A federal jury Tuesday ordered Exxon Mobil Corp. to pay millions of dollars to 10,000 gas station owners around the country who said they were overcharged for gasoline for 12 years.
A U.S. District Court jury in Miami issued the judgment following a lengthy trial after a first attempt to try the class-action lawsuit ended in mistrial in 1999.
Plaintiffs’ attorneys said the verdict will yield an award of at least $500 million. With interest, the award will come to about $1 billion, said Miami attorney Gene Stearns.
“I’m ecstatic,” said Bill McGillicuddy of Arlington, Va., one of the named plaintiffs in the class-action lawsuit and an operator of four Exxon stations.
Dealers in 35 states and the District of Columbia were covered by the verdict, but none was in Illinois.
The lawsuit alleged that Exxon, before its 1999 merger with Mobil, cheated the station owners out of promised discounts between 1982 and 1994. The heart of the case was a discount program that charged cash customers less than credit card users but added 4 cents per gallon to the station owners’ price.
Exxon promised to cut wholesale prices to make up for the credit card charge. Station operators claimed that the offset lasted for only six months, and that Exxon manipulated wholesale prices to erase it for the rest of the program without the owners realizing it.
The dealers said they were to receive a discount on the gasoline they bought wholesale from Exxon. They said they suspected for years that they had not been receiving the discount but could not tell from Exxon’s invoices. They said they were to receive a discount of more than a penny on 40 billion gallons of gasoline, adding up to $500 million.
At a 1991 dealers meeting in Houston, a top Exxon official admitted that dealers had not received the discounts but promised they would from then on, Stearns told the jury.
Exxon’s attorneys said the dealers did receive the discounts and that they also benefited from the program because it allowed them to cut prices at the pump, better competing against smaller rivals who accepted only cash.
Exxon Mobil attorney Larry Stewart said the oil giant will appeal. He said the trial judge must conduct further proceedings to determine the damage amount.
“We continue to believe that we provided the offset and gave dealers a very fair price and that ultimately on appeal Exxon’s business practices will be vindicated,” Stewart said.
If Exxon Mobil does appeal, the owners plan their own appeal of a decision by U.S. District Judge Alan Gold that eliminated the possibility of punitive damages.
For Exxon Mobil, the verdict is another in a series of judicial setbacks.
In December, an Alabama jury returned a $3.5 billion verdict over royalties Exxon was accused of failing to pay to the state for offshore natural gas wells. Exxon Mobil has filed a motion to set aside the verdict; a hearing is set for mid-April.
In October, the Supreme Court refused to set aside a $5 billion judgment over the 1989 Exxon Valdez oil spill in Alaska. The company has other appeals pending.
