Drake Exonerated

Court finds no price fixing, gouging; pricing "consistent with permissible competition"

Published in CSP Daily News

NORTH GROSVENORDALE, Conn. -- Attorneys for Drake Petroleum Co. Inc., one of the largest independent petroleum distributors in New England, have successfully defended the North Grosvenordale, Conn.-based company in a putative class action before the U.S. District Court of Massachusetts and have secured a summary judgment ruling in favor of Drake Petroleum.

The plaintiffs, a group of residents and a corporation from the island of Martha's Vineyard, alleged a decade-long conspiracy to fix gasoline prices. The plaintiffs also accused the defendants of price gouging following [image-nocss] Hurricanes Katrina and Rita in 2005. Plaintiffs sued four gas stations from Martha's Vineyard alleging violation of the Sherman Act and the Massachusetts Consumer Protection Act. The defendants moved for summary judgment on both counts.

Zizik, Powers, O'Connell, Spaulding & Lamontagne attorneys Brian O'Connell and Bill Fidurko successfully argued to a federal district judge that the plaintiffs' evidence of price-fixing was insufficient for a reasonable jury to conclude that the defendants had an actual agreement to fix prices and were not acting independently. They convinced the court that the plaintiffs' evidence of similar prices and other conduct was as consistent with permissible competition as with illegal conspiracy and therefore did not support an inference of anti-trust conspiracy.

In addition, O'Connell and Fidurko, in a case of first impression, won a victory for their client on the issue of price-gouging by arguing persuasively that the price fluctuations at the defendants' gas stations after Hurricanes Katrina and Rita were consistent with the normal operation of the market and therefore not unconscionable under the Massachusetts Consumer Protection Act.

The decision resulted in the dismissal of the plaintiffs' complaint against the defendants in its entirety.

Drake Petroleum, a subsidiary of Providence, R.I.-based Warren Equities Inc., is a petroleum marketing organization that distributes refined petroleum products through a network of more than 200 convenience stores and more than 300 supply accounts positioned in 10 northeastern states from Maine to Virginia. It is a distributor of a variety of major gasoline brands, include Mobil, Shell, Sunoco, Citgo, Gulf, Getty, BP, Exxon and Valero and offers unbranded fuel including Diamond Fuels and Xtra Fuels. Drake is one of the northeast's largest independent distributors engaged in the marketing and distribution of energy products; principally gasoline, diesel fuel and Kerosene.

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