Oil companies' request to combine 'hot fuel' cases puts suits on hold

| 3/27/2007

Fuel retailers and oil companies have asked a panel of federal judges to consolidate numerous lawsuits relating to "hot fuel." As that process plays out over the next two months or more, individual lawsuits against those companies will slow to a standstill.

Since the first two lawsuits were filed in December 2006 - one in the U.S. District Court for the District of Northern California and one in the U.S. District Court for the District of New Jersey - nearly 30 similar lawsuits have been filed in other courts.

The consumer plaintiffs - many of whom are owner-operators - are alleging that fuel retailers and oil companies are ripping off the public by selling fuel at temperatures above a 60-degree standard set a century ago.

The 60-degree standard defines a gallon of fuel as 231 cubic inches, and containing a certain amount of Btu. Warmer fuel expands, which in effect dilutes the energy content, or Btu.

Attorneys on both sides of the hot fuel issue agree that the lawsuits should be consolidated and transferred to one court. They also agree that further action on individual lawsuits be stayed until the Judicial Panel on Multidistrict Litigation decides where and how the case should proceed.

But that is where the agreement ends.

Attorneys for the fuel retailers and oil companies want pre-trial hearings to take place in U.S. District Court for the District of New Jersey, while the plaintiff groups want pre-trial proceedings to take place in the U.S. District Court for the District of Northern California.

The defendants' filed their motion requesting consolidation Feb. 22, and the plaintiffs filed a response to that on March 23.

"It's not unusual for federal courts to consolidate those for pre-trial discovery," George Zelcs, attorney for the plaintiffs in California and New Jersey, told Land Line.

"Whether or not there is one case or 110 cases really doesn't make a difference," Zelcs said. "The other cases that have been filed are basically duplicative."

The multidistrict panel of judges meets about every other month. The first available hearing date for the hot fuel litigation will be in May.

Attorneys for Exxon Mobil Corp., Amerada Hess Corp. and Motiva Enterprises LLC, want the case to be heard in New Jersey in an effort to reduce litigation costs, eliminate duplication in other courts, and to avoid conflicting rulings in other jurisdictions.

The lawyers for the consumers believe California is the best place for the hearings because "California's status as the single largest consumer of motor fuel, California's warmer climate, (and) recent media reports regarding potential foul play by one company's decision not to market temperature-compensation equipment in California."

Another reason given by the plaintiffs is a growing interest in the hot fuel issue by U.S. Sen. Barbara Boxer, R-CA, who has questioned equipment manufacturer Gilbarco Veeder-Root about withdrawing its temperature-compensation equipment.

- By David Tanner, staff writer