As we have reported in past editions, our firm continues to play an important role in the Hot Fuel Litigation which is consolidated in Kansas City, Kansas.  At the center of the litigation is a simple concept and that’s fairness for the consumer.  When customers purchase motor fuel by the gallon, they expect to receive a gallon’s worth of energy due.  However, due to a phenomenon known as thermal expansion, consumers are not receiving the fuel they pay for. Specifically, thermal expansion causes gasoline to expand as temperatures increase and creates “expanded gallons” of fuel that harbor less energy than before expansion. Ultimately, consumers in hot states, such as Alabama, Georgia or Florida, are receiving less per-gallon energy to power their cars than they are actually paying for while oil companies are able to generate massive profits from additional “expanded gallons” the high temperatures create.

The oil industry has known about the effects of thermal expansion on motor fuel liquids for decades. As such, the oil industry helped establish the U.S. Petroleum Gallon, where a gallon is equal to 231 cubic inches measured at 60 degrees.  To ensure that oil companies received consistent and fair gallons for each intra-industry transfer, they implement a temperature compensation device that would automatically compensate for temperature based on the U.S. Petroleum Gallon. This technology, known as automatic temperature compensation (ATC), is actually utilized at every level of the oil distribution process – except at the consumer level.  In fact, the oil industry refuses to implement the same technology to ensure that consumers receive a consistent gallon of motor fuel measured to temperature.  Our lawsuit seeks to remedy this problem and ensure that customers get the same technology and equal treatment as powerful oil companies.

During the past couple of months, our firm, working with some of the most successful plaintiffs’ firms in the nation, have scored substantial victories in the Hot Fuel case. After defeating the Defendants’ initial motions to dismiss on behalf of the plaintiffs, we were able to achieve a preliminary settlement with Costco Wholesale. Costco agreed to retrofit its gasoline dispensers in the states they temperature adjust on an intra-company basis.   Final arguments for approval of the Costco settlement were to be heard on April 1^st.  Approval of the settlement would be a huge step towards resolution of the cases.

Additionally, the Plaintiffs were able to defeat the Defendants’ “political question” dispositive motion that would have dismissed the entire litigation. Specifically, the Defendants argued that the Court could not determine whether ATC should be implemented – they argued such a question was best left for the regulators to decide.  But, the Court sided with the Plaintiffs and denied the Defendants’ motion.

On March 4^th, the Plaintiffs won another substantial victory for consumers when Judge Kathryn Vratil of the District of Kansas agreed with the Plaintiffs’ arguments and overturned a previous discovery ruling that favored the oil companies. From the inception of this case, the Plaintiffs have claimed that the oil companies conspired and used their political clout to keep ATC out of the consumer marketplace. The oil companies, clutching to a confusing and archaic First Amendment argument, have strongly opposed production of internal lobbying documentation with oil trade groups that would directly support the Plaintiffs’ conspiracy arguments.  With the release of these very important documents, we expect the truth to finally come out about how the oil companies have “strong-armed” an industry for decades at the expense of consumers.

Currently, the Plaintiffs’ motions for certification are pending in the District of Kansas and should be ruled on in the next couple of months.  While the oil companies have fought hard in this case, we remain fully confident that right will win out and our side will prevail.  If you have any questions about this litigation, please contact Beasley Allen Hot Fuel lawyers Rhon Jones and Parker Miller at Rhon.Jones@beasleyallen.com and Parker.Miller@beasleyallen.com, respectively.  Alternatively, you can contact our firm at 800-898-2034.