Chevron Still Faces Gas Temp Class Action

LOS ANGELES (CN) - Chevron must face a class action for unfair business practices from customers who say it buys gas at one temperature and sells it at another, a state appeals court ruled.

In his Superior Court class action, lead plaintiff Allen Ray Klein claimed that Chevron bought wholesale gasoline at 60 degrees Fahrenheit and sold it to California consumers at 70 degrees.

As gasoline expands as it heats up, Chevron sells less gasoline with less energy per gallon than it paid for it, the class claims.

The class also claims that Chevron paid an unfairly low tax rate due to the temperature difference and that consumers are unable to make fair price comparisons between retailers.

Chevron claimed the practice was allowed by California law. The trial court agreed to dismiss claims of breach of contract, unjust enrichment and unlawful business practices.

But claims of violation of the Consumer Legal Remedies Act and unfair and fraudulent business practices remained.

Chevron asked the court to drop these claims as well in light of a California Energy Commission report that "Automatic Temperature Compensation" fuel-pump technology would not lead to economic benefits for consumers.

The trial court agreed with Chevron, ruling that the Legislature was dealing with the problem the plaintiffs addressed in the lawsuit.

The plaintiffs appealed and the state's Second Appellate District agreed that the class still had a case against Chevron.

"The Legislature has not provided any alternative means of addressing the issues in plaintiffs' claims, nor has it provided any certainty that it will address those issues in the future," Justice Laurie Zelon wrote for the court.

"The trial court's order granting Chevron's motion for judgment on the pleadings is reversed. The trial court's order on Chevron's demurrer to plaintiffs' third amended complaint is affirmed. The trial court's order on Chevron's demurrer to plaintiffs' second amended complaint is reversed to the extent it sustained Chevron's demurrer to plaintiffs' claim arising under the 'unlawful' prong of section 17200. Appellants are to recover their costs on appeal."

Justices Woods and Jackson concurred.

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