Pat Moricca, President
BULLETIN BOARD
Screwed By Shell
My Shell station opened in October 1997, sharing the street with a Texaco competitor. This is a relatively new site with a great location, that is well-kept and offering great service from attendants in ties.
Shell, after buying Texaco assets, branded the nearest competing site Shell in 2002. They branded this site, within visual distance from my site, without regard to the fact there was an existing exemplary dealer already there.
In 2003, Shell purchased the station and became the fuel retailer. My supplier became my direct competitor. By year’s end, Shell had decided to provide fuel to its own site a different price than it sells to my site. My supplier gave itself a pricing advantage over its existing dealer, only a few blocks away, that was there first.
At each of these three decisions, Shell gave me no Compensation, no Consideration, and not even the Courtesy of a Conversation. It simply suited them to take actions that have critically hurt my small family business.
Shell’s corporate-owned station, as recently as January 2005, has sold to the public cheaper than the fuel was being delivered to me. This caused devastating losses for our family.
I had the audacity to object. I threatened to sue Shell, and made the decision to terminate my contract and re-brand with another supplier. My effort was quashed by my Shell distributor.
Shell now charges me more for fuel than every other Shell station in town. Does anyone else have the word "retribution" on their mind?
My family owns one gas station. We rely on it to survive, but we are losing money quickly. In my opinion, this is all Shell’s fault. Why are they trying to destroy my family’s business? They won’t answer.
We are on the brink of losing everything. My conclusion is: What’s wrong with our situation is Shell, and the people who work there. It appears to me that Shell is populated by employees and lawyers whose ethical standards are far below anything I would find acceptable. I would rather be doing business with Enron.
Shell makes a billion dollars plus a month, but they purposely chose to crush a local small businessman that sells their product for them. How does this serve their cause?
I urge everyone to find out who owns the station where you buy fuel. It could be a local dealer, a regional supplier, or it could be Big Oil itself. Support a local dealer-and don’t buy at stations owned by Big Oil, especially Shell.
On December 19, 2005, Exxon and Class counsel entered into a settlement agreement pursuant to which Exxon has agreed to pay $1,075,000,000 ($1.075 billion) in settlement of all claims and issues in the case. The settlement will not take effect until it has been finally approved by the Court. All claimants will receive a detailed written notice explaining all of the terms of the settlement. The form of this notice will be approved by the Court and we anticipate that it will be mailed to claimants sometime in January. When the form of the notice is approved by the Court, it will also be posted on this web site, along with a "Question and Answer" document that will answer questions claimants may have about the settlement. The notice will provide information on how objections, if any, may be filed, and it will set forth the date of the hearing that will be scheduled to consider approval of the settlement.
Class counsel believes that this settlement is terrific for the Class. Class counsel will be available to answer specific questions about the terms of the settlement after the notice is sent to claimants, but in summary, if the settlement is finally approved, it will provide as follows: Claimants will receive a full recovery of all compensatory damages and prejudgment interest through October 31, 2005, for all claims filed by December 19, 2005 that are approved by the Special Master in the claims process. The claims process will continue, but upon final approval of the settlement, Exxon will not be involved in the claims process any longer and will not appeal any aspect of the case. As a result, it is anticipated that the claims process will move much more quickly and there will be much less risk of adverse results on individual claims. The state governments of the 35 states in which dealer stations were located will participate in the claims process to ensure that the proper claimants are being paid. Class counsel will continue to be involved in the prosecution of every claim and will do everything possible to move claims to payment as quickly as possible. All of Exxon's set-off claims (counterclaims) against individual claimants will be dismissed. Any unclaimed money left in the fund after all legitimate claims are paid will go to the states (rather than Exxon) on behalf of the rightful owners to be held pursuant to the states' unclaimed property statutes.
The precise timing for consideration of the settlement is not known, but we anticipate that the Court will consider and preliminarily approve the settlement in early January 2006, allowing the notice to be mailed out to claimants. The final hearing likely will be in February or March. If the settlement is approved and no one appeals the approval, it would become final in March or April and its provisions would take effect. Any claim that had been approved by the Special Master as of that point would then be immediately presented to the District Court for final approval. Payment would likely occur within 30-60 days of final approval.
September 22, 2005
Madison, WI -- Eight members governors from Oregon, Wisconsin, Michigan, Illinois, New Mexico, Iowa, Montana and
Washington of the Democratic Governors Association (DGA) are calling for a federal investigation on possible gasoline gouging by oil companies.
In a letter to President Bush, Senate Majority Leader Bill Frist (R-TN) and House Speaker Dennis Hastert (R-IL), the governors urged Congress to investigate whether oil companies are taking advantage of American consumers through excessive profits in the wake of Hurricane Katrina.
