New York hotel settles over superstorm Sandy price gouging

NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman, as part of an ongoing probe of high consumer prices following Hurricane Sandy, announced a settlement of more than $40,000 Thursday with a Delaware-based corporation operating a Holiday Inn Express hotel in Brooklyn.

MMG Butler Street LLC, which operates the Holiday Inn Express at 279 Butler St. in Brooklyn, allegedly charged excessive rates to guests for last-minute room reservations following the storm in violation of the state's price touring law.

The hotel paid $15,315 in restitution under the terms of the settlement, which will be distributed to 38 victims. Additionally, the hotel paid a $25,000 civil penalty - the maximum amount allowable under the law - to the state of New York.

"At a time when people desperately needed shelter in the days after Hurricane Sandy, the Holiday Inn Express overcharged them - taking advantage of its own guests, including New Yorkers and visitors to New York, in violation of state price gouging laws," Schneiderman said. "Today, we are continuing to send the message that ripping off the public during a time of crisis is against the law, and that those who engage in illegal price gouging in New York will be held accountable."

Restitution in the case, as a result of seasonal and business-driven fluctuations in hotel prices during non-emergency times, is limited to the 38 specifically identified guests who were charged more than $400 per night for stays between Oct. 30 and Nov. 2, 2012.

Under New York's Price Gouging Law, merchants are prohibited from taking unfair advantage of consumers through the sale of goods or services for an "unconscionably excessive price" during national disasters.