Vermont Gasoline Companies Have Been Gouging Customers For Years

FOR IMMEDIATE RELEASE

June 22, 2015

Contact: Michael L. Murphy

(202) 463-2101

MMurphy@baileyglasser.com

Vermont gasoline companies have been gouging customers for years

Dodging multiple investigations, a group of wholesale/retail gasoline corporations have engaged in price-fixing and other illegal conduct in northwest Vermont

The law firms of Bailey Glasser LLP and The Burlington Law Practice, PLLC filed a civil antitrust class action lawsuit today in the Superior Court of Chittenden County alleging effective and long-lasting agreements by Defendants R.L. Vallee, Inc., SB Collins, Inc., Champlain Farms/Wesco, Inc., and Champlain, Inc. to fix the price of wholesale and retail gasoline in northwestern Vermont.

For years, motorists in northwest Vermont have noticed that gasoline is far more expensive in their part of the state than it is in the rest of the state and nation. A class action lawsuit filed today charges a group of gasoline companies of conspiring to fix the price of gas at artificially high levels. The lawsuit is filed on behalf of “All citizens and businesses of the State of Vermont who purchased unleaded gasoline from June 1, 2005 to the present, either (a) from any gasoline station owned by the Defendants in the Class Area, or (b) from any gasoline station the Defendants supplied at wholesale in the Class Area.”

There have been multiple hearings and investigations into the high cost of gas in Chittenden, Franklin and Grand Isle counties, including a Federal Trade Commission study and a congressional investigation by the United States Senate Committee on Energy and Natural Resources.

Four companies named in the lawsuit—R.L. Vallee, Inc., SB Collins, Inc., Champlain Farms/Wesco, Inc., and Champlain, Inc.—control approximately 64 percent of the retail stations in the three northewestern counties, as well as having a veritable stranglehold on the wholesale market. “The manner in which these companies sell gasoline to the citizens of Vermont is illegal, anti-consumer, and wrong,” said Michael Murphy, an attorney in Bailey & Glasser LLP’s Washington, DC office.

These companies have had extraordinary profits that cannot be explained by legitimate market forces. At times, those profits have been twice the national average. During its study, the FTC concluded that gas prices in Greater Burlington in late June 2012 were 10 to 43 cents a gallon higher than reliable computer models would predict.

“By eliminating the competition between them, the largest wholesale and retail providers of gasoline in Chittenden, Franklin, and Grand Isle Counties were able to realize outsized profits and deprive Vermonters of the benefits of a free and fair market,” said John Roddy, an attorney in Bailey & Glasser LLP’s Boston office.

In an effort to maintain their cartel, Defendants have shown a willingness to freely engage in aggressive and cynical lobbying and legal efforts through the use of Vermont Act 250 under the guise of strident environmentalism. For example, Defendants have used Vermont’s environmental laws to prevent Walmart and Costco from entering the market and have purchased service stations only to remove the pumps and subsequently list the property at a substantially-reduced price. “It’s clear that the gasoline market in northwest Vermont is anything but free and we look forward to a full airing of these issues,” said Ora Nwabueze, an attorney in Bailey & Glasser LLP’s Washington, DC office.

During the course of state and federal inquiries, representatives of the four companies have been unable to provide adequate or reasonable explanations for the high prices and profits in this region.

It has become clear that the defendants have agreed to set their wholesale prices at nearly identical levels, and that they have agreed to increase, decrease or maintain those prices at or near the same time and by the same amount.

These actions have inflated prices both at the defendants’ stations and the many independent stations served by their wholesale businesses. “This situation – where people in the greater Burlington area have been forced to pay unfairly at the pump – needs to be remedied and this filing is a great first step towards that goal,” said Josh Simonds of The Burlington Law Practice, PLLC.

Using FTC estimates, the lawsuit alleges the improper profit earned by these companies may top $100 million in the last 10 years.

A copy of the Complaint in Jacob R. Kent v. R.L. Vallee, Inc., et al. (Chittenden County Superior Court) (Case No. 617-6-15) is available here: Complaint

The lawsuit was filed by a team from Bailey & Glasser’s Boston, Chicago, and Washington, D.C. offices: Michael Murphy, Ora Nwabueze, John Roddy, and Patrick Muench. Joshua Simonds of the Burlington Law Practice, PLLC is also counsel for plaintiff and the putative class.

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Founded by Ben Bailey and Brian Glasser in 1999 in Charleston, West Virginia, Bailey & Glasser LLP has grown to include nearly 50 lawyers, with offices in eight states and the District of Columbia. The firm’s complex litigation practice focuses on high-stakes commercial litigation; class actions for consumers, insureds, investors, and retirement plan participants; catastrophic injury and defective product cases; antitrust; and whistleblower lawsuits.  The firm has extensive experience in product liability law, and its lawyers routinely handle legal matters for injured individuals and consumers economically harmed by defective products.

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