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The Lawyers Win on Hot Gas

I recently wrote an essay called A Lost Litigation Opportunity in which I discussed the root of the so-called ‘hot gas’ issue. I firmly believe that this is all about the big business of lawyers who sue people for a living. The California Energy Commission had ruled out temperature compensation equipment, saying that consumers would pay more because retailers would pass on the cost of the equipment.

I thought the issue would now fade away, but a recent story involving Costco suggests that the litigators – like those behind certain ‘consumer organizations’ who have pushed this issue so hard – are starting to profit:

Petroleum Marketers Respond to Costco’s Attempt To Settle ‘Fair Fuel’ Lawsuit

Here are the interesting bits:

“But it [settlement] saves Costco the costs of defending themselves in this class-action litigation,” Gilligan added, noting there are 120 other retailers and groups being sued.”

“Unfortunately, trial attorneys have become quite skilled at presenting companies with difficult decisions: either incur significant expense to erect a legal defense against outrageous claims or cut costs by reaching some sort of settlement. Neither are attractive options when the retailer has done nothing wrong, but the trial attorneys are good at setting this trap.”

One other point: Costco’s agreement including payment of the plaintiffs’ attorney fees.

That’s what this is all about. It won’t save consumers a dime. In fact, it will cost consumers, and it will cost retailers. But trial lawyers that back phony consumer organizations who them drum up controversies should do OK.

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May 3, 2009 - Posted by | gasoline, litigation

8 Comments

  1. It’s interesting that Costco is being sued for not doing something which is illegal. And they still don’t want to go to trial.

    Comment by robert | May 3, 2009

  2. It’s interesting that Costco is being sued for not doing something which is illegal. And they still don’t want to go to trial.

    Comment by robert | May 3, 2009

  3. It’s interesting that Costco is being sued for not doing something which is illegal. And they still don’t want to go to trial.

    Comment by robert | May 3, 2009

  4. Lawyers sue all the time over issues that aren’t illegal. If they had to stick to situations where someone broke the law, we would have a lot fewer lawyers. Costco made a business decision, as the litigation looks to go on for a while (and be very costly).

    RR

    Comment by Robert Rapier | May 4, 2009

  5. Lawyers sue all the time over issues that aren’t illegal. If they had to stick to situations where someone broke the law, we would have a lot fewer lawyers. Costco made a business decision, as the litigation looks to go on for a while (and be very costly).

    RR

    Comment by Robert Rapier | May 4, 2009

  6. Lawyers sue all the time over issues that aren’t illegal. If they had to stick to situations where someone broke the law, we would have a lot fewer lawyers. Costco made a business decision, as the litigation looks to go on for a while (and be very costly).RR

    Comment by Robert Rapier | May 4, 2009

  7. Usually the behavior Lawyers wish you to perform is something that would be legal to do.

    Comment by robert | May 5, 2009

  8. Usually the behavior Lawyers wish you to perform is something that would be legal to do.

    Comment by robert | May 5, 2009


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