Appeal Heard on ‘Hot Fuel’ Class Action Settlements

​Last month, the Tenth Circuit heard argument in CEI’s appeal of the “Hot Fuel” settlements. This is the case where the plaintiffs sued most major gasoline retailers and refiners in the country over the alleged “fraud” of selling gasoline on a volumetric basis (i.e., by the gallon) without disclosing the laws of thermodynamics. The cases settled in various ways. Some defendants agreed to convert their pumps from volumetric distribution to automatic temperature compensated (ATC) distribution (i.e., the Canadian way​). Some defendants agreed to reimburse franchisees that convert their retail pumps to ATC. Some defendants agreed to pay into a slush fund that will be used to lobby state regulators in favor of ATC.

The panel of Judges Lucero, Moritz, and Phillips was active, inquisitive, and appeared justifiably skeptical that the proclaimed “informational benefits” of ATC conversion are actual benefits. Judge Phillips in particular referred to the case as having nothing more than nuisance value, as it depends on being ignorant of basic propositions of physics that are covered in sixth grade science. A harsh, yet warranted, critique. But it’s too soon to say whether everyone lined up at a Valero in January 2018 for some gas on a frigid morning will really be getting slightly less than the 12 gallons of gas they think they are getting.

For those of you who want to learn more, you can listen to the whole argument here, or visit the case page containing our briefs here.