KANSAS CITY, Kansas — U.S. District Judge Kathryn H. Vratil on August 21 approved 28 “hot fuel” settlements with refiners and fuel retailers consolidated under Motor Fuel Temperature Sales Practices Litigation, according to court documents.
On June 18, 2007, the Judicial Panel on Multidistrict Litigation designated the Kansas District Court as the court for the consolidated federal cases challenging sales practices of motor fuel retailers and refiners with regard to motor fuel temperature. The cases challenge the defendants’ practice of selling motor fuel by the gallon without disclosing or adjusting for temperature and without disclosing the effect of temperature on motor fuel in 26 states—Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah and Virginia, as well as the District of Columbia, Puerto Rico and Guam.
The retailers’ pumps did not have automatic-temperature-compensation (ATC) devices that would adjust the price based on the fuel volume.
Six of the defendants—including major oil companies—agreed to establish a $22.925-million fund to reimburse retailers for installing ATC equipment.
Four of the defendants, including Casey’s General Stores and Valero, agreed to install ATC devices on their fuel dispensers at their branded sites over time. The other 18 defendants—including CITGO and Thorntons—agreed to pay into a $1.577 million fund that would help state weights and measures agencies ensure ATC upgrades were done lawfully.
In March 2015, a group of large chains including QuikTrip, 7-Eleven, Circle K, Kum & Go, Marathon Petroleum, Murphy Oil USA, Pilot Travel Centers and Flying J, PTCAA Texas, RaceTrac Petroleum, Sheetz, Speedway, The Pantry and Wawa filed an objection to the proposed settlement, arguing that it created a “de facto slush fund” that would financially reward state governments for changing their laws to meet the plaintiffs’ wishes.
Several other individuals also filed objections.
On June 9, 2015, the Court heard oral argument from counsel for the plaintiffs, settling
defendants and the non-settling objectors.
Ordinarily, a non-settling party lacks standing to complain about a class-action settlement because it has suffered no “injury in fact” and has no legally protected interest in the settlement, said the court. But the retailer objectors assert that they have standing to object because they will suffer legal prejudice if the settlements are approved. They assert that the settlements will cause injury to their business interests and First Amendment rights. And they assert that the entire thrust of the settlements is to change the regulatory environment in which they do business and that a permissive system of ATC implementation will effectively force all retailers to adopt ATC. They argue that under the settlements, some retailers and states will move toward implementing voluntary ATC and that states might decide to mandate ATC at retail, and that all this may result in market and regulatory forces requiring all retailers to implement ATC, which will harm them financially.
The judge ruled that “such speculative potential business harm does not amount to an ‘injury in fact’ sufficient to convey standing.”
The 28 settlements and amounts totaling approximately $24.5 million include:
- B-B Oil Co. Inc., $21,000
- BP Products North America Inc./BP West Coast Products LLC, $5 million
- Casey’s General Stores Inc.
- Chevron U.S.A. Inc., $2.125 million
- CITGO Petroleum Corp., $900,000
- ConocoPhillips Co., $5 million
- Coulson Oil Co. Inc., $21,000
- Dansk Investment Group Inc. (formerly USA Petroleum Corp.)
- Diamond State Oil LLC, $21,000
- ExxonMobil Corp. (and Esso Virgin Islands Inc. and Mobil Oil Guam Inc.), $5 million
- E-Z Mart Stores Inc., $90,000
- Flash Market Inc., $21,000
- G&M Oil Co. Inc. (and G&M Oil Co. LLC), $40,000
- J&P Flash, Inc., $21,000
- Love’s Travel Stops & Country Stores Inc., $105,000
- Magness Oil Co., $21,000
- M. M. Fowler Inc., $23,500
- Port Cities Oil LLC, $21,000
- Sam’s Club
- Shell Oil Products US (Motiva Enterprises LLC and Equilon Enterprises LLC), $5 million
- Sinclair Oil Corp., $800,000
- Sunoco Inc. (R&M), $61,000
- Tesoro Refining & Marketing Co. LLC, $50,000
- Thorntons Inc., $61,000
- United El Segundo Inc., $40,000
- Valero Marketing & Supply Co.
- World Oil Corp., $40,000
- W.R. Hess, $21,000
Click here to view the court web page on the case, with links to individual settlement agreements and other documents.