Friday, September 22, 2023
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Franchisee Wins $50M Verdict Against Shell Oil

(CN) - A Los Angeles Superior Court jury took less than two days to award a gas station franchisee $50 million in punitive damages against Shell Oil, which allegedly hid information from the franchisee during his 10-month battle to buy the station.

Elias Atallah initially sued Shell for the right to buy the station under a federal law intended to protect franchisees. In a second lawsuit, Atallah claimed that just before the settlement of the first, Shell learned that Atallah's station would soon be required to undergo a series of expensive safeguards, which Shell hid from Atallah until after escrow closed.

Atallah said Shell intentionally failed to inform him that the Santa Ana Watershed Project Authority demanded that gas station operators install monitoring wells "and develop contingency plans to address leakage should it occur."

Shell also hid from Atallah the authority's plans to eventually shut down all gas stations in the area, the lawsuit claimed.

Atallah's station has been closed since 2003.

A jury found Shell guilty of intentional fraud and concealment in 2006 and awarded Atallah $1.65 million in compensatory damages, but it took more than eight years for Atallah to prevail on his punitive damages claim, according to a statement issued by Atallah's attorney, William Gwire.

"I think this case was Shell trying to send a message to all of its dealers who might think of taking them on," Gwire said. "Instead, I think the jury sent Shell the message that it needs to treat its dealers with honesty and respect."

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