Atlantic Gas & Wash v. 3170 Atlantic Ave.

Business Law

New York Law Journal


Justice David Schmidt

Defendants moved for dismissal of the complaint which asserted 13 causes of action, including price gouging and fraud. Plainitff gas station operators argued they were compelled to enter an allegedly unconscionable contract requiring them to purchase gasoline from defendants at excessive rates. Plaintiffs alleged defendants took actions to knowingly harm the profitability of plaintiffs' business operations by engaging in price gouging, fraud and unlawful business practices. The court noted a claim for price gouging under General Business Law §396-r could only be brought by the Attorney General, ruling plaintiffs lacked standing to assert this cause of action. As such, that claim was dismissed. Plaintiffs also alleged that defendants engaged in a course of conduct to defraud them by charging excessive prices for goods to cause a default on their obligations. However, the court concluded the pleadings fell "woefully short" of the specificity requirements, and were inadequate to sustain a fraud claim, and dismissed the claim against all defendants. Further, as New York did not recognize an independent cause of action for punitive damages, this, alone, was a sufficient reason to dismiss such cause of action.

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