The governors cited a recent study by University of Wisconsin Madison economist Don Nichols that suggests “gasoline prices have increased disproportionately in comparison to the price increases per barrel of [crude] oil.”
According to the letter, “This study affirms that a large profit is being made at the expense of American citizens and the skyrocketing prices of late can not be solely or even mostly attributed to Hurricane Katrina. However, when the wholesale price of gas went up by 60 cents almost overnight, oil companies were obviously using the most devastating natural disaster in our nation’s history to reap a windfall at the expense of American consumers. To price-gouge consumers under normal circumstances is dishonest enough, but to make money off of the severe misfortune of others is downright immoral.”
The Associated Press writes that, according to Nichols, historically the markup between the price of crude oil per gallon and a gasoline per gallon is about 85 to 90 cents a gallon, which includes refining, distribution and taxes.
According to the study, in order for retail gasoline prices to reach $3 a gallon, “the price of crude oil would have to be about $95 a barrel, but crude prices have been holding around $65 a barrel, and Katrina has not caused a surge in crude oil prices,” writes the news source. “The disconnect between gasoline and crude oil prices is quite remarkable,” Nichols said.
Additionally, the governors are urging Congress to pass legislation that would refund consumers profits of paying “outrageously inflated gas prices.”
The Petroleum Marketing Practices Act, passed in 1978, addresses the disparity in bargaining power between multinational energy companies and individual franchise operators, according to Robert Levine, a Miami lawyer representing the operators.
He said BP didn't want the operators falling under the protections of the law, so BP had them sign ''commission marketer'' contracts. Those contracts don't give the operators the rights held by franchisees, he said.
''We have alleged this program was created to circumvent the act,'' (PMPA) Levine said. ''It's your classic David-and-Goliath battle.'' The suits accuse BP of fraud and violation of the Florida Deceptive Unfair Trade Practices Act.
Griveas, 60, is hopeful the court will see the operators' side of the story. He said his claim was supported by a recent deposition from a BP Amoco representative who testified the contracts were intended to run the entire 12-year term.
The operators say they each invested from $100,000 to $300,000 in the stations they operate. None of the operators would have invested their life savings for a four-year contract.
Any and all oil company leases should be covered under the PMPA so that the oil companies can not trick and deceive some unsuspecting person into signing contracts where they can lose their investment and life savings.
The station owners were joined in their protest by Jack Merkl, a former oil company executive who is campaigning for a seat in Congress.
BP Amoco has converted a number of franchises dealers to commission marketers. The Petroleum Marketing Practices Act (PMPA), for franchise dealers addresses contract termination, non-renewal and right of first refusal.
Apparently pursuant to this policy Exxon Mobil is overpricing the station locations when they nonrenew franchisees at the end of the franchise. This is the situation which faced one of our members, Ben Kiana (Alafaya Crossing, Inc.). Ben Kiana received an offer pursuant to the PMPA to sell him his station but at a price he knew was way above the fair market value. The PMPA provides that upon nonrenewal because the Oil Company intends to sell the premises it must either offer the station to the franchisee at fair market value or give him an offer of first refusal made to a third party. With the assistance of our association attorney, Luis S. Konski, Mr. Kiana obtained his own independent appraisal which showed that Exxon Mobil’s offer was more than 25 percent ($200,000) above the fair market value and then attempted to negotiate the price with Exxon Mobil. Exxon Mobil refused and would not even provide its own appraisal of the property. Mr. Kiana brought suit in the Middle District of Florida and the case was assigned to United States District Judge John Antoon, II, an extremely conservative Judge, who up to this time has always found against dealers (none of whom were represented by Mr. Konski). Because of the excellent efforts of Mr. Konski, however, the Judge granted a preliminary injunction allowing Mr. Kiana to remain in the station while the case is sorted out.
The association urges you that even if you intend to use your own separate counsel in any franchise case, your attorney should seek the advise and guidance of Mr. Konski, early on, long before a case is filed. There is already too much bad precedent in Florida created because many of attorneys who represent dealers do not know what they are doing in this complex area of the law. They come up against extremely well prepared Oil Company attorneys, and the result oftentimes is a loss and bad law being created. Mr. Konski is a specialist in this area.
