New York AG files price gouging suit against tree service

ALBANY, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman filed a lawsuit on Thursday against American Tree Company and its principals for allegedly price gouging consumers during Tropical Storm Irene in 2011.

American Tree Company, Merwin Skip Stranahan, John Stranahan and Daniel Stranahan allegedly preyed on vulnerable New Yorkers who needed tree removal services during the devastation caused by the tropical storm. The defendants allegedly used various illegal and deceptive tactics as part of a price gouging scheme.

"American Tree engaged in a breathtaking scheme to price gouge innocent New Yorkers out of thousands of dollars," Schneiderman said. "The tactics used, and the excessive amounts charged, by this company during a time of crisis in the community shocks the conscience. Whether it is Tropical Storm Irene or Hurricane Sandy, our office has zero tolerance for price gouging and we are fully committed to enforcing the law."

New York state's Price Gouging Law prohibits unjustified price inflation of essential services and goods during abnormal market disruptions caused by tropical storms, floods, hurricanes or other disasters. Tree removal services are considered essential services in the aftermath of a disaster.

American Tree allegedly charged consumers unconscionably excessive prices and failed to disclose fees before starting work. The company also allegedly gave inaccurate lowball estimates or false promises of insurance coverage, failed to give consumers written contracts as required by law, inserted pricing information on documents after consumer signatures, charged consumers emergency service call fees when consumers did not call them for services and submitted invoices with false information.

The defendants allegedly charged as much as $10,000 per tree for tree removal services and included undisclosed $1,500 emergency service call fees and $1,000 after-hours fees. At least 10 consumers allegedly received bills ranging from approximately $11,000 to nearly $50,000. In the month prior to the storm, American Tree charged no more than $4,000, with many bills in the hundreds, not thousands, of dollars.

The lawsuit seeks restitution and damages for consumers who were victims of price gouging, disgorgement of profits for Irene-related work, costs, penalties, and an injunction to prohibit the business from engaging in deceptive and illegal practices.