By Tony McVeigh
http://stream.publicbroadcasting.net/production/mp3/wkms/local-wkms-970618.mp3
Frankfort, KY – A judicial ruling Wednesday in Kentucky's longstanding price gouging case against Marathon Petroleum doesn't end the lawsuit.
In May 2007, then-Attorney General Greg Stumbo announced what he called 'groundbreaking litigation," accusing Marathon Oil, Marathon Petroleum and Speedway SuperAmerica of profiteering in the wake of Hurricanes Katrina and Rita.
Stumbo said the companies overcharged Kentucky consumers more than $89 million for gasoline.
"The worst thing about the massive overcharging for gasoline is that it happened during a grave national emergency," said Stumbo. "Our nation was rocked by Hurricanes Katrina and Rita. It was a time for Americans to pull together. But the lure of easy money always brings out those who would seek to profit from the misery of others."
The lawsuit, the first of its kind in the nation, was made possible by legislative approval of an anti-price gouging law in 2004. In August 2005, after hurricane-strength winds blasted Kentucky, then-Gov. Ernie Fletcher declared a state of emergency.
That triggered the price-gouging statute on which Stumbo based his lawsuit. Marathon denied any wrongdoing, and asked a federal court to rule Kentucky's price-gouging law unconstitutional. Angelia Graves spoke for the company.
"The attorney general has mentioned himself, a couple different times, that the law is vague and that there are problems with it," said Graves. "So, we thought this is the opportunity to challenge the law itself."
But after a federal judge dismissed Marathon's lawsuit, the original case was returned to Franklin Circuit Court, where it remains.
Two weeks ago, Attorney General Jack Conway used it to again accuse Marathon of price gouging during a state of emergency - this time during last month's flooding in western Kentucky.
Conway said Marathon illegally jacked up gas prices after Gov. Steve Beshear declared a state of emergency on April 26th. The company denied it and a hearing was held on Conway's motion for injunctive relief.
Conway wanted Judge Thomas Wingate to force Marathon to return wholesale gas prices to pre-emergency levels, but Wingate refused. Good call, says Marathon spokesman Shane Pochard.
"Our wholesale gasoline price in Kentucky, both before and after the governor's suit, were consistent with those in neighboring states and with broader market conditions," said Pochard. "We believe our prices complied fully with Kentucky's emergency pricing law."
The ruling was a disappointment to Attorney General Conway.
"Obviously, the judge seemed to be persuaded by the fact that Marathon can't refine all the gas it needs, and needs to buy some on occasion on the spot market," said Conway. "Therefore, they were able to demonstrate an increase in cost. And showing an increase in cost, he felt, gapped him out of a certain prong of the statute with regard to the definition of gouging. I don't buy that."
And while Marathon may have won this round, Shane Pochard knows the legal fight is far from over.
"We appreciate Judge Wingate's careful analysis of the issues," said Pochard. "Of course, the decision does not end the attorney general's lawsuit against us."
Indeed it doesn't says, Conway. He won't appeal the judge's order, but will continue to pursue the lawsuit.
"I do think that Marathon has engaged in price gouging," said Conway. "We're going to continue to pursue the underlying case. And I would just note, the judge in his order actually said that we're to be commended for bringing the case in the first place."
Conway says one of his top priorities in the days and weeks to come, is to bring the lawsuit to trial.