Egg Harbor Township Hotel to Pay Over $64,000 For Price Gouging Following Sandy

The State has reached a settlement with a hotel in Egg Harbor Township over allegations that the hotel engaged in price gouging in the wake of Superstorm Sandy, Acting Attorney General John J. Hoffman and the New Jersey Division of Consumer Affairs announced Wednesday morning.

Amy Hotels, LLC, d/b/a “Econo Lodge” (“Amy Hotels”) has agreed to pay $64,543.96, including $24,995.64 in consumer restitution, $25,000 in civil penalties, and $14,547.82 in reimbursement of the State’s attorneys’ fees and investigative costs.

An additional $25,000 in civil penalties is suspended but will become payable if the business violates the terms of the settlement within one year.

The hotel, located at 6641 Black Horse Pike, allegedly engaged in 545 instances of price gouging between Oct. 27, 2012 and Nov. 5, 2012.

“New Jersey’s laws specifically prohibit price gouging for needed commodities during a declared state of emergency,” Hoffman said. “This settlement, and the many other victories we have obtained against alleged Superstorm Sandy price-gougers, should deter other businesses from violating this law in the future.”

Gov. Chris Christie declared a state of emergency on October 27, 2012, in advance of Sandy’s landfall. The State’s complaint, filed in December 2012, alleges that Amy Hotels raised its room rates to various excessive amounts immediately thereafter.

The hotel allegedly increased its room rates by as much as 150 percent, or to $199.99 per night for a room that was normally priced at $79.99 per night prior to the state of emergency.

The law defines excessive price increases as more than 10 percent above the price at which merchandise was sold during the normal course of business immediately prior to the state of emergency. If a merchant incurs additional costs during the state of emergency, prices may not exceed 10 percent above the markup from cost applied in the usual course of business prior to the state of emergency.

Following the settlement, 23 of the 27 lawsuits filed against hotels, gas stations, and other businesses accused of price gouging during the Superstorm Sandy state of emergency have been resolved.

The State has obtained a total of $1,080,702.64 in civil penalties, consumer restitution, and the reimbursement of the State’s attorney’s fees and investigative costs, as a result of these enforcement actions.

“Flooding, power outages, and even the complete destruction of their homes left many New Jerseyans in desperate need of a place to stay during Sandy’s aftermath,” Division of Consumer Affairs Acting Director Steve Lee said. “Some hotels took advantage of that need through unlawful price gouging, and now they will be held responsible.”