Latham & Watkins Advises on Award-Winning Consumer Class Action Litigation

The Daily Journal

February 03, 2010

Latham & Watkins advised on a complex class action case involving retail gasoline sales in the US, which was named a “Top Defense Verdict of 2009” in California by The Daily Journal on February 3. The firm defended Chevron USA in the “hot fuels” case (Klein v. Chevron USA Inc.), which involved claims that gasoline prices must be adjusted to account for expansion that occurs when gas temperatures rise. Plaintiffs lawyers argued that since motor fuel sold at wholesale is adjusted to a reference temperature of 60 degrees Fahrenheit, the same standard should apply to retail transactions so customers receive the same amount of energy per unit of sale, regardless of temperature. In March 2009, the California Energy Commission, in a parallel regulatory proceeding, accepted analysis and data presented by the defense and found that a system based on temperature-adjusted fuel would require the expenditure of vast public and private resources and, in the final analysis, would not be cost-effective to consumers. The class action case was dismissed within four months of the CEC's final report after the Latham attorneys argued successfully that the challenged practices were not unlawful and that the matter involved complex economic, regulatory and tax policies. San Francisco partners Darius Ogloza and Ernie Getto led the case team that included associates Brendan McShane, Connie Sardo, and Heather Thompson. As quoted in the article, Darius said the defense strategy “really exposed the deep complexity and the reason why you need regulators as opposed to judges making these decisions.”

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