• BP Vows Federal Appeal of $417.3 Million Ruling in Debit-Card-Fee Case

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    BP is vowing a U.S. Supreme Court challenge to an Oregon verdict saying its
    West Coast operation must pay $417.3 million for not properly informing
    customers it charges a fee for using debit cards at its ARCO gas stations in
    the state.

    The verdict has already been upheld by an Oregon appeals court, and the state
    Supreme Court has declined to review the matter. But in its most recent
    earnings report, BP said it now intends to appeal the matter to the federal
    Supreme Court.

    The case was filed in December 2011 by Steven Scharfstein against BP West Coast
    Products LLC. It eventually became a class-action suit on behalf of more than 2
    million customers who used debit cards to purchase gas at Oregon ARCO or AM-PM
    service stations between Jan. 1, 2011, and Aug. 30, 2013, and were charged a
    35-cent debit-card fee, according to court papers.

    The suit contended that BP West Coast violated state consumer law by not
    disclosing the debit-card fee on street signage or at the gas pump and by
    charging customers more than the price displayed on the pump.

    The trial court ordered the company to pay $409.3 million in damages plus
    attorney fees and costs.

    When reviewing the company's appeal, the Court of Appeals of Oregon rejected
    BP's claims that since the debit-card fee was a flat charge and not a part of
    the price per gallon of the fuel, it wasn't covered by state regulations
    requiring the company post notice of the charge.

    The court used the example of someone buying two gallons of fuel priced at a
    store displaying a price of $2.50/gal. If the customer paid cash, the price was
    $2.50/gal. But paying with a debit card would raise the cost of two gallons to
    $5.35, or $2.67/gallon.

    The court also noted that the state attorney general in 2010 took steps to
    ensure debit-card fees were covered by consumer protection regulations "to
    address the numerous complaints that the Department of Justice had received
    'pertaining to disclosure of full service and added fees to use credit or debit
    cards.' "

    The appeals court also upheld the award of $200 in per plaintiff in the suit as
    allowed under state law, which BP had contended, at 571 times the fee charged
    the plaintiffs, was excessive. The court said the company knew once the suit
    was filed the amount of damages the plaintiffs were seeking, and its challenge
    after the verdict was rendered was untimely.

    --Steve Cronin, scronin@opisnet.com
    Copyright, Oil Price Information Service 

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