LINCOLN, Neb. — If a convenience store advertises fuel at a low price on a price sign, should that fuel be available at all pumps? That’s the question behind a legal case in Nebraska that is pitting fuel retailer against fuel retailer.
In February 2017, Wilkinson Development, owner of the Fat Dogs c-store chain, was sued by the Coalition for Ethical Petroleum Marketing—a group representing local gas station and c-store owners—and four individuals who accused the chain of violating Nebraska’s Uniform Deceptive Trade Practices Act and the Nebraska Consumer Protection Act, the Lincoln Journal Star reported.
The lawsuit alleges that along Interstate 80, Wilkinson’s Fat Dogs had been advertising gas prices at prices that were much lower than other gas stations in the Wilkinson, Neb., area. But the plaintiffs said the advertised gas prices were available at only a couple of pumps at each Fat Dogs site, and that signage alerting visitors to limited availability were “substantially smaller signs, which are difficult to read and visible only once the motorist has pulled into defendant's gas station.”
One of the plaintiffs, Allison Cramer, pulled up to a Fat Dogs site in Lincoln, Neb., drawn by an advertised price she saw from a highway sign of $2.44 per gallon, according to the lawsuit. But once she filled up with fuel, she saw she had actually paid $2.89 per gallon. The Fat Dogs employee refused to reimburse her for the difference. The lawsuit says six Fat Dogs sites along I-80 near Grand Island, Lexington, Lincoln, North Platte, Ogallala and Sidney, were engaging in the same deceptive pricing.
Lancaster County District Judge Robert Otte is finally deciding on the case, Coalition for Ethical Petroleum Marketing v. Mark Wilkinson, the Journal Star reported. During the trial, Mark Wilkinson, owner of the Fat Dogs chain, defended his pricing to the judge by arguing that he was offering customers different products.
Wilkinson said Fat Dogs has added signage and more pumps offering the lowest-priced fuel. While he has received 48 complaints from the Nebraska Attorney General's office, Wilkinson said, “I get way more thank-yous than complaints.”
Dan O’Neill, owner of 24 Kwik Stop stores in Nebraska and Colorado, and a member of the Coalition for Ethical Petroleum Marketing, said he believes that Fat Dogs advertises low-price fuel to draw drivers to their sites but offers it only at a limited number of pumps in hopes that customers will unintentionally fill up with the higher-priced gasoline instead. He admitted during testimony that he had no proof that Wilkinson was purposely trying to deceive customers with his marketing practices.
O'Neill said the practice gives North Platte and the fuel industry a bad reputation and could prevent travelers from visiting and using one of the main I-80 exits to the city, exit 177.
"I have a huge investment in that intersection, and in the community," he said.
Wilkinson's attorneys countered that although the low-price fuel is not available at all of the Fat Dogs pumps, there is signage directing customers to those dispensers that offer the advertised fuel. (Wilkinson began adding this signage to settle a similar lawsuit in 2007.)
"There is nothing to suggest Wilkinson advertises a product that isn't available," said Daniel Klaus, an attorney for Wilkinson.
Another fuel retailer with a site next to Fat Dogs in North Platte—Cindy Halligan, owner of Mentzer Oil—said she has been using the same low advertised price practice to compete; however, she is not happy with her choice and would give up the practice if Fat Dogs did too.
"I don't believe it's right. You're telling them one thing, and when they get in there it's another," she said.
Judge Otte suggested it might perpetuate the string of litigation against Fat Dogs if he decides on the case instead of letting the Nebraska legislature come up with a fix.
"If the legislature can't figure it out, I'm not sure an injunction ... can figure it out," he said.
In fact, legislation was crafted in 2017 to target this price advertising practice. The bill is sponsored by Nebraska state Sen. John McCollister after his experience with the Fat Dogs chain. The legislation would, among other practices, prohibit a retailer from advertising the price of a gasoline blend that is not available at all fueling positions, and from offering the same grade of fuel at different prices; however, in 2018, consideration of the bill was indefinitely postponed.