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