Court Upholds Award Against Exxon

Exxon Mobil Corp., the world’s largest publicly traded oil company, will have to pay as much as $1.3 billion in damages after losing a U.S. Supreme Court fight Thursday involving gas station owners who didn’t receive promised fuel discounts.

The court said the claims of 11,000 station owners were properly included in a single class-action lawsuit in Miami, rejecting Exxon’s bid for a new trial. The 5-4 ruling will have limited application beyond the Exxon dispute because a federal law enacted in February will govern future class actions.

The award will be the largest Exxon has ever paid as a result of a jury verdict. Exxon, based in Irving, Texas, took an after-tax charge of $550 million last year to cover part of the damages in the case.

The company’s shares Thursday slipped 65 cents to $59.02.

Exxon is disappointed by the ruling, a company spokeswoman said in an e-mailed statement.

“We continue to believe that Exxon Mobil operated its discount for cash program in good faith and met its obligations in the best interest of our dealers and customers,” Prem Nair said in the statement. “This case has never been clear-cut.”

Exxon had argued that the case shouldn’t have included station owners who were seeking less than $50,000, which at the time was the threshold for certain types of stand-alone federal suits.

Justice Anthony M. Kennedy, writing for the court, said the trial judge properly exercised “supplemental jurisdiction” over those claims because they were attached to larger claims.

Chief Justice William H. Rehnquist and Justices Antonin Scalia, David H. Souter and Clarence Thomas joined Kennedy in the majority.

Justices John Paul Stevens, Stephen G. Breyer, Ruth Bader Ginsburg and Sandra Day O’Connor dissented.

The dispute centered on Exxon’s August 1982 “discount-for-cash” program, which promised station owners a price reduction to offset a new fee on credit card sales.

The station owners said Exxon eliminated the price cut about seven months later while telling dealer representatives for years that it was still providing the discount.

Lawyers filed the suit in 1991 on behalf of 10,000 station owners in 34 states and Washington, D.C. The jury in 2001 awarded them an average 1.3 cents per gallon for the 40 billion gallons of gas sold.

With interest, that totals about $1.3 billion, said both Exxon and the lead lawyer for the stations, Eugene Stearns.