OAK BROOK, Ill. -- Two high-profile lawsuits moved forward late last week to the detriment of Major Oil companies ExxonMobil and Shell and in favor of the little guy gas station owners.
Two Miami law firms were awarded more than $300 million in attorneys fees for their work in a 15-year legal battle involving Exxon Mobil Corp. and thousands of gas station dealers who sued the company. U.S. District Judge Alan S. Gold gave the two law firms about 30% of the total settlement of $1.075 billion agreement awarded to the plaintiffs, said the Associated Press, [image-nocss] citing a report by The Miami Herald.
The case against Irving, Texas-based Exxon Mobil Corp. began in 1991 when the dealers accused the company of failing to provide promised discounts for wholesale motor fuel and fraudulently hiding its failure to pay. A jury found in favor of the dealers in 2001 and ordered Exxon to pay $500 million, but the company appealed that verdict. The U.S. Supreme Court denied Exxon's last appeal in June, by which time the payment had increased to more than $1 billion with interest.
The settlement comes as a court-appointed official assesses the claims of the more than 10,000 station owners involved in the suit.
The Miami firm Stearns Weaver Miller Weissler Alhadeff & Sitterson will receive about $247.3 million, while the firm of Pertnoy, Solowsky and Allen will get about $53.2 million. Three other law firms in the case were awarded a total of about $8.6 million.
In his order, Gold dismissed protests about the amount of the fees, noting the length of the firms' involvement in the case, the extensive appeals and the risk the firms faced if they lost at trial or on appeal.
Separately, in late June, station owner Mehdi Shahbazi has won a round in his case in federal court in San Jose, Calif., reported the San Jose Mercury News.
U.S. District Judge Jeremy Fogel earlier in June denied Shell Oil's request for a preliminary injunction aimed at forcing Shahbazi to leave his station. The ruling means that the bizarre, nationally publicized siege at Marina (Calif.) Shell could continue for monthsperhaps yearsas the case is litigated.
At issue is whether Shahbazi, 63, broke his franchise agreement to promote the product last fall when he passed out fliers and erected two large signs outside his station attacking Big Oil and advocated a boycott of all stations owned by oil companies.
Although he can no longer sell gasolineShell has cut off his fuel supplies, said the reportShahbazi is still operating his mini-mart and car wash, and sympathetic customers reportedly patronize the station to support him.
I'm going to continue keeping the station open as many hours as I can. I will keep fighting until I die, Shahbazi told the newspaper. I wasn't surprised at the decision. Judge Fogel is a very fair judge.
Colin West, a San Francisco attorney who is representing Shell in the case, told the paper that he also wasn't surprised because preliminary injunctions are very hard to get. But he expressed confidence Shell would win the case on the merits when it comes to trial.
Since November, the pumps at Shahbazi's station have been surrounded by chain-link fences, installed as part of an environmental upgrade project. Shell refused to take them down after the work was finished.
And according to the Mercury News, the battle might be spreading to Salinas, Calif., where Shahbazi owns a half-interest in another Shell station. Shahbazi said his partner two weeks ago decided to turn the station over to Shell. But Shahbazi is refusing to hand over the key. It's my station, not Shell's, he said.
West said the company had terminated the lease at the Salinas station because the rent hadn't been paid for several months. Shahbazi said he has no money to pay for gasoline, but will continue to operate the mini-mart.
Shahbazi erected his first sign nine months ago, the report said, days after Hurricane Katrina sent gasoline prices soaring. It said: Consumers' pain is Big Oil's unearned profit! To oppose it see cashier. Once inside the mini-mart, people were handed a flier accusing oil companies of trying to drive franchise retailers like him out of business by selling gasoline for less at company-owned stations.
Shahbazi, an Iranian immigrant who has sold gasoline for 37 years, claims the companies' long-term goal is to control the market and raise prices even more.
Shell, which dismisses Shahbazi's arguments as nonsense, was not amused by the signs and began taking action in early November after he erected a second sign, said the report. Shell's distributor told him to take down the signs or face a cutoff of his gasoline supplies. Believing his free speech rights were being infringed, Shahbazi ignored the distributor. The distributor terminated his fuel-supply agreement with Shahbazi in late November, and Shell terminated the lease. The company said he is now illegally occupying the Shell-owned property.
In his ruling, Fogel noted that a party seeking a preliminary injunction must demonstrate a likelihood of success on the merits and the possibility of irreparable injury. But Fogel said it is unclear Shell would succeed on the merits. Another reason he didn't grant the injunction, he said, is that Shell might not have given Shahbazi enough legal notice. Moreover, he wrote, Shell has not demonstrated the possibility of irreparable injury if the injunction wasn't issued. In comparison, he wrote, Shahbazi has demonstrated that he could suffer irreparable injury if the court granted the instant motion for a preliminary injunction.
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