Westchester County Gas Station Guilty Of Price Gouging After Hurricane Katrina

NEW YORK, NY (January 19, 2007)—Attorney General Andrew M. Cuomo announced today that his office received a favorable decision in a lawsuit alleging that a Westchester County gas station had gouged consumers in the days following Hurricane Katrina in 2005.

New York’s price gouging statute prohibits sellers of vital consumer goods from taking unfair advantage of consumers by charging grossly excessive prices during any abnormal disruption of the market for the goods.

On Tuesday, January 16, 2007, a New York State Supreme Court Judge concluded that My Service Station, Inc., located in New Rochelle, violated New York’s price gouging statute because there was a "gross disparity" between the prices charged before and immediately after the storm, and the disparity was not attributable to higher costs imposed upon the seller. My Service Station must pay $2,000 in costs and penalties. This decision also confirms the important legal principle that the Attorney General can bring an anti-gouging case even if there is no declaration of a state of emergency by the Governor, and even if the disaster took place outside of New York.

Mr. Cuomo heralded the decision. "It is unconscionable for anybody to try to profit from the disruptions that natural disasters such as Hurricane Katrina can cause to New York State’s gasoline market,” Cuomo said. “These gas stations capitalized on fear and uncertainty by jacking up prices and increasing profits. My office will continue to ensure that during market disruptions any increase in prices must be proportionate to increased costs.”

The case against My Service Station, Inc. was based on information the Attorney General’s office received from the Westchester County Department of Consumer Protection. Cuomo thanked the Westchester County Department of Consumer Protection for providing gas price information that was instrumental to the successful prosecution of this case.

Westchester County Executive Andy Spano said, “When it comes to protecting the public against price gouging, the County's Consumer Protection Office will continue its efforts and its close collaboration with the Attorney General's office to find and prosecute those who take advantage of a situation. We are very pleased with the outcome of this case which sends a strong signal to those who would gouge the public.”

Similar findings were made last year against Penn-Can Truck Stop Mobil, located in Central Square in Oswego County, and Schaghticoke Mobil, located in Rensselaer County. All three cases held that the gas stations engaged in price gouging because of an unjustified disparity between the prices charged before and immediately after Hurricane Katrina.

All three cases were handled by Acting Deputy Attorney General Christopher Walsh, Assistant Attorney General in Charge Winthrop H. Thurlow, and Assistant Attorney General Judith C. Malkin.