Jury Rejects BP Franchisees' Unfair Pricing Claims

LOS ANGELES — A California jury ruled in favor of BP West Coast Products LLC in a legal challenge centered on allegations of unfair pricing policies.

On Aug. 14, the jury rejected claims by four BP gas station franchisees that the oil company charged unfairly high prices for wholesale gasoline.

Opening arguments in the trial began July 10. The four plaintiffs in the case — current and former owners of Atlantic-Richfield Co. (ARCO) branded stations — had alleged that when BP owned the brand, it breached the implied covenant in their franchise agreements by requiring them to purchase ARCO-brand gasoline at prices that were not competitive with their market, according to Law360.com. 

More than 550 individual ARCO station owners have since joined in the mass action, according to plaintiffs' attorney Brian Brosnahan at Kasowitz Benson Torres & Friedman LLP.

BP sold the ARCO brand, among other assets, for $2.5 billion to Tesoro Corp. in 2013.

The jury returned a verdict finding that BP did not charge wholesale prices for ARCO-branded gasoline that were commercially unreasonable and did not set the prices in bad faith, denying the plaintiffs' claims for breach of implied covenant as to the pricing. 

However, the jury did find that a point-of-sale software system BP required the franchisees to use was not "fit for its ordinary purpose," and awarded the four plaintiffs a total of $99,490 for their breach of implied warranty claims relating to the system. This is only a small fraction of the $1.65 million they sought, according to Law360.com.