Chevron Wins 'Hot Fuel' Victory

Judge freezes California cases: "Plaintiffs' arguments are ultimately unconvincing," she says

Published in CSP Daily News

KANSAS CITY -- Two Kansas City firms representing plaintiffs in the "hot fuel" litigation against gasoline retailers suffered a serious setback Friday when a federal judge threw out three cases against Chevron Corp., reported The Kansas City Business Journal.

U.S. District Judge Kathryn Vratil granted Chevron summary judgment on class-action claims that consumers overpaid for fuel that expanded because of temperature, said the report. This is the second big strike against their pursuit of the cases, after a defense verdict in the first bellwether trial in Kansas last year.

The cases Vratil dismissed Friday were filed in California. Like other similar lawsuits throughout the country, they were consolidated in Kansas federal court for pretrial proceedings and were to be sent back to their state of origin for trial.

Vratil ruled that California law allows Chevron to sell fuel without making adjustments for temperature or disclosing its effect, and that each retail sale essentially involves a contract in which buyers receive what they pay for.

"Plaintiffs are in the difficult position of arguing that California law does not authorize the manner in which Chevron sells motor fuel in California (which is the same way every motor fuel retailer has sold motor fuel throughout the United States for more than a century)," Vratil said, according to a Law360 report. "Plaintiffs' arguments are ultimately unconvincing."

When retailing gasoline in California, Chevron neither informs consumers of the temperature of the fuel being sold, nor indicates what impact higher-temperature fuel has on the energy it offers consumers, the plaintiffs claimed, arguing that this violated state unfair competition laws, Law360 said.

The stakes in the California cases were especially high because it is the largest state with the most drivers. The result there could influence the settlement terms for cases elsewhere, said the report.

She also issued an order Friday asking plaintiffs in other cases in California against smaller defendants to show why her reasoning in granting summary judgment to Chevron should not extend to them as well.

San Ramon, Calif.-based Chevron did not respond by press time to a CSP Daily News request for comment.

In a victory for QuikTrip, 7-Eleven and Kum & Go, selling gasoline that is not adjusted for its temperature does not violate the Kansas Consumer Protection Act, a federal jury in Kansas City, Kansas, said in Sept. 2012.

BP Products North America Inc., ConocoPhillips Co., Shell Oil Products US, Casey's General Stores Inc. and Valero Marketing & Supply Co., as well as Wal-Mart Stores Inc., Sam's Club and Costco, settled earlier this year regarding their sales practices in Kansas and other states.

Click here to view the full Business Journal report.

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