D.C. suing Mamo gas stations over supply deals

August 27, 2013

More than a year after abandoning an antitrust probe of the District’s largest owner of gas stations, D.C. Attorney General Irvin B. Nathan has filed suit against companies owned by Virginia businessman Eyob “Joe” Mamo using a new legal tactic in a bid to lower gas prices in the city.

The lawsuit filed Tuesday in D.C. Superior Court alleges that “exclusive-supply agreements” between Mamo’s gasoline wholesaler and the independent dealers who operate Mamo-owned stations violate District laws regulating the gas retailing industry. ExxonMobil also is named as a defendant in the case because it established the agreements in question before selling 29 stations to Mamo in 2009 and can still enforce them through its supply contracts with distributors.

Mamo’s companies have exclusive-supply agreements with about 60 percent of the 107 gasoline retailers operating in the city, the lawsuit says. “As a result of these agreements, the [Mamo companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others . . . of the benefits of competition,” the complaint charges.

Mamo has long protested that his prices are reasonable, that exclusive-supply contracts are the industry “norm” and that he has been scapegoated for rising global oil prices. A spokeswoman for Mamo, Zinie Chen Sampson, said the exclusive-rights agreements are “legitimate” and “similar to operating agreements and dealer arrangements in jurisdictions across the country.” A call to ExxonMobil’s Dallas media relations bureau was not immediately returned.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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