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NEW YORK -- A Kansas federal judge allowed class claims against 7-Eleven and other convenience store and gas station retailers to move forward in an Aug. 15 ruling that refused to reconsider the defendants' motion to dismiss a "hot fuel" lawsuit, according to a Law360 report.
The multidistrict litigation alleges that the retailers sold gasoline without accounting for expansion that occurs when the fuel is at a temperature higher than the standard 60 degrees. When this occurs, consumers receive less energy for the same price. Plaintiffs claim that because the price per gallon was not adjusted for this expansion or disclosed to drivers, the retailers are liable under state law theories such as breach of contract, breach of warranty, fraud and consumer protection.
In June, defendants ConocoPhillips, ExxxonMobil, Shell Oil Products US and BP PLC subsidiaries BP Products North America and BP West Coast Products LLC agreed to pay a total of $21.6 million in settlement, as CSNews Online reported. However, 7-Eleven, QuickTrip Corp., Circle K Store Inc. and Kum & Go LC argued that the court did not have subject matter jurisdiction under the the political question doctrine. The companies stated that the definition of a gallon of gasoline couldonly be determined by Congress, and that a 2010 denial of their motion to dismiss was "clearly erroneous and manifestly unjust" based on developments over the past two years.
U.S. District Judge Kathryn Vratil disagreed, stated that the relevant issues could only be considered out of jurisdiction under "the most strained reasoning" of the doctrine, which would exclude the courts from addressing any matters related to weights and measures, according to the report.
"Defendants' arguments are no less flawed today than they were two years ago," Vratil said.
The judge added that this case differs from one the defendants used to bolster their arguments because it does not deal with issues that would require an "expert agency."
"The question here is whether defendants willfully omitted material facts, or engaged in unconscionable acts or practices, in connection with a consumer transaction in violation of the Kansas Consumer Protection Act," said Vratil. "This will require determining whether temperature is a material term to a retail motor fuel transaction."
Defendants also argued that plaintiffs' claims relied on proof that "the unit of measurement governing fuel sales is inherently misleading," stating that any remedy would require judgment on the wisdom of the metric. The judge dismissed this claim, stating the theory had been part of the case from the beginning and was not a new development to consider.
Defense attorney Tristan Duncan stated that the clients she represents are prepared to go to trial. "We believe that this is a frivolous lawsuit and we do intend to defend it to the full extent, " said Duncan.