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Post date: August 24 2006

State Supreme Court Supports Spitzer's Fight Against Gasoline Gouging

Attorney General Spitzer today hailed a court decision that strengthens the ability of the state to pursue gasoline price gouging cases.

On Wednesday, Albany County Supreme Court Justice Joseph C. Tersesi ruled that a Rensselaer County-based gas station had used Hurricane Katrina as a false excuse to raise prices.

State law prohibits the sale of vital consumer goods at an "unconscionably excessive price" during natural disasters. The law 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.

"This case is ground breaking because it established two important principles: First, the declaration of state of emergency in New York is not required to enforce the state’s price gouging laws. Second, the calamity causing the market disruption need not occur locally. It may occur in another state located hundreds or even thousands of miles away."

In April, the Attorney General’s office sued three gas stations, alleging violations of the state price gouging law. The suits charged that Schaghticoke Mobil, owned and operated by Wever Petroleum, Inc. and two other stations used the hurricane as an excuse to raise their markup on gas.

Before the hurricane, the station charged its customers $2.74 per gallon with a markup of $.83 per gallon. After the Hurricane, the station charged its customers $3.45 per gallon with a markup of $1.43 or a 72 percent increase.

The lawsuit followed settlement of related price gouging charges with 15 other gas stations across the state. Each of those stations was found to have increased its markup by 25 percent or more.

The cases against the two remaining gas stations are pending.

This case was handled by Assistant Attorneys General Judith Malkin and Winthrop Thurlow, and Assistant Deputy Attorney General Christopher Walsh under the supervision of Deputy Attorney General Marty Mack.


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