A federal District Court judge today imposed the maximum fine of $50,000 each on five independent oil companies that were convicted last month of a criminal conspiracy to fix the price of $4 billion worth of gasoline.
The antitrust case, which was prosecuted by the U.S. Department of Justice, involved the sale of 17 billion gallons of ags in Maryland, New York, New Jersey, Delaware, Pennsylvania, Virginia and Washington, D.C. from 1967 until 1974.
The convictions against the five firms could threaten these small companies with far more damaging prospects than the $50,000 fine. The convictions can be used in civil lawsuits by any customers of the five firms who wish to sue for damages.
These suits, if successful, would leave the oil companies liable to pay triple damages - three times the financial harm any of their customers could prove.
Convicted last Aug. 30, after six days of jury deliberations, were: Ashland Oil Co. (which sells gas under the brand names Red Head, Payless and Rotary), Amarada Hess Corp. (Hess), Petrolum Marketing Corp. (Scot), Meadville Corp. (Merit, Saveway and Martin) and the Kayo Oil Company (Kayo). Also convicted was the firms' trade association. The Socity of Independent Gasoline Marketers of America, and that group's executive director, Robert C. Covin.
The jury acquitted Continental Oil Co and crown Central Petroleum of the antitrust violations.
The prospects of its possible losses apparently doesn't bother at least one of the oil companies. Ashland Oil Co., a worldwide refiner ranked 43d on the Fortune 500 list of American coporations, said it would appeal the convictions to the Fourth U.S. Circuit Court of Appeals in Richmond.
Ashland media relations representative Donn Rooks, reached at company headquarters in Ashland, Ky., said, "We're a $3.4 billion corporation, that's the business we did last year. So I don't think we'll be going bankrupt any time soon."
No spokesmen for the other four firms could be reached for comment today.
Minutes before announcing the sentences today, Judge Blair said, "I think they jury's verdict was a very discriminating one . . . what it comes down to is I am in agreement with the jury. I am in agreement . . . that there was a conspiracy.
If the seven year conspiracy had extended for three more weeks - the indictment charges that it ended November 30, 1974 - the oil companies would have been subject to fines of up to $1 million each under new legislation that increased the penalties for such corporate antitrust violations.
In addition to senctencing the oil companies, Judge C. Stanley Blair sentenced their trade association. The Society of Independent Gasoline Marketers of America (Sigma), to pay a $25,000 fine.
The executive director of the association, Robert R. Cavin, 56, of Vienna, Va., was sentenced to pay a fine $5,000 "out of his personal assests." Cavin must also serve three years probation for his role in the conspiracy.
During testimony in the 3 1/2 month trial, which resulted in a guilty verdict, Aug. 20, Cavin said that he relayed the news of impending price increases of gas only as a service for SIGMA's 200 member organization. He denied ahe had been part of a criminal agreement.
The government, however, accused the association of knowingly acting as a clearinghouse for price information during the price-fixing scheme.