Texas Business reports: A Harris County jury rendered a $30 million verdict against the Houston-based owner of SunMart convenience stores.
In July 2008, the Texas Attorney General Office charged Petroleum Wholesale L.P. with defrauding gasoline purchasers.
The verdict came upon consideration of the state’s allegations that SunMart’s gas pumps at 86 stations in Texas provided less than a full gallon of fuel for each gallon charged.
“The jury’s verdict reflects a significant and well-deserved rebuke to SunMart’s fraudulent pump calibration scheme,” the attorney general’s office said in a prepared statement. “After carefully considering the evidence during an eight-week trial, the jury concluded the defendant illegally set its gasoline pumps to deliver less than a full gallon of fuel.”
Under Texas law, the Agriculture Commissioner is charged with regulating weights and measures – including gasoline pumps.
“This verdict sends a strong message that Texans will not tolerate being cheated out of their hard-earned money,” said Texas Agriculture commissioner Todd Staples said. “In Texas, we demand that we get what we pay for. One Texan cheated is one too many. The Texans who served on this jury have made a decision that will further strengthen consumer confidence and sends a clear signal that Texans will not tolerate deceptive sales practices by anyone.”
On July 18–20, 2008, dozens of inspectors with the Texas Department of Agriculture (TDA) conducted Operation Spotlight, a multi-county effort to inspect and test 1,701 gasoline pumps at 86 SunMart stores.
After testing 1,701 SunMart pumps, TDA investigators determined that 985 were dispensing less than a full gallon of fuel. According to court documents filed by the State, 58 percent of SunMart’s pumps were calibrated to dispense less than a full gallon of fuel.
While Operation Spotlight was still ongoing, PWI attempted to cover-up its improper calibration scheme by dispatching company personnel and third-party contractors to recalibrate pumps before TDA inspectors could reach all 86 SunMart locations.
Texas Agriculture Commissioner Todd Staples launched Operation Spotlight after he learned that PWI routinely failed TDA inspections.
Later, TDA referred their findings to the Texas Attorney General’s Office, which charged PWI with violating the Texas Deceptive Trade Practices Act. The State’s enforcement action indicates PWI illegally calibrated and maintained their fuel pumps in a manner that defrauded their customers.
During the eight-week trial, a team of four assistant attorneys general provided jurors 48 boxes of fuel receipts – which covered 5,766,243 gallons of gasoline and 727,339 fraudulent sales transactions. The jury’s $30 million verdict was based upon consumer transactions and penalties per violation of the DTPA. The jury found Petroleum Wholesale, L.P. liable for $18,765,411 in restitution, $8,494,212 in civil penalties and more than $2.7 million in fees to the state.
With the conclusion of the trial phase and the jury’s determination that PWI violated the law, the state will now seek a permanent injunction prohibiting PWI from calibrating its own gasoline pumps, according to the attorney general’s office. The state will also ask the court to bar PWI from using unlicensed calibrators to serve its pumps in the future. At this time, enforcement actions are still pending against Billy Wigginton, owner of KT Fuel Services, Inc., Arthur Ramirez and Daniel Miller. All three are charged with calibrating PWI’s pumps when they were not properly licensed to do so.
Assistant attorneys general John Owens, Pat Tulinski, Jennifer Roscetti and Robert Lemus represented the State of Texas in its case against PWI.