As we have mentioned over the past few months, our firm has taken a leadership role in the Hot Fuel Multi-District Litigation consolidated in Kansas City, Kansas. The lawsuit centers on fairness – consumers expect to get the energy they pay for to power their engines when they purchase motor fuel. But, when liquids like gasoline are heated, they expand in volume while the fuel’s energy stays the same. As a result, hotter motor fuels are less dense and contain less energy than colder fuels.
The oil industry has known about the phenomenon of thermal expansion with liquids for decades. To ensure fairness and consistency in the market, the oil industry helped establish the U.S. Petroleum gallon, where a gallon of fuel is equal to 231 cubic inches at 60 degrees Fahrenheit. Unfortunately, fairness applies to everyone in the oil industry except the consumer. At every level of the distribution process, the oil giants compensate for the energy effects of temperature – everywhere, that is, except at retail with the consumer. Considering the average temperature in many states in the U.S. exceeds 60 degrees, or the standard temperature, many consumers are purchasing less fuel than they are paying for.
The Defendants, comprised mostly of the world’s largest oil companies, argue that temperature compensating is too difficult to implement in the United States at retail. Interestingly, automatic temperature compensation, or ATC, has existed for many years. In fact, the same oil companies lobbied to install the devices in Canada where consumers get more fuel than they pay for because of the lower temperatures. The oil companies also say installing ATC would be too expensive. All the while, the same companies are raking in world record profits. Researchers suggest that consumers are overpaying nearly a billion dollars for hot fuel.
Rhon Jones and Parker Miller, lawyers in our Toxic Torts Section, along with some of the best environmental law firms in the nation, are currently preparing certification motions to certify the class in the case. We are pleased to report that one company, Costco Wholesale, has settled pending court approval. Specifically, Costco has agreed to retrofit pumps in the states it adjusts on an intra-company basis. While this litigation has a long way to go, this settlement with Costco is a good start in ensuring fairness for consumers. If you need additional information, contract Parker Miller at 800-898-2034 or Parker.Miller@beasleyallen.com.
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