station is also accused of increasing the prices for all four grades of fuel more than once per 24 hour period, in violation of the Motor Fuels Act. The State's complaint further notes that this gas station paid less per gallon for a shipment of fuel on Nov. 1 than it paid for its most recent shipment prior to the state of emergency - indicating a decrease in the company's costs, rather than an increase, after the storm. The Division of Consumer Affairs received approximately 24 consumer complaints about this company.

• Ratan Hospitality Group, LLC, d/b/a Howard Johnson Express at 625 Route 46 East, Parsippany. This hotel is accused of raising its room prices up to 32 percent - to $119 per night, compared with the hotel's highest room rate of $90 immediately prior to the state of emergency.

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