TACOMA, Wash. -- Yellow caution tape still cordons off the pump islands at Hatem Shalabi’s former service station in Tacoma, Wash., and duct tape covers the Arco logos that once decorated the station. Both are casualties of an epic battle between a local service station owner and one of the world’s largest oil companies, according to a report in the News Tribune.
The station, once one of the highest-volume gasoline outlets in the state and a price leader in the Tacoma market, sells no gasoline these days, nearly 18 months after the Shalabi and Arco entered a legal battle over who controls what gas Shalabi can sell.
That battle continues in U.S. District Court, and resolution, at least according to the court calendar, is far off.
Shalabi once had a service station empire that stretched from Kirkland to Graham, Wash.; it’s now in limbo while the immigrant entrepreneur and Arco’s parent, BP, wage war in court, according to the report.
Some of Shalabi’s score of Arco stations are once again selling gas, but under new management. Shalabi’s largest station and others remain closed except for diesel fuel and convenience store sales.
The battle began in summer 2011, when Arco said Shalabi fell behind in his payments for gasoline delivered to his stations by Arco. The station owner claimed Arco was treating him and his business improperly, raising his wholesale prices to uncompetitive levels and requiring him to operate Arco’s ampm convenience stores at his stations when other Arco dealers weren’t burdened by that requirement.
Arco contended that Shalabi had agreed to buy his gasoline only from Arco when he bought the stations, the newspaper said.
Shalabi alleged Arco falsely told him the station properties were clean of pollution when he made the purchases. Later investigations, he said, required him to spend large sums to clean up the station properties.
At first Shalabi covered up the Arco logos at his stations and bought gas from other suppliers, but the oil giant told distributors that they could be named in its lawsuits against Shalabi unless they halted their sales, according to the report. The company sued one California company supplying Shalabi. His gasoline supplies were cut off.
News of Shalabi’s stand against the oil company brought inquiries from other BP and Arco dealers around the country who claimed they, too, had been mistreated.
Meanwhile, in federal court, Arco’s lawyers were steadily whittling Shalabi’s arguments against the company. One lawsuit was dismissed, but Shalabi has appealed that dismissal. Another case, originally set to be tried last fall, is now set for trial in October.
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