Gas Station Dealers Sue Shell.
HOUSTON--(BUSINESS WIRE)--July 15, 1999--
Three hundred seventy-eight independent Shell gas station dealers, known as lessee-dealers, have brought suit against Shell Oil Company, Motiva Enterprises, L.L.C. (a joint venture of Texaco Inc., Shell Oil Company and Saudi Refining, Inc. - a corporate affiliate of the Saudi Arabian Oil Company - Saudi Aramco), Equilon Enterprises, L.L.C. (a joint venture of Texaco Inc. and Shell Oil Company), and Equiva Enterprises, L.C.C. (a Delaware corporation which provides administrative support services for Equilon Enterprises and Motiva Enterprises) in Texas state court, the 234th Judicial District, Harris County.
The lawsuit, filed on July 13, 1999 by the Houston-based law firm of Fleming & Associates, L.L.P., in coordination with the law firm of Jensen, Rosen & Steinberg, P.C., also of Houston, is a mass action filing brought on behalf of plaintiffs from the states of California, Florida, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Texas, Utah and Virginia. Additional lessee-dealers throughout the U.S. facing similar treatment from Shell, Motiva, Equilon and Equiva are expected to join the suit.
Under the terms of the suit, the independent station dealers allege that Shell and its joint venture partners have used their dominant position in the marketplace to prevent the small business owners from successfully running their gas stations. "Shell has targeted these individual gas station dealers and has used illegal, strong-armed business practices to force these individuals out of business," said attorney Katrina Von Hedemann.
The lawsuit claims that over the years Shell has engaged in unlawful price discrimination for Shell branded gasoline. The lessee-dealers also allege that Shell and its partners have committed fraud, breach of contract and have engaged in anti-competitive behavior in an unlawful tying arrangement in violation of the Texas Free Enterprise and Antitrust Act of 1983. "Shell and its partners have deliberately violated the terms of the contacts they hold with their lessee-dealers throughout the country," said Robert L. Steinberg, attorney. "Lower rack prices are being charged for gasoline sold to company-owned stations and jobber stations, while significantly higher prices -- tank wagon prices -- are levied for the gas which Shell and its partners supply to the independent lessee-dealer stations."
