A.G. Schneiderman Cracks Down On Gas Stations Caught Gouging Consumers In The Wake Of Hurricane Sandy

Attorney General Announces $50,000 Settlement With Major Hudson Valley Gasoline Wholesaler And Retailer

A.G. Also Obtains Default Judgment Against Another Station And Settlements With Five Others; Bringing Total Penalties And Costs To $287,618 From 42 Stations

Schneiderman: We Will Continue To Protect New Yorkers Against Price Gouging

NEW YORK – As part of his ongoing probe of high gasoline prices in the wake of Hurricane Sandy, Attorney General Eric T. Schneiderman today announced that he has reached a settlement with a major gasoline wholesaler and retailer that supplies and operates stations in the lower and mid-Hudson Valley. CPD Energy Corp. (“CPD”), based in New Paltz, has agreed to pay $50,000 in penalties for charging unconscionably excessive prices at six stations that it owns in Westchester, Putnam and Ulster counties. The CPD settlement represents the largest penalty paid by a single operator for price gouging on gasoline after Hurricane Sandy.

“As thousands of New Yorkers sat in line for hours waiting to buy gasoline during the state of emergency created by Hurricane Sandy, some crooked station owners increased their retail prices by excessive and illegal amounts,” Attorney General Schneiderman said. “Today, we are continuing to send the message that ripping off the public during a time of crisis is against the law, and that those who engage in illegal price gouging will be held accountable.”

Attorney General Schneiderman also obtained a default judgment of $23,733 against another operator, Mena Inter Inc., doing business as a USA Petroleum gas station in Farmingdale. The judgment includes disgorgement of excess profits, civil penalties, and costs to the state, and represents the largest penalty assessed for gouging at a single station. The order was entered by the Honorable Norman Janowitz in State Supreme Court in Nassau County.

The Attorney General also reached monetary settlements with five additional station owners -- two in Westchester, one in Rockland and two in Nassau -- for violations of the New York State Price Gouging statute. These actions come on the heels of 30 previous settlements announced earlier this year, and bring the total penalties and costs paid to $287,618 by 42 gas stations found to have engaged in price gouging. The Attorney General sued two other gas stations in May. Those lawsuits are pending. Investigations of several other gas stations are ongoing.

In the days after the storm, areas of New York saw some of the largest jumps in gas prices in state history. The price jumps resulted in hundreds of complaints received by Attorney General Schneiderman’s office and showed that prices were changing at the pump, not only overnight but several times a day.

New York State’s Price Gouging Law (General Business Law § 396-r) prohibits merchants from taking unfair advantage of consumers by selling goods or services for an “unconscionably excessive price” during natural disasters. The price gouging law covers New York State vendors, retailers and suppliers. The law specifically says that a price may be considered excessive if there is a “gross disparity” between the prices charged immediately before and after the emergency and the disparity is not attributable to higher costs imposed upon the seller.

The following stations are covered by the CPD settlement:

(All prices below are for regular unleaded gasoline.)

Chestnut Mart (Mobil), 174 Westchester Avenue, White Plains, NY                                            

  • Price before the storm:  $4.33
  • Maximum price after the storm:  $5.03
  • Increase in price before-and-after the storm: $0.70

Hutchinson Parkway Station (Mobil), Hutchinson River Parkway, White Plains, NY

  • Price before the storm:  $4.25
  • Maximum price after the storm: $4.85
  • Increase in price before-and-after the storm: $0.60

Yorktown Food Mart Inc. (Mobil), 2035 Saw Mill River Road, Yorktown Heights, NY

  • Price before the storm: $4.13
  • Maximum price after the storm:  $4.67
  • Increase in price before-and-after the storm: $0.54

Chestnut Mart Inc. (Mobil), 838 Kimball Avenue, Yonkers, NY

  • Price before the storm:  $4.06
  • Maximum price after the storm:  $4.58
  • Increase in price before-and-after the storm:  $0.52

Friendly Service New Paltz (Mobil), 409 Main Street, New Paltz, NY

  • Price before the storm:  $4.00
  • Maximum price after the storm: 4.47
  • Increase in price before-and-after the storm:  $0.47  

