NEWARK – Acting Attorney General John J. Hoffman and the New Jersey Division of Consumer Affairs today announced that Stephen’s Landscaping, d/b/a “Stephen’s Garden Center,” of Long Branch, will pay $33,000 to resolve the state’s allegations that it engaged in unlawful price gouging when selling generators during the Superstorm Sandy state of emergency, as well as other alleged deceptive practices.

The state also had alleged that Stephen’s Landscaping violated the New Jersey Consumer Fraud act before the Sandy state of emergency by selling generators that had been recalled due to potential fire hazards.  The state further alleged that, during the immediate aftermath of Sandy, Stephen’s Landscaping violated state law by selling motor fuel to consumers without being licensed to engage in the retail sale of motor fuel.

“New Jersey’s price gouging law specifically protects consumers against excessive price increases for necessary items, such as generators, during a declared state of emergency,” Acting Attorney General John J. Hoffman said.  “Our laws also clearly prohibit the sale of items subject to recall orders due to safety hazards, as well as the unlicensed sale of motor fuel.  This settlement rights those alleged wrongs and compels future compliance with the law.”

Division of Consumer Affairs Acting Director Steve Lee said, “We are enforcing the laws that ensure a fair and safe marketplace in New Jersey.  Consumers in need of essential items due to a natural disaster should not be subject to price gouging.  And at no time should consumers be sold items that have been recalled because of potentially deadly hazards.”

Under the terms of the Final Consent Judgment announced today, Stephen’s Landscaping will pay the Division of Consumer Affairs a settlement amount of $33,000.  An additional $45,870.50 payment shall be suspended and automatically vacated after one year, provided that Stephen’s Landscaping complies with all terms of the Final Consent Judgment.

Governor Chris Christie declared a state of emergency on October 27, 2012, in advance of Sandy’s landfall.  The state’s complaint against Stephen’s Landscaping alleged that the business sold 132 generators to consumers at excessive price increases, as defined by New Jersey’s price gouging statute. 

The state’s complaint specifically alleged that, during the state of emergency, Stephen’s Landscaping increased its markup for generators by as much as 80.35 percent, compared to its markup on generators prior to the state of emergency.  New Jersey’s price gouging statute protects consumers by prohibiting excessive price increases, defined as more than 10 percent above the normal markup, for certain merchandise during a declared state of emergency.

In addition, as recently as the day before the state of emergency declaration, Stephen’s Landscaping allegedly sold generators that posed a fire hazard due to fuel leakage, and had been subject to a recall order by the U.S. Consumer Product Safety Commission.  The sale of such recalled items is prohibited under New Jersey’s Hazardous Products Regulations and the Consumer Fraud Act.

Finally, during the five days immediately after Superstorm Sandy struck New Jersey, Stephen’s Landscaping allegedly sold 44 five-gallon gas cans, filled with gasoline, at $50 per can – even though the company was not licensed by the New Jersey Division of Taxation to engage in the retail sale of motor fuel.  The unlicensed retail sale of motor fuel is prohibited under New Jersey’s Motor Fuel Tax Act.

The Division of Consumer Affairs’ enforcement actions against businesses accused of post-Superstorm Sandy price gouging have resulted in a total of more than $1.1 million in ordered civil penalties, restitution, and costs. 

Investigators Gilbert Horrach and Patrick Mullan, assigned to the Division of Consumer Affairs Office of Consumer Protection, conducted this investigation.

Deputy Attorney General Natalie A. Serock, assigned to the Consumer Fraud Prosecution Section within the Division of Law, represented the State in this action.

####