The state of Tennessee has settled a gas gouging complaint against a Knoxville-area retailer.
Weigel's Stores, Inc. has decided to end its fight against Attorney General Bob Cooper's claims of gasoline price gouging in the wake of Hurricane Ike, though the store still admits no wrongdoing.
Last April, the state announced it had reached a settlement with 27 gas stations to resolve allegations of price gouging.
Chairman Bill Weigel said then that the state was mischaracterizing the sale of 9,000 gallons of gas--purchased at a higher wholesale price, then sold at a higher retail price--as gouging. A release said Weigel's lost about a million gallons of fuel sales to the hurricane, along with significant profits.
A release from the state on Thursday indicated that Weigel's had entered the agreement to avoid the expense of litigation and that the retailer still denies any wrongdoing.
The settlement agreement of $57,000 is now pending before a Knox County Chancellor.
Consumers have until June 28 to request a refund from the state through the online gouging complaint form at http://www.tn.gov/consumer/PriceGougeCmplnt.shtml. Consumers will have to demonstrate a gas purchase at an affected store from September 12-18, 2008.
If approved, the settlement will be the largest gas pricing enforcement action against a single retailer in the state's history.
Weigel's released a statement Thursday afternoon, re-affirming that the company felt it acted appropriately to try to get gas to its customers and that it is settling the litigation to get with its business.
Weigel's Resolves State AG's Claim
Weigel Stores, Inc. announced today the settlement of the claim asserted against the Company by the State Attorney General related to retail gas prices following the shutdown of Gulf Coast refineries damaged by Hurricane Ike in September, 2008.
As announced in April of last year, the Attorney General commenced this litigation against Weigel's after Weigel's refused to participate in a settlement involving 16 other gasoline retailers. Although it continues to believe that its actions during that period were taken properly in an effort to insure that most of its customers could continue to find gasoline at its stores, Weigel's has now determined that neither the Company nor its customers are well served by continuing this expensive, time-consuming and distracting litigation.
As expressly set forth in the terms of the recent settlement order, there has been no finding or admission of wrongdoing on Weigel's part. Weigel's continues to deny all charges of wrongdoing, including that Weigel's at any time over-charged its customers for gasoline following the disruption and shortages occasioned by Hurricane Ike. Pursuant to the settlement, Weigel's will make a payment to the State which is well below Weigel's costs of continuing to litigate the matter, and the settlement order specifically provides that Weigel's has agreed to the settlement only to avoid the expense of continued litigation. The settlement places no special conditions upon Weigel's conduct of future business, and preserves all of Weigel's defenses should claims occur.
"We continue to maintain that we operated our business appropriately in the difficult circumstances and market disruptions caused by Hurricane Ike. On some days the Company was paying more to buy gas than it was selling it for at the pumps," said Bill Weigel, Chairman of Weigel Stores, Inc. Weigel added that, "the terms of the settlement proposed to us last year implied that Weigel's admitted to violating the law. The settlement reached now does not carry that implication, and is on such terms, economic and otherwise, that from a business standpoint it is in the best interests of the Company and our customers that we put the matter behind us."
"Weigel's has been a proud part of the Knoxville community for more than 75 years. We are pleased to reach a resolution that preserves the integrity and solid reputation of our Company and look forward to continuing to serve and grow with this community," Weigel said.