nu Ts and bolTs
of this year, that deal was finally approved by the federal court
managing the litigation. Under the terms of the settlement,
Costco has five years to make the switch.
As the Costco litigation was proceeding, hot fuel lawsuits in
28 states naming seven major oil companies (BP, ConocoPhil-
wIll thIs settleMent answer all the
qUestIons sUrroUndInG atc? hardly. Many
states cUrrently prohIbIt teMperatUre-coMpensated fUel dIspensers.
lips, CITGO, ExxonMobil, Shell, Sinclair, Valero) and three
retail chains (Casey’s General Store, Sam’s Club/Walmart and
Dansk/USA Petroleum) were consolidated as a single class action lawsuit—overseen by the same federal judge that managed
the Costco litigation.
A series of settlement agreements reached this spring with
all defendants in the class action suit will—if approved by the
judge—certainly increase the use of ATC equipment in the
For starters, all of the major oil companies except Valero
agreed to contribute to a $21.6 million general fund. Two-thirds of the fund will be used to help these companies’
retailers convert to ATC equipment and provide disclosures
to the public about hot fuel at the pump. The remaining
one-third will be set aside to help state weights and measures
officials regulate the new temperature-compensated
equipment. The settlement agreement also provides that the
plaintiffs’ lawyers may petition the court for attorney’s fees and
legal expenses. Any such awards will come out of the $21.6
million fund, but are capped at 30 percent.
While not participating in the general fund, Valero agreed
to contribute $200,000 to the public education campaign and
$4.5 million for attorney’s fees. The company will also post the
temperature of its fuel at Valero stations in the affected states.
The temperature posting is a stop-gap measure until ATC
becomes an “industry standard in the affected region,” at which
point Valero would also convert its dispensers.
Finally, Casey’s, Sam’s/Walmart and Dansk/USA Petroleum
8 2 | pei.org | Third Quarter 2012
agreed to install ATC dispensers at new locations they open
in the relevant states, to convert to temperature-compensated
dispensers at existing sites and to contribute varying sums for
attorney’s fees and the costs of litigation ($58,000 from Dansk/
USA Petroleum, $700,000 from Casey’s and $3 million from
Sam’s/Walmart). Various conditions may impact the scope
and pace of the retailers’ planned equipment migration.
For example, Casey’s agreement stipulates that it will not
have to convert its equipment if it begins to purchase non-temperature-compensated fuel.
Will this settlement answer all the questions surrounding
ATC? Hardly. Many states currently prohibit temperature-compensated fuel dispensers. Weights and measures officials
in those states obviously will be called upon to reconsider
their policies. Another question involves the accuracy of the
new pumps. All jurisdictions allow a small fudge factor when
measuring that sacred 231 cubic inches. Most allow as much
as plus or minus 5 cubic inches—which means a total swing of
10 cubic inches! In a temperature-compensated world where a
30°F shift in temperature means a 2-cubic-inch change, one has
to wonder by what standard the accuracy of the new dispensers
will be measured. That, too, will be a matter for the weights and
color of dIesel
An effort to color-code and standardize the diameter of
nozzles on America’s diesel dispensers also continues to generate
controversy. The proposal originated from the Missouri Department of Agriculture in 2011 as an effort to minimize misfueling
at retail fueling facilities. Regulators proposed a standardized
identifying color for all diesel dispensers. A minimum nozzle
outside diameter of 15/16" (0.9375 inches) also was recommended to further persuade motorists not to inadvertently
become “oil burners.” A standard unleaded gasoline nozzle is
13/16" (0.8125 inches).
Industry groups, including NACS, PMAA and API
(American Petroleum Institute), have opposed the measure,
suggesting that the variety of motor fuels makes color coding
too complicated for motorists—and that a “rainbow of
dispenser colors” would only confuse consumers and burden