Judge Grants Final Approval of $1.075 Billion Settlement Agreement
Between ExxonMobil and Dealers in Discount for Cash Class Action Litigation
April 5, 2006
Federal District Court Judge Alan Gold has granted final approval of the settlement of a long-running dispute between ExxonMobil Corporation and a class of its service station dealers under which ExxonMobil will pay $1.075 billion to end its opposition to dealer claims in the claims process established by the Court.
The lawsuit, filed in 1991, arose out of ExxonMobil’s Discount for Cash program in effect between 1983 and 1994 in which ExxonMobil had promised its service station dealers a discount in the wholesale price of motor fuel. After a lengthy trial, in February 2001, a jury found that ExxonMobil had breached its obligation to provide the discount, and had fraudulently concealed the breach. ExxonMobil appealed the verdict all the way to the United States Supreme Court, but the Supreme Court rejected ExxonMobil’s last appeal in June 2005. The settlement was achieved as a court-appointed Special Master was in the process of assessing damages against ExxonMobil on individual dealer claims.
After all members of the class were given notice of the proposed settlement and an opportunity to object, a single class member filed an objection. At an April 5, 2006 hearing to consider the final approval of the settlement, District Judge Gold denied the objection, finding it to be frivolous. The $1.075 billion payment represents payment in full of all compensatory damages, with prejudgment interest through October 31, 2005 on all valid claims filed by December 19, 2005. ExxonMobil is obligated to make the payment into a settlement fund within 35 days. The claims process before the Special Master will continue without ExxonMobil’s further involvement which is anticipated to accelerate the approval and payment of individual dealer claims.
In papers filed with the court, one of the leading commentators on class actions, Columbia law professor John C. Coffee Jr., stated on behalf of the lawyers representing the class: “This is a one-of-a-kind case. I do not expect that I or this Court will see a truly similar case in the future. No other action that I have seen approaches this one in the degree of success obtained for the class, the effort expended by class counsel, or the risk assumed.”
“This is the latest step in bringing this case to a successful conclusion,” said Miami attorney Eugene Stearns of Stearns Weaver Miller, who represented the Class at trial and on appeal. “I am flattered that a world-renowned expert like Professor Coffee shares our view of the success of this case. We look forward to the conclusion and payment of each dealer’s claim in the claims process.”
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