Retail Victory on 'Hot Fuel'

Selling gas without temperature compensation does not violate Kansas law

KANSAS CITY, Mo. -- In a victory for QuikTrip, 7-Eleven and Kum & Go, selling gasoline that is not adjusted for its temperature--"hot fuel"--does not violate the Kansas Consumer Protection Act, a federal jury in Kansas City, Kansas, said Monday, according to a report by The Kansas City Star.

The case, in the U.S. District Court of Kansas, was the first to come to a jury verdict in years of legal proceedings, the report said. The jurors found, 10 to 0, that selling fuel over the industry's 60-degree standard was not "deceptive" under the state law.

The verdict affects only the defendants in this case, in Kansas, the report said.

BP Products North America Inc., ConocoPhillips Co., Shell Oil Products US, Casey's General Stores Inc. and Valero Marketing & Supply Co., as well as Wal-Mart Stores Inc., Sam's Club and Costco, settled earlier this year regarding their sales practices in Kansas and other states.

The terms of the settlements varied, but included such steps as telling consumers the temperature of the fuel they were buying, or putting in pumps that adjusted the volume of a gallon for temperature, especially in hotter states.

(Click here for previous CSP Daily News coverage of the hot fuel issue.)

"We agree with the verdict and that selling fuel in gallons without reference to temperature is fair and accurate," Margaret Chabris, a spokesperson for Dallas-based 7-Eleven, told the newspaper.

The verdict affirmed that the retailers "were doing what we were supposed to do by law," Mike Thornbrugh, a spokesperson for Tulsa, Okla.-based QuikTrip, told the paper.

Another charge--whether the practice was "unconscionable"--has yet to be decided, and is up to Judge Kathryn Vratil, rather than a jury, said the report.

Plaintiffs bring class-action claims for damages and injunctive relief against motor fuel retailers have been filed in Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, the District of Columbia and Guam.

The plaintiffs claim that because defendants sell motor fuel for a specified price per gallon without disclosing or adjusting for temperature expansion, they are liable under state law theories which include breach of contract, breach of warranty, fraud and consumer protection. Following a transfer order of the Judicial Panel on Multidistrict Litigation (JPML), the court has jurisdiction over consolidated pretrial proceedings in these actions.

The verdict is a major win for the oil industry, the Society of Independent Gasoline Marketers of America (SIGMA), said in a news alert to its members after the ruling.

"If the jury had found in favor of the plaintiffs, some fuel marketers would have had to install automatic temperature compensation (ATC) devices on their pumps, which cost approximately $2,000 per dispenser," the group said.

Click here to view the full Kansas City Star report.