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Exxon Fined $500 Million for Cheating Station Owners
By Catherine Wilson   Associated Press
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MIAMI — Exxon Corp. cheated 10,000 station owners out of $500 million over a 12-year period by inflating wholesale fuel prices, a federal jury ruled Tuesday in awarding that amount.

The judge may decide later to add interest from the pricing program that ran from 1983 to 1994 and was supposed to tie fuel prices to retail prices on credit card purchases.

If interest is added, it would raise the verdict's value to $1 billion, said Eugene Stearns, attorney for station operators.

Exxon attorney Larry Stewart promised an appeal, saying, "We continue to believe that we provided the offset and gave dealers a very fair price and that ultimately on appeal Exxon's business practices will be vindicated."

The heart of the case was Exxon's creation of a discount-for-cash program, which charged cash customers a cheaper per-gallon price for gasoline but added 3 cents per gallon to the station owners' price.

In return, Exxon — now Exxon Mobil Corp. — promised to cut wholesale prices to make up for the credit card charge. Station operators claimed the offset was paid for only six months, and Exxon manipulated wholesale prices to erase it for the rest of the program without the owners realizing it.

The overcharge ranged from 1.03 cents to 1.4 cents per gallon; over 40 billion gallons, it totaled $500 million, the owners contended.

The nine-member jury awarded station operators in 35 states everything they sought.

Even with interest, Stearns said Exxon, by retaining and investing the money, "will be about $2 billion better off having kept the money."

For all of 2000, the Irving, Texas-based Exxon Mobil, the world's largest publicly traded oil company, earned $17.72 billion on revenue of $232.7 billion.

If Exxon appeals as promised, the owners plan to appeal a decision by U.S. District Judge Alan Gold eliminating the possibility of punitive damages. Nonetheless, they were pleased with verdict.

"I'm ecstatic," said Bill McGillicuddy of Arlington, Va., one of the named plaintiffs in the class-action lawsuit and an operator of four Exxon stations.

"Of course I am very thrilled," said Alan Popick of Coral Springs, an Exxon dealer before the company pulled out of Florida in 1993. "The jury saw what the truth really was and was able to bring justice."

Gold gave attorneys two months to file papers outlining a system for paying individual station owners based on credit card charges they paid Exxon.

The jury reached its verdict on a complex 15-page form to end the six-week trial after deliberations spread over four days.

Exxon Mobil has been on the losing side in a number of other recent court cases.

In October, the U.S. Supreme Court refused to free the energy giant from having to pay $5 billion in damages for the 1989 Exxon Valdez oil spill in Alaska, the nation's worst ever.

Exxon Mobil also lost a $3.5 billion verdict in December over royalties Exxon was accused of failing to pay the state of Alabama for offshore natural gas wells.

Shares of Exxon Mobil were down 6 cents to $83.96 in trading on the New York Stock Exchange.

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