Hotel Accused of Price Gouging After Superstorm Sandy

William McGarry the former manager of the Bridgeport Holiday Inn alleges in a lawsuit that his former employer fired him after he refused to raise rates on the hotel’s rooms and impose minimum stays as well after last year’s Superstorm Sandy.

Hurricane Sandy was the deadliest and most destructive hurricane of the 2012 Atlantic hurricane season and was also the second-costliest hurricane in this nation’s history. By the time Sandy hit the coast of the Northeastern United States, it was downgraded to a Category 2 storm, but the storm still destroyed homes along the shoreline and left hundreds of thousands residents without power and thus forced many people to seek temporary shelter. Sandy affected twenty-four states in the United States, with particularly severe damage in New Jersey and New York.

On October 27, 2012, Connecticut Governor Dannel Malloy signed a Declaration of Emergency for the state, and on October 28, President Obama approved the request.

Unfortunately, in the areas hit hardest by Sandy, there were many complaints about alleged price gouging. Merchants were allegedly raising prices dramatically on items ranging from gasoline to generators. If these merchants were actually raising prices outrageously, they would be in violation of anti-gouging law.

Connecticut has, as does many states, a law that prohibits “individuals from excessively hiking up the prices of products and services during severe weather events.”

It is difficult, however, to determine if these merchants were raising prices because of supply shortages and disruptions due to Superstorm Sandy damage or if they were price gouging. Whenever there is a major disaster such as Sandy, there will be fluctuations in supply and demand and this will cause the cost of goods and services to rise.

In the week following Sandy, thirty price gouging complaints were filed with the Department of Consumer Protection, and of these complaints, twenty-three dealt with unfair gas and fuel pricing, four concerned price gouging by hotels and two dealt with tree removal price gouging.

Trefz Corp., the owner of the Bridgeport Holiday Inn, requested that a Superior Court judge throw out McGarry’s price gouging lawsuit. On Tuesday, a Superior Court judge denied their request. According to the Connecticut Post, lawyers for Trefz Corp. would not comment on the price gouging lawsuit.

Original story found here.