The Court finds that Plaintiff Alafaya Crossing, Inc., (Ben Kiana) has demonstrate its entitlement to a preliminary injunction under the Petroleum Marketing Practices Act. Accordingly, it is ORDERED and ADJUDGED that Exxon/Mobil Corporation and all others purporting to act on its behalf are enjoined and restrained from disabling, removing, destroying, or otherwise interfering with the equipment and improvements at Plaintiff Alafaya Crossing, Inc.’s, business operations at the franchise location, which may include Plaintiff dispensing fuel from an alternate fuel supplier. However, Defendant Exxon/ Mobil Corporation may reasonably cover up any trademark signage at the location without removal of any equipment or sales signs until a hearing on the issue of the fair market value of the property or until further order of this Court.
IT IS FURTHER ORDERED that no bond will be required under the present circumstances, and this Preliminary Injunction shall become effective without Plaintiff posting a bond with the Clerk of this Court.
To often the oil companies rely on the fact that the dealer will not challenge the oil company’s outrageous appraised value of the station property and walk away. The reason for the outrageous appraisal is to eliminate the gasoline station from the marketplace and less competition for the oil companies.
An appeal in the 9th Circuit California dealers’ case against Equilon, Shell and Texaco was won by the dealers in a stunning reversal. On August 31, 2000, U.S. District Judge M. James Lorenz in his opinion granted Equilon’s motion for summary judgment - throwing out the case.
On September 29, 2000, an appeal was filed to the United States Court of Appeals for the Ninth Circuit in San Francisco, of the Abrahim & Son et al vs. Equilon Enterprises LLC et al, dismissal. Oral argument was held in the Abrahim appeal before the United States Court of Appeals for the Ninth Circuit on February 6, 2002.
On April 2, the San Francisco Examiner reported that the Appeals Court has sided with dealer plaintiffs and reversed the dismissal. The opinion states that Judge Lorenz erred in dismissing the case and that the transfer of the service station properties to Equilon was a sale, transfer or assignment as described in the California law requiring the companies to give their dealers the first right of refusal to purchase the station properties.
Now that the lower court decision to throw out the Abrahim case is reversed, the case will go back to the lower court, just where it was when the trial court dismissed it. There was pending before the court a motion to convert the case to a class action, on behalf of all California Shell and Texaco dealers whose station properties were owned by Shell and Texaco in 1998 and were assigned to Equilon.
This could be a huge victory for Shell dealers who experienced tremendous rent increases and inflated station prices. This decision will raise many questions.
1) Will the transfer price to Equilon be the price offered the dealers?
2) What recourse do dealers and ex-dealers have regarding damages and losses incurred, due to Shell’s actions of not selling the properties to them?
3) What recourse may dealers have regarding loss of income due to Shell’s actions?
The truth is finally out about the oil companies being responsible for high gasoline prices through manipulation of supply and price. Congress is finally asking the questions that we the franchise dealers have known the answer for many years. The spin and deception of answers is what oil companies have been feeding the public and news media concerning why gasoline prices are high. The oil companies pressure to eliminate franchise dealers will have a monopoly where the consumer will pay high gasoline prices. Our legislators are on the right issue of investigation into the oil industry.
New Jersey's half-century ban on self-service gasoline may go the way of spinning digits on gas pumps.
The state is one of only two nationally - Oregon is the other - where pumping it yourself is forbidden, and could result in as much as a $500 fine.
With the state facing a budget gap and cuts in federal highway funds, speculation about a potential increase in the gas tax has circulated in the Statehouse since early this year.
The resulting higher gas prices may mean the death of the ban, as retailers struggle to keep pump prices down.
To: Gasoline Retailers Association of Florida
From: Insurance Office of America
Re: Payroll & Health Insurance Services
Dear Retailers:
Insurance Office of America, one of the fastest growing insurance agencies, has partnered with several employee leasing companies to bring you discounted health insurance programs for you and your employees. Several programs are available offering a wide variety of companies and plans to choose from. Health insurance rates are increasing drastically and becoming more and more unaffordable for employers and employees. By joining forces with a large number of employers through an employee leasing relationship, health insurance is much more affordable!
Insurance Office of America health insurance program has the endorsement of the Gasoline Retailers Association of Florida.
In addition, you and your employees will have access to other top quality benefits.
Please contact:
Lauren Wallace 800-243-6899 ext 5440 for information.
The repeal attempt of the Florida Below Cost Selling Law (MFMPA) by Wal-Mart and Murphy Oil was defeated by the efforts of the Gasoline Retailers Association of Florida and the Jobbers of Florida. Join today and help the fight to stop the discounters (Big Boxers), who are selling gasoline below cost in violation of the MFMPA to eliminate competition. File a complaint against anyone you THINK that is selling gasoline below cost. For complaint forms, information and application contact the Gasoline Retailers Association of Florida @ 407-774-9700 or e-mail pat@flagas.com.