Plaintiffs Seek Final Approval on ‘Hot Oil’ Class Action, Objectors Remain

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Plaintiffs part of a multidistrict litigation (MDL) against almost 30 oil companies who allegedly made oil that expanded on hot days are asking a federal judge in Kansas to grant final approval to their $24.5 million class action settlements.

The oil companies have two options for resolving the class action lawsuits: installing retail automatic temperature compensation equipment (ATC) or paying money into a common fund toward that end.

However, 7-Eleven Inc. and others object to the hot oil class action settlement because they say that the plaintiffs and BP PLC, Exxon Mobil Corp. and other oil companies are supporting “automatic temperature compensation,” by establishing a slush fund for state governments.

The plaintiffs say that Sam’s Club, Valero, Casey’s General Stores and Dansk have opted to install the ATC equipment.

“That relief is substantive, tangible and designed to benefit retail consumers by providing a fairer method of distribution of motor fuel,” the plaintiffs claim in their motion filed Monday in support of the final approval of the class action settlements.

“Temperature compensation is already systemic in the petroleum industry but ends at the station level; retail consumers are neither sold a gallon that accounts for the effects of temperature, nor told they are not receiving a uniform gallon,” the plaintiffs explain. Costco is also implementing ATC.

“Through this litigation, plaintiffs are making headway on changing the status quo,” they add.

The plaintiffs in the hot oil class action settlement say it is prime for final approval.

There are a total of 28 class action settlements. Four have chosen the ATC route and the remaining 24 have opted to pay money into a fund. There have been only three objections and 104 opt-outs, they explain.

“Likewise, not a single federal or state official, which have been specifically informed about the details of the settlements, has voiced concerns or objections,” they explain. “That response speaks volumes about the fairness of the settlements.”

The class action settlements “easily pass muster as ‘fair, reasonable and adequate,’ and no credible argument has been or could be made as to why they should not be granted final approval.”

Of the bigger oil companies who have opted to pay money into the fund, they have each agreed to pay $5 million. Smaller retailers will pay just $21,000. That money will then go toward implementing, inspecting and regulating ATC.

The objectors, which includes 7-Eleven, said that the discussions about ATC were really a political issue and that the hot oil class action settlements amounted to a violation of First Amendment rights.

“The settlements seek to create this campaign [for ATC] by providing a de facto slush fund that will make payments to state governments if and when states change their laws in accordance with the named plaintiffs’, and plaintiff’s counsels’, wishes,” the objectors wrote, adding that it helps those who agree with ATC, push their agenda.

The three Class Members who objected to the deal said that they think it impacts those who are in states with cold climates unfairly because they benefit from not having ATC implemented.

Theodore H. Frank, who is the attorney representing two of the individual objectors, and is objecting himself called the class action settlements “absurd and should not be approved.”

But the plaintiffs said in their motion for final approval that the court has already called ATC “a substantive and tangible benefit,” having previously rejected “cold fuel” arguments.

U.S. District Judge Kathryn H. Vratil granted preliminary approval to the deal in October 2014.

The objecting plaintiffs are represented by Theodore H. Frank.

The objecting convenience stores are represented by Stephen R. McAllister of Thompson Ramsdell & Qualseth PA and Jonathan S. Massey of Massey & Gail LLP.

The defendants are represented by Arnold & Porter LLP, Wilentz Goldman & Spitzer PA, Woodward Hobson & Fulton LLP, Reed Smith LLP, Crowe & Dunlevy, Manatt Phelps & Phillips LLP, and Rouse Hendricks German May PC, among others.

The Hot Oil Class Action Lawsuit MDL is In re: Motor Fuel Temperature Sales Practices Litigation, Case No. 2:07-md-01840, in the U.S. District Court for the District of Kansas.