Chevron Agrees to $2.1M Class Action Settlement in Motor Fuel Temperature MDL

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Last week, plaintiffs filed a motion for the approval of several class action settlements with 18 fuel retailers and energy firms who were accused of selling fuel without accounting for temperature expansion, causing consumers to receive less fuel than they paid for. Chevron USA Inc., in particular, agreed to pay $2.1 million to resolve its part of the motor fuel temperature multidistrict litigation (MDL).

When gasoline is sold above the industry-standard 60 degrees Fahrenheit, the volume expands and essentially gives consumers less fuel than they actually paid for. The plaintiffs alleged that the defendants failed to disclose or adjust for temperature expansion of motor fuel in 26 states, in violation of state law theories that included breach of contract, breach of warranty, consumer protection and fraud.

The 18 defendants who agreed to settlements in the motor fuel temperature MDL include:

• B-B Oil Company Inc.
• Chevron USA Inc.
• Coulson Oil Company Inc.
• Diamond State Oil LLC
• E-Z Mart Stores Inc.
• Flash Market Inc.
• G&M Oil Company Inc.
• J&P Flash Inc.
• Love’s Travel Stops & Country Stores Inc.
• Magness Oil Company
• M. M. Fowler Inc.
• Port Cities Oil LLC
• Sunoco Inc.
• Tesoro Refining & Marketing Co. LLC
• Thorntons Inc.
• United El Segundo Inc.
• W.R. Hess
• World Oil Corp.

On Saturday, the plaintiffs requested an order certifying the settlement class and preliminary approval of all 18 class action settlements. “This litigation has been competently and vigorously prosecuted and defended since 2007, and Class Plaintiffs and Settling Defendants are represented by counsel with experience in complex and class-action litigation.”

The defendants have denied any wrongdoing, insisting instead that “their retail motor fuel method of sale is proper, appropriate and authorized under the applicable laws of the various states.”

Chevron agreed to pay more than $2.1 million to reimburse Chevron-branded retailers or wholesalers who sell motor fuel at retail. One-third of this amount will be used to make contributions to state agencies to help defray the costs “associated with rulemaking, regulation, inspection, or oversight” related to implementing automatic temperature compensation (ATC) technologies.

The other 17 defendants agreed to pay much smaller amounts, ranging from $20,000 – $100,000, to settle their portion of the motor fuel temperature MDL. “In return for the settlement consideration … each of the Settling Defendants will receive a release of all claims arising out of or relating in any way to the claims alleged in the MDL, any representation or failure to disclose the temperature or energy content of motor fuel, any alleged over-collection of state and federal motor fuel excise taxes from consumers based on the number of gallons dispensed without adjustment for the effect of temperature, and the alleged participation in any conspiracy to preclude the use of ATC equipment in the States at Issue.”

The Court preliminarily approved settlements with several other major gas retailers in 2012, including ExxonMobil, Shell, Conoco and BP.

The plaintiffs are represented by Robert A. Horn of Horn Aylward & Bandy LC, George A. Zelcs of Korein Tillery LLC, Thomas V. Girardi of Girardi and Keese, and Thomas V. Bender of Walters Bender Strohbehn & Vaughan PC.

The Chevron Fuel Temperature Class Action Lawsuit 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.

UPDATE: On Oct. 27, 2014, a federal judge approved 14 of 18 “hot fuel” class action settlements, including Chevron’s $2.1 million settlement.