A federal judge has made it easier for many customers of cut-rate gasoline distributors who were involved in a price-fixing case last year to recover what may amount to millions of dollars in damages from the companies involved.
U.S. District Judge C. Stanley Blair issued a ruling in Baltimore that designates taxi and limousine companies, car dealers, credit card holders and gas stations as automatic beneficiaries if several pending suits against seven cut-rate gas firms are successful. Five of the firms, along with their trade association and one of its officers, were convicted last August of conspiring to fix high prices of $4 billion worth of gasoline between 1967 and 1974.
The ruling means that large numbers of gas consumers may automatically be eligible for treble damages from the companies even if they haven't gone to court themselves to file suit against the cut-rate firms.
Attorneys involved in the case said yesterday that the ruling significantly broadens the scope of the civil damage cases against the cut-rate firms, but added that they did not know how many persons or companies might be involved. Attorneys also said that it is not yet clear how much money may be involved, but that it will certainily be millions of dollars.
In the criminal antitrust case against the firms last year, a jury found that five of them had operated an intricate network of telephone calls coordinated through their trade association, the Society of Independent Gasoline Marketers of America, to hold prices no lower than two cents below major oil companies' rates.
Convicted were: Ashland Oil Co., which sells gas under the brand names Red Head, Payless and Rotary, Amarada Hess Corp. (hess), Petroleum Marketing Corp. (Scot), Meadville Corp. (Merit, Saveway and Martin) and Kay Oil Co. (Kayo). Also convicted were SIGMA and its executive director, Robert R. Cavin.
Last September, Blair imposed the maximum fine of $50,000 each on the convicted companies. The antitrust case, which was prosecuted by the U.S. Department of Justice, case, which was prosecuted by the U.S. Department of Justice, involved the sale of 17 billion gallons of gas in Maryland, New York, New Jersey, Delaware, Pennsylvania, Virginia and the District of Columbia over an eight-year period.
Although the jury acquitted Continental Oil Co. and Crown Central Petroleum of the antitrust violations, they are named along with the convicted companies in six civil damage suits that were filed by customers of the companies after the indictments were originally handed down.
It is these suits that, class actions under Blair's ruling have become class actions.
While the designated classes do not include all customers of the seven companies, the judge specified that taxi and limousine companies, automobile dealerships, persons who bought gas from the firms by using credit cards and independent gas stations that to bought gas from the frims may all collect damages. If the suits are successful.
The criminal case had been followed closely in the oil industry because it was thought that millions of dollars in civil damage lawsuits, more likely to be successful after a criminal conviction, could affect the stability of some of the smaller cut-rate distributors.
"That kind of civil action will break the independents and break them real quick," SIGMA President Herbert A. Sostek was quoted as saying at the time of the quaility verdict.
Yesterday, however, lawyers in the case who could be reached were not sure how the companies would be affected if the civil suits are successful.
John Lewin, an attorney for Amarada Hess Corp., said he thinks the smaller companies like Petroleum Marketing Corp. and Kayo Oil may be affected if they must pay out heavy damages.
Peter Sommer, an attorney for one of the plaintiffs in the civil actions, however, said success in the suits would "definitely not" drive any of the oil companies out of business.
"They've been in a good business for a number of years and I doubt this would affect them so much financially," he said.
Attorneys said Continental Oil, for one, was unlikely to be deeply affected by adverse civil decisions in the cases. Continental is a worldwide petroleum refiner considered the 17th largest. American oil corporation in 1977 by Fortune magazine.
Last year's criminal conviction has been appealed and the appeal decision is pending.