ExxonMobil Saved From Class Action by Texas Supreme Court

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ExxonMobil Saved From Class Action by Texas Supreme Court

AUSTIN, Texas -- Gasoline dealers who claim ExxonMobil tricked them into paying for their own rebates can't pursue a class action lawsuit, the Supreme Court of Texas ruled, according to a report by The Southeast Texas Record.

"The dealers here point to nothing in the contracts that prohibited Exxon from taking rebate costs into account in setting prices," the justices wrote in an unsigned opinion in which they reversed 13th District appeals judges in Corpus Christi, Texas, who affirmed a class certification order from Nueces County Court of Law Judge James Klager.

In their suit, ExxonMobil dealers Dan Gill, Howard Granby and Patrick Morrow claimed that the oil company promised economic benefits but secretly recouped them by factoring them into prices. The dealers alleged breach of agreement, breach of promise and breach of good faith, the newspaper reported.

ExxonMobil denied that it fully recouped its costs or hid facts from dealers. The oil company pleaded that the dealers alleged fraud, not breach of contract. The distinction matters because a fraud plaintiff must prove he relied on a defendant's misconduct, while a breach plaintiff doesn't have to prove reliance, the report noted.

In making their decision, the justices asked if ExxonMobil violated commercial code by failing to disclose that it recouped rebate costs, and they wrote: "The answer is no."

"Thus, it appears that the dealers' claim lacks merit," their opinion stated.

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