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New Jersey business litigation: More companies sued after Sandy

New Jersey Governor Chris Christie warned companies that the state would sue them if they were found to be price gouging after Hurricane Sandy. He has made good on his promise and has embroiled several companies in business litigation. An extended stay hotel is the latest company to find itself in Governor Christie's crosshairs.

Extended Stay America allegedly increased its hotel rates by approximately 60 percent after the hurricane. This hotel was not the worst offender - a Comfort Suites hotel has been accused of raising its rates by nearly 208 percent. There are currently 18 businesses that have had lawsuits filed against them by the New Jersey Attorney General. Most, if not all, of the businesses are either hotels or gas stations.

If a company is found to be guilty of price gouging, each business faces fines up to $10,000 for the first instance and $20,000 for each additional offense. Each time a consumer was charged the inflated price constitutes an offense. For instance, the Extended Stay America has been accused of as many as 107 separate price gouging offenses.

This kind of business litigation can cripple a business. The fines alone can financially strap a business, but battling back from having a reputation of being a price gouger in the wake of a natural disaster such as Hurricane Sandy could potentially end a business. Even if a company is found to be innocent of the allegations against it, the damage to their reputation may already be done. Any company that finds itself in this type of situation may want to seek advice and assistance to quickly minimize the damage.

Source: Nj.com, "N.J. Attorney General files 10 more Sandy price-gouging suits including West Windsor hotel," Jenna Pizzi, Nov. 28, 2012

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