Twenty-eight settlements totaling $24.5 million that resolve challenges to how motor fuel retailers and refiners including CITGO Petroleum Co. and ExxonMobil Corp. sold fuel have received final approval (In re Motor Fuel Temperature Sales Practices Litig. MDL, 2015 BL 270757, D. Kan., No. 07-MD-1840-KHV, 8/21/15). Gas purchasers alleged in putative class actions that the fuel retailers and refiners were liable for selling motor fuel for a specified price per gallon without disclosing or adjusting for temperature expansion, and without disclosing the effect of temperature on fuel in 26 states, the District of Columbia, Puerto Rico and Guam.
Under the settlements, six refiner Defendants – CITGO, ExxonMobil, BP Products North America Inc., Shell Oil Products US, Sinclair Oil Corp. and ConocoPhilips Co. – will put $21.2 million into a settlement fund and $500,000 in a class notice fund. Chevron will put $2 million into a settlement fund and $125,000 for class notice. E-Z Mart, W.H. Hess and other Defendants will pay $662,500 toward a settlement fund and $15,000 toward class notice. Judge Kathryn H. Vratil of the U.S. District Court for the District of Kansas granted final approval to the settlement on Aug. 21.
Settlements with Valero Marketing and Supply Co., Sam’s Club and other Defendants call for them to install automatic temperature compensation (ATC) dispensers at retail pumps in certain settlement states. The installations are scheduled to take place during a three-to-five year phase-in period. The court previously granted final approval to a settlement with Costco Wholesale Corp. in April 2012. Costco was the first of the Defendants in the litigation to negotiate a settlement (40 PSLR 539, 5/7/12).
Wawa Inc., 7-Eleven and other former or non-settling Defendants objected to the agreements, alleging that they violated the First Amendment of the U.S. Constitution because they create a “judicially approved subsidy which their political rivals can use to influence government decision making.” But the court didn’t buy the argument, concluding that the settlements were “voluntary agreements between private parties.”
The court also found that the group of objectors that included 7-Eleven didn’t have standing to object to the deals based on the First Amendment because they didn’t show that they would suffer legal prejudice as a result of the agreements. A hearing on attorneys’ fees and class representative incentive awards is scheduled for Nov. 19, 2015.
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