Federal Lawsuit Charges Buc-ee’s With Setting Unfair Pump Prices

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Federal Lawsuit Charges Buc-ee’s With Setting Unfair Pump Prices

02/06/2019
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MOBILE, Ala. — A lawsuit claims that Buc-ee's illegally priced gasoline when it opened its first Alabama travel center last month along Interstate 10 in Baldwin County.

The lawsuit, filed in federal court by Oasis Travel Center LLC, alleges that the Lake Jackson, Texas-based company violated the 35-year-old Alabama Motor Fuel Marketing Act, and demands that the company halt its pricing strategies while the case is pending, reported AL.com.

The law, passed in 1984, prohibits big oil companies from selling gasoline to the public for less than it costs to buy and transport it to a retail outlet. Over the years, similar lawsuits have been filed in Alabama against big-box retailers like Murphy Oil Corp., which operates Walmart gas stations, and Costco.

"We contend Buc-ee's, when it opened up two weeks ago, it opened at prices for regular unleaded and other grades at below costs as defined under the Alabama law," said H. Dean Mooty, a Montgomery-based attorney who has represented smaller-sized convenience stores in similar cases.

According to AL.com, the lawsuit specifically cites several dates when Buc-ee's posted a price of regular gasoline under what state law allows. Among the dates cited is Buc-ee's Jan. 21 opener, when regular gasoline was sold at a rounded price of $1.80 per gallon.

The price hadn't risen above $1.87, as of Thursday, Jan. 31. The lawsuit was filed Friday in the U.S. District Court for the Southern District of Alabama, based in Mobile. In the city of Mobile, regular gasoline prices averaged around $2 per gallon last week and $1.91 last month, according to AAA.

Buc-ee's operates 34 locations, 33 of which are in Texas. The Alabama location is the first for the convenience retailer outside of the Lone Star State.

Alabama is one of a few states with a law that limits how low a retailer can drop its pump prices. Texas does not have such a law, Mooty noted.

"We do know that Buc-ee's was fully aware of the law when they opened up and frankly, we are disappointed they opened up and priced the way they did," he said. "We hope the filing of the lawsuit will get them to comply with the law."

Jeff Nadalo, an attorney with Buc-ee's, said the company was aware of the Alabama law.

"Buc-ee's has always provided our customers with the best experience on the highway, from the world’s cleanest bathrooms, to great food," a statement from the company reads. "Part of this experience includes high quality fuels, priced fairly and competitively, and we will always strive to be our customers’ choice in the markets where we operate."

Oasis Travel Center, which is located about four miles east of Buc-ee's, is a fixture along I-10 almost halfway between Mobile and Pensacola, Fla. According to Mooty — whose plaintiff happens to be Oasis Travel Center — said fuel prices at Buc-ee's are unfair to gas retailers all around.

The lawsuit could put the 1984 state law back into the public spotlight about 15 years after controversy erupted about whether it hurt consumers by restricting competition at a time of record-high pump prices, according to AL.com.

A bill introduced in the 2004 Legislature to repeal the law failed when the House Commerce Committee shot the effort down.

Proponents of the law have long claimed that it protects small and independent gas station owners from being forced out of the market by big-time competitors that can afford to drastically underprice their fuel.