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A Miami jury has awarded several thousand gas station dealers more than $500 million in the second trial of a breach-of-contract class action against Exxon Corp. Prejudgment interest dating back to 1983 will increase the final judgment to more than $1 billion. In the first trial, in September 1999, a Miami jury had voted overwhelmingly for Exxon but had failed to reach a unanimous decision, leading to a mistrial. The second trial involved “the same facts, the same circumstances,” said plaintiffs’ counsel Eugene E. Stearns of Miami’s Stearns Weaver Miller. But the plaintiffs’ attorneys were better able to convince the second jury by turning to a more visual presentation of the case, he said. The plaintiffs had charged Exxon with failing to fulfill a promise to give the dealers a reduction in wholesale gas prices in return for participating in a discount-for-cash program, said Stearns. The plaintiffs also alleged that Exxon had instituted the program in 1982 after deregulation of the oil industry, in order to squeeze money out of the dealers, Stearns said. Under the terms of the program, he said, dealers gave customers a discount if they paid in cash. In turn, Exxon would give the dealers a discount on the wholesale price of gasoline, he said. Initially, this discount was passed on to the dealers, but Exxon “implemented a long-term version in January 1983, raising the wholesale price,” Stearns said. Exxon assured the dealers that the discount was reflected in the wholesale price, Stearns said. “But the dealers couldn’t tell from Exxon invoices whether they were getting the promised discount to offset the higher charge for credit-card purchases,” Stearns asserted. DEALERS HAVE QUESTIONS The dealers continually asked Exxon executives, ” ‘Where’s the discount for cash?’ and Exxon kept telling them, ‘It’s built in the wholesale price,’ ” said Stearns. But at a national meeting of Exxon dealers in November 1990, he recounted, “ Jim Carter, the director of Exxon marketing, told the dealers, ‘It’s a new day. You haven’t been getting the discount, but you will be getting it now.’ Carter denied saying this,” Stearns said, “but by then it didn’t matter.” Based on what they believed Carter said, the dealers sued Exxon, charging breach of contract. During discovery, Stearns charged, “we uncovered Exxon’s business plan, that they intended to lie to the dealers.” By the time of the lawsuit, he said, each of the dealers had lost thousands of dollars through the program; thousands had been forced out of business because of the profit squeeze, he asserted. Allapattah Services v. Exxon Corp., No. 91-0986CIV-Gold (S.D. Fla.). In the first trial, the jury was unconvinced by the plaintiffs’ presentation. As a result, said Stearns, “this time we presented the case in a fashion that was more comprehensible.” In particular, the plaintiffs’ team turned to illustrations and visual aids to explain the complicated facts and theories of the case. One key dispute between the parties was over how the wholesale prices to the dealers were determined. “Exxon said that they provided the offset on the wholesale prices by comparing the wholesale prices of their principal competitors,” Stearns said. “But Exxon didn’t know the prices of its competitors. This was made out of whole cloth.” LACK OF ILLUSTRATIONS In the first trial, the plaintiffs’ presentation of its contention that Exxon could not know the wholesale prices was made verbally. “We used no illustrations and the jurors couldn’t follow it,” said Stearns. This time, he said, the plaintiffs’ team presented an illustration of three cars traveling down I-95. One car on the road was marked with the retail price for Exxon gas, another the wholesale price and the third the spot price. Then, next to the three cars, the plaintiffs placed an illustration of an 18-wheeler, which represented antitrust laws and corporate secrecy, he said. “All the competitors were on the other side.” The illustration showed, he said, that Exxon could not have seen over the 18-wheeler and “they didn’t know what their competitors’ prices were.” Throughout the plaintiffs’ presentation, he said, the attorneys turned to the highway analogy to press this point. “It was one key to winning,” he added. Exxon contended, said company spokesman Tom Cirigliano, “that the discount-for-cash program compensated dealers fairly.” But on Feb. 20, the second Miami jury found for the plaintiffs, ordering Exxon to pay an average of 1.4 cents per gallon for the 40 billion gallons of gas purchased by the dealers over a 12-year period. This adds up to more than $500 million, said Stearns, who tried the case with Anthony Menendez and Mark Aikeman of his office and Jay Solowsky of Miami’s Pertnoy Solowsky and Allen. Exxon contends that each claim will have to be filed and decided separately, said defense attorney Larry Stewart of Miami’s Stewart, Tilghman, Fox & Bianchi. The final amount paid, even using the jury’s price, may not reach $500 million, he said. The court will decide this issue. Exxon has vowed to appeal. One unusual aspect of the trial, Stearns said, was that he is usually a defense attorney, representing large corporations, while Stewart, who represented Exxon, is a leading plaintiffs’ attorney. “It was an unusual role for both of us,” Stearns said. “I guess I made the adjustment better than he did.”

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