SANFORD, N.C. -- Major regional convenience retailer The Pantry Inc. has been named as a defendant in seven class-action lawsuits this year involving the issue of "hot fuel," the company said in its latest 10-K filing with the Securities & Exchange Commission (SEC).
The plaintiffs in the lawsuits generally allege that they are retail purchasers who received less motor fuel than the defendants agreed to deliver because the defendants measured the amount of motor fuel in non-temperature adjusted gallons which, at higher temperatures, contain less energy, [image-nocss] said the Sanford, N.C.-based company.
The cases include one in Florida (Cozza, et al. v. Murphy Oil USA Inc. et al., filed February 16); one in Delaware (Becker, et al. v. Marathon Petroleum Co. LLC, et al., filed March 7); one in North Carolina (Neese, et al. v. Abercrombie Oil Co. Inc., et al., filed Match 7); one in Alabama (Snable, et al. v. Murphy Oil USA Inc., et al., filed March 26); one in Georgia (Rutherford, et al. v. Murphy Oil USA Inc., et al., filed June 5); and one in Tennessee (Shields, et al. v. RaceTrac Petroleum Inc., et al., filed July 13); and one in South Carolina (Korleski v. BP Corp. North America Inc., et al., filed September 24).
Pursuant to an order entered by the Joint Panel on Multi-District Litigation, all of the cases, have been or will be transferred to the U.S. District Court for the District of Kansas where the cases will be consolidated for all pre-trial proceedings, The Pantry said.
These cases seek, among other relief, an order requiring the defendants to install temperature adjusting equipment on their retail motor fuel dispensing devices. In certain of the cases, plaintiffs also have alleged that because defendants pay fuel taxes based on temperature-adjusted 60 degree gallons, but allegedly collect taxes from consumers in non-temperature adjusted gallons, the defendants receive a greater amount of tax from consumers than they paid on the same gallon of fuel. The plaintiffs in these cases seek, among other relief, recovery of excess taxes paid and punitive damages. Both types of cases seek compensatory damages, injunctive relief, attorneys' fees and costs and prejudgment interest.
The SEC filing also said that on Nov.16, 2007, Arnesa Jones, Burdeen Smith, Patricia Taylor and Sandra Holt, on behalf of themselves and on behalf of classes of those similarly situated, filed suit against The Pantry in the U.S. District Court for the Northern District of Alabama (Jones, et al. v. The Pantry Inc.). The plaintiffs seek class-action status and assert claims on behalf of the retailer's present and former employees for unpaid wages under the Fair Labor Standards Act.
The plaintiffs in this lawsuit generally allege that they were or are employed by The Pantry as store managers, but that their managerial duties were non-existent or minimal compared to their non-managerial duties. The plaintiffs further allege that the company required its store managers to work more than 40 hours per week for a salaried amount without overtime compensation.
The suit seeks permission to give notice of this action to all of the retailer's employees during the three years immediately preceding the filing of the suit and to all other potential plaintiffs who may be similarly situated. The plaintiffs also seek damages, liquidated damages, costs, pre-judgment interest and attorneys' fees and any injunctive or declaratory relief to which they may be entitled.
"We believe that there are substantial factual and legal defenses to the theories alleged in these lawsuits," The Pantry said concerning both the hot fuel and managerial cases. But it added, "As the cases are at a very early stage, we cannot at this time estimate our ultimate exposure to loss or liability, if any, related to these lawsuits."
It added, "Since the beginning of fiscal 2007, over 45 class-action lawsuits have been filed in federal courts across the country against numerous companies in the petroleum industry. Major petroleum companies and significant retailers in the industry have been named as defendants in these lawsuits."
The lawsuits came after the Kansas City Star published a series of articles in 2006 explaining the practice of selling hot fuel, added a report by The Triangle Business Journal.
The Pantry Inc. is a major independently operated convenience store chain in the southeastern United States and one of the largest independently operated convenience store chains in the country, with revenues for fiscal 2006 of approximately $6 billion. As of Sept. 20, 2007, the company operated 1,645 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner.
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