Judge Tells Exxon Mobil to Start Paying Station Owners $1.3 Billion Award

U.S. District Judge Alan S. Gold is ordering Exxon Mobil Corp. to start paying as many as 10,000 gas station owners awarded $500 million four years ago because the company overcharged them for gasoline for a dozen years. With interest, the award has grown to $1.3 billion. In his decision, Gold said Exxon has attempted to make a "judicial train wreck" of the claims payment process and wants to prolong the lawsuit, filed 13 years ago.

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A judge is ordering Exxon Mobil Corp. to start paying as many as 10,000 gas station owners awarded $500 million four years ago because the company overcharged them for gasoline for a dozen years. With interest, the award has grown to $1.3 billion. U.S. District Judge Alan S. Gold also entered a final judgment Wednesday against Irving, Texas-based Exxon Mobil, the world’s largest publicly traded oil company. The jury decided in 2001 that the company owed about half a billion dollars to the station owners. With interest building since 1983 — when the overcharging started — the value of that judgment ballooned to $1.3 billion. The average for each owner in 34 states and the District of Columbia is estimated at $130,000. Exxon and Mobil merged in 1999. In March 2004, the 11th U.S. Circuit Court of Appeals in Atlanta refused to reconsider its earlier ruling supporting the verdict in the class action lawsuit. Since then Exxon has paid only the nine dealers specifically named in the lawsuit, said Eugene Stearns, an attorney representing the dealers. In his decision, Gold said Exxon has attempted to make a “judicial train wreck” of the claims payment process and wants to prolong the lawsuit, filed 13 years ago. Gold said Exxon makes $238 million a year from interest on the $1.3 billion as long as it keeps the money. He ruled that if Exxon further appeals individual claims that have been decided, the claimants will earn funds with an interest rate equal to the company’s reported earnings on the money. That will “eliminate Exxon’s ability to earn money on the money it wrongly retains as a result of its bad faith scheme,” the judge said. Exxon has taken a charge of $550 million after taxes to pay the dealers, but the company wants to make sure only dealers that were damaged receive the money. The company will also appeal Gold’s order, said Prem Nair, the company’s spokeswoman. “We are seeking clarification on a number of legal issues that were not resolved by the appeal process with regard to the individual claims that have been filed,” Nair said. “We disagree with the sanctions and plan to file an appeal.” Exxon began charging dealers a 3 percent processing fee on gasoline sales paid by credit cards in 1982. The company promised to offset the charge by cutting the wholesale cost of the fuel. Exxon did that for six months, reducing the wholesale price by 1.7 cents a gallon. Exxon stopped the offset in March 1983 but didn’t tell the dealers, who didn’t notice for eight years. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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