California gasoline firms settle price manipulation claims for nearly $14 million

SAN FRANCISCO (CN) — A federal judge gave final approval Wednesday to a $13.9 million settlement to compensate businesses and non-California customers who were cheated in a scheme by gasoline firms to jack up prices at the pump after a 2015 explosion at an oil refinery in Southern California.

The refinery explosion caused significant disruption in the gasoline market in California. The refinery in question was responsible for roughly 10% of the state’s gasoline supply, which decreased dramatically, driving up prices at the pump.

SK Energy Americas and Vitol, the two gas firms, were accused of using traders who were friends with each other to collude in driving up the price of gasoline by making certain transactions appear materially different to confuse others about the true nature of supply and demand in the market at a given time.

Some estimates indicate the scheme could have cost state residents as much as $150 million in 2015 alone, with the scheme likely persisting into late 2016.

At Wednesday’s hearing, U.S. District Judge Jacqueline Scott Corley, a Joe Biden appointee, said she was glad the deal was finally done after five years of litigation. Former California Attorney General Xavier Becerra first sued SK Energy Americas and Vitol in 2020.

Corley preliminarily approved the settlement in August.

“Congratulations — I know I saw that you got the approval of the state court, the government action as well, so you brought it to an end,” Corley told the table of lawyers representing the class plaintiffs, referring to the $50 million settlement resolving the claims of California consumers announced in June 2024 by California Attorney General Rob Bonta.

Dena Sharp, counsel representing the class plaintiffs in the civil action, said she hoped that the final numbers for the distribution could be filed with the court by June, meaning that distribution of checks to the class would happen in the middle of July.

Counsel for SK Energies America and Vitol did not comment at the hearing and stayed seated at their tables except to announce their appearances on the record.

When she preliminarily approved the settlement in August, Corley noted that the plaintiffs faced major hurdles in getting their class certified, including the risk that most claims would be precluded. Even if not blocked, they would still need to win class certification, defend it through potential appeals, succeed at trial despite various defenses and win any post-trial appeals, making a settlement the most equitable option.

The settlement class is composed of people who at the time of purchase were not residents of the state of California, and business located anywhere, that bought gasoline from a retailer for their own use and not for resale in California between Feb. 18, 2015, and May 31, 2017.

Funds will be distributed in pro rata shares among the two pools. Eighty-five percent of the fund will go to businesses that overpaid for gas, and the remaining 15% will be allocated to non-California residents. Purchases in Southern California will be compensated at twice the rate compared to those in Northern California.

Attorneys representing the class plaintiffs will receive fees equal to 30% of the fund, up to about $2 million, plus 30% of the interest. The class counsel will also be awarded $6.5 million in litigation expenses, and each settlement class representative will receive $5,000 each.