The warmer the fuel at the pump, the bigger the rip-off to consumers.
Plaintiffs are set to argue that point as their class-action lawsuit against fuel retailers got underway Wednesday in federal court. The issue is hot fuel – retail fuel sold without the retailer adjusting the sale to account for temperature.
The fourth floor of the Robert J. Dole Federal Courthouse in Kansas City, KS, was packed in the morning for jury selection. By midday, U.S. District Court Judge Kathryn Vratil had sworn in the 10-member jury to hear evidence in the trial expected to last 10 days.
The consolidated case consists of a class represented by two Kansas businessmen – Zach Wilson and Matt Cook – against defendant companies QuikTrip, 7-Eleven and Kum & Go.
Lead counsel for the plaintiffs, Robert Horn of Horn, Aylward & Bandy LLC asked the jury to consider the importance of fuel temperature at the point of sale, that the defendant companies willingly sold fuel without accounting for temperature, and that the defendants have done nothing to inform consumers about the effects of temperature on the amount of fuel energy being sold.
“Motor fuel expands when heated. Therefore, a given volume of motor fuel at a warmer temperature has less mass and less energy than the same motor fuel at a cooler temperature,” a pre-trial document states.
The plaintiffs are hoping to show proof of deceptive practices by the retailers.
Tristan Duncan of the Kansas City firm of Shook, Hardy & Bacon LLP gave the opening remarks for the defense. She said the sale of motor fuel has been highly regulated for more than 100 years and that various groups oversee the practice to make sure consumers are not being ripped off. She said retailers sell by the gallon, and that a gallon is defined as 231 cubic inches regardless of temperature.
Horn, for the plaintiffs, said long-haul truckers were among the first to recognize that the temperature of the fuel they were buying seemed to affect how far they could travel after a fill-up. He said truckers began reporting fuel temperatures in excess of 100 degrees in some cases to weights and measures groups.
Numerous truck drivers and business owners are part of the class. Class representative Matt Cook drives for Fed-Ex Ground.
Plaintiffs began filing lawsuits in various states in 2006, following an expose in the Kansas City Star that said hot fuel costs consumers billions of dollars. A short time later, a federal judicial panel consolidated multiple cases into one, and that’s the one before the court now.
The class is seeking monetary damages as well as a ruling that would force retailers to reconfigure their pumps to account for temperature of the fuel. The existing technology is known as ATC, or automatic temperature compensation.
The plaintiffs question why ATC is not being used in warmer climes, given the fact that retailers in Canada use ATC to keep from losing money at the pumps in cooler areas.
Another component to the case is the fact that wholesalers, refiners and others in the supply chain account for temperature, buying and selling based on a 60-degree standard. No standard exists at the retail pump at the present time, something the plaintiffs are hoping to change.
Ten fuel retailers have offered to settle out of court in recent months, and the judge has final say on the settlements.
Shell, BP, ConocoPhillips, ExxonMobil, Citgo and Sinclair have offered to put up $21.6 million into a fund to phase in ATC on their pumps.
Casey’s, Sam’s and Dansk offered to gradually convert to ATC on their own dime. Valero has offered to post information at the pump relating to fuel temperature and convert to ATC “when certain market conditions are met.”
Copyright © OOIDA