Chestnut Mart Inc. (Mobil), 3081 Route 22, Patterson, NY

  • Price before the storm:  $3.95
  • Maximum price after the storm:  $4.37
  • Increase in price before-and-after the storm:  $0.42

The price increases charged by CPD following Sandy at these six gas stations greatly exceeded CPD’s additional costs. Because Hurricane Sandy knocked power out to the area's gas refineries, the regular supply terminal from which CPD purchased gasoline had either a limited supply available or none at all during the State of Emergency period. As a result, CPD bought gasoline from more distant terminals including Syracuse (Van Buren), Springfield, MA, Revere, MA, East Providence, RI and New Haven, CT, and incurred additional costs of approximately 16 cents per gallon to transport this gasoline to its stations. However, CPD’s price increases at the six stations—which ranged from 42 cents per gallon to as much as 70 cents per gallon—greatly exceeded the additional transportation costs.

The default judgment was entered against the following station:

(All prices below are for regular unleaded gasoline. The spread is the difference between the wholesale price paid by the operator and the price charged at the pump.)

Mena Inter Inc. (USA Petroleum), 630 Main Street, Farmingdale, NY.

  • Difference between wholesale price and retail price prior to storm: $1.04
  • Difference between wholesale price and retail price immediately following storm: $1.80
  • Increase in wholesale/retail spread before-and-after the storm: 73%
  • Retail price immediately following the storm: $4.59

Settlements were also reached with the following retail service stations:

(All prices below are for regular unleaded gasoline. The spread is the difference between the wholesale price paid by the operator and the price charged at the pump.)

Katonah Gas & Auto Service, Inc. (Mobil), 80 Bedford Road, Katonah, NY

  • Difference between wholesale price and retail price prior to storm: $1.26
  • Difference between wholesale price and retail price immediately following storm: $1.61
  • Increase in wholesale/retail spread before-and-after the storm: 27%
  • Retail price immediately following the storm: $4.79

Mamaroneck Service, Inc. (Mobil), 1237 Mamaroneck Avenue, White Plains, NY

  • Difference between wholesale price and retail price prior to storm: $0.93
  • Difference between wholesale price and retail price immediately following storm: $1.17
  • Increase in wholesale/retail spread before-and-after the storm: 33%
  • Retail price immediately following the storm: $4.29

A&Z Service Center (Citgo), 364 New Hempstead Road, New City, NY

  • Difference between wholesale price and retail price prior to storm: $0.85
  • Difference between wholesale price and retail price immediately following storm: $1.35
  • Increase in wholesale/retail spread before-and-after the storm: 58%
  • Retail price immediately following the storm: $4.39

ZAM Service Center (BP), 464 West Jericho Turnpike, Huntington, NY

  • Difference between wholesale price and retail price prior to storm: $0.87
  • Difference between wholesale price and retail price immediately following storm: $1.20
  • Increase in wholesale/retail spread before-and-after the storm: 48%
  • Retail price immediately following the storm: $4.30

The 900 Broadway, LLC. (BP Gas Station), 900 N. Broadway, Massapequa, NY

  • Difference between wholesale price and retail price prior to storm: $.78
  • Difference between wholesale price and retail price immediately following storm: $1.18
  • Increase in wholesale/retail spread before-and-after the storm: 51%
  • Retail price immediately following the storm: $4.29

For information about lawsuits filed and settlements reached previously by Attorney General Schneiderman related to Gas Gouging during the emergency, please click here.

The lawsuit against Mena Inter Inc., and the settlement with The 900 Broadway, LLC. were handled by Assistant Attorney General-in-Charge Valerie Singleton of the Nassau Regional Office, under the supervision of Executive Deputy Attorney General for Regional Affairs Martin J. Mack. The other settlements were handled by Assistant Attorney General Sandra Giorno-Tocco and Assistant Attorney General-in-Charge Gary Brown of the Westchester Regional Office, under the supervision of Executive Deputy Attorney General for Regional Affairs Martin J. Mack.  

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