Refiners and chain retailers are reworking their proposed settlement deals in the “hot fuel” class-action lawsuit after the judge in the case rejected many of their offers. In general, the refiners agreed to pay $21.2 million into a special settlement fund.
After payment of attorney’s fees, claims administration, and other expenses, two thirds of what was left was to be used to reimburse retailers for the costs of installing automatic temperature compensation (ATC) at retail or putting decals on dispensers that explain the effect of temperature on energy content. The other third was to go to state weights and measures departments to help defray the costs of overseeing ATC.
The settlements were negotiated in the month before the first scheduled trial of the first hot fuel case. On September 24, however, a jury returned a verdict in favor of the industry, finding that refiners and retailers did not willfully fail to disclose the effects of temperature on the energy content of fuel.
Judge Katherine H. Vratil now says the plans by Shell, BP, ExxonMobil, Citgo, Sinclair, ConocoPhillips, and Valero do not fully address the needs of the class-action plaintiffs. She also said that she wants the deals for Casey’s and Sam’s Club Inc., which includes Wal-Mart, to be amended. The only agreement she approved was for Dansk Investment Group (formerly USA Petroleum).
Judge Vratil said she could not see how dispenser decals would benefit class members, and asked for more details on the number of dispensers to be converted to ATC. She also asked why the settlements limited payment to retailers to no more than 25% of the funds in each of the first two years after the deals were effective. To delay disbursement would diminish the value of the settlements by discouraging retailers from acting quickly to install ATC, she said.
The settlements provide that, after six years, any funds unspent would be given to an unspecified governmental agency for charitable purposes. Vratil also questioned some of the individual deals and wanted tweaks to the Casey’s and Sam’s Club settlements. Vratil wants a provision requiring both to report their progress directly to the court, and not just to an attorney appointed to monitor the companies’ compliance with the agreement.
Attorneys for Casey’s and Sam’s Club have agreed to the changes. Refiners will also adjust some of the settlements to address Vratil’s concerns. For example, some firms will now make funds available only for retailers and wholesalers who install ATC and delete the provision reimbursing marketers for decals. They will also delete the two-year, 25% limit on payments.
Judge Vratil set a January 7 date for a trial of the cases involving BP, CITGO, Exxon, Shell, Sinclair and Valero unless the settlement agreements could be changed. Attorneys for both the refiners and the plaintiffs asked her to void that date, saying they would have new deals worked out shortly. There are 30 other cases involving other retailers, such as RaceTrac, Sunoco, Hess, Sheetz, and Tesoro. (Carole Donoghue, CSP Daily News: www.cspnet.com)