FRANKFORT, Ky. -- The Kentucky Petroleum Marketers Association (KPMA) has come out in support of Marathon's countersuit against Kentucky in response to being sued by the state for alleged price gouging.
As reported last week, Kentucky Attorney General Greg Stumbo filed litigation against Marathon Oil Corp., Marathon Petroleum Co. LLC and Speedway SuperAmerica LLC, charging the corporations with profiteering during the time of emergency following hurricanes Katrina and Rita. The companies are alleged to have overcharged Kentucky consumers more than $89 [image-nocss] million in grossly excessive motor fuel pricing.
"We are very disappointed with the actions taken by the State of Kentucky, and Marathon will vigorously defend itself in this enforcement action," said Gary R. Heminger, Marathon executive vice president and president of refining, marketing and transportation operations, said in a statement shortly after Stumbo's announcement. Marathon believes that the law, which [Stumbo] cited in bringing suit, is not only unclear, but unconstitutional. The [AG] himself has stated the law on price gouging is unclear, both today and previously. Due to the lack of clarity and other issues with the current law, Marathon [has] filed suit in federal court in Frankfort, Ky., challenging the constitutionality of the law and the interpretation taken by the [AG].
Last September, the KPMA board passed a motion "to clarify by legislation how long a Governor's Declared State of Emergency (that triggers the Price Gouging Law) stays in effect."
The board voted to approve the motion as they concurred that the price gouging statute was unconstitutional, as it set no time limits for an emergency declaration. At that time, the AG had already subpoenaed the records of several KPMA members. After many contacts by KPMA and our members to explain to legislators and the governor the reasons we thought the law was unconstitutional, HB 228 passed both the state House and Senate unanimously and Governor Ernie Fletcher signed the bill on April 5.
The new law, which takes effect this summer, will limit the state of emergency to a 30-day period. The old law that Stumbo based his allegations on is what HB 228 amends.
Marathon spokeswoman Angelia Graves told KPMA that "the company is not challenging the governor's powers, only the issue of time." She also noted, "Our No. 1 priority was to make sure there was enough gasoline for our customers."
University of Kentucky law professor Harold Weinberg called it "a pretty vague standard, said the association.
Obviously, by passing the amendments to the law that clarify the time period, Kentucky lawmakers agreed changes were needed, KPMA president and executive director Richard Maxedon said. "Several days prior to an election, to charge [Marathon] under an old, almost certainly unconstitutional law that was just unanimously amended by the General Assembly and signed by the governor, speaks for itself."Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.