ExxonMobil says may take retail dealer fight to US Supreme Court

New York (Platts)--16Mar2004

Its legal options nearly exhausted, ExxonMobil may turn to the US Supreme Court in a last-ditch effort to avoid paying more than $1.2-bil to some 10,000 current and former service station dealers who say the major overcharged them for wholesale gasoline purchases over an 11-year period, the company indicated Tuesday. Petitioning the nation's high court became a possibility after ExxonMobil earlier this week was dealt another setback in a long-running class action battle against the dealers, who are spread out over 34 states. The Eleventh Circuit Court of Appeals in Atlanta on March 15 declined the company's request that the court reconsider its June 2003 rejection of ExxonMobil's appeal of a 2001 jury verdict that ruled then-Exxon inflated the wholesale price of gasoline in sales to the dealers, who owned or operated Exxon retail sites. The sales in question took place between March 1983 and August 1994. "We are evaluating our options for further appeal," a company spokeswoman told Platts. Those options appear limited to petitioning the US Supreme Court for further appeal or paying out more than $1.2-bil in awards to the dealers, she acknowledged. The spokeswoman said she did not know when the company would decide on a course of action. "I haven't spoken to the lawyers, so I don't have a sense of that yet," she said. A statement from Miami law firm Stearns Weaver Miller Weissler Alhadeff & Sitterson, one of two firms representing the dealers, said the average payout to each claimant could be about $130,000. While the lawsuit class consists of 10,000 dealers, only about 2,800 have submitted claims to date, the firm said, adding the deadline to file a claim is Aug 29, 2004. "Exxon's bad faith caused much hardship to Exxon dealers and their families," said attorney Eugene Stearns. "We will be working hard to get the dealers' money returned to them, with interest, as soon as possible." The dispute centers on Exxon's former "Discount for Cash" program, which began in 1982 and under which the company charged dealers a separate 3% fee to process credit card transactions. The dealers claim Exxon never lived up to a pledge to lower the wholesale price on gasoline sales by 1.3 cts/gal to offset the credit card fee. "We are very disappointed with the court's ruling," the ExxonMobil spokeswoman said, noting participation in the DFC program was voluntary. "We operated in good faith and we met all the obligations in the best interests of the dealers and customers." The class action lawsuit was filed on behalf of the dealers in 1991. Ten years later, in February 2001, a federal jury in Miami decided in favor of the claimants, ordering ExxonMobil to pay $500-mil in damages and $500-mil in interest. Further interest accrued over the past three years has increased the total award amount to more than $1.2-bil.