Updated at 4:50 p.m. on 6/22/15 with a quote from Joe Choquette.
For years, public officials have raised questions about high gas prices in northwestern Vermont. Sen. Bernie Sanders (I-Vt.), state Attorney General Bill Sorrell and plenty of others have organized hearings, held press conferences and even requested a federal investigation into the matter. Nothing much has come of their efforts.
On Monday, the law firms Bailey & Glasser and The Burlington Law Practice filed a class action lawsuit alleging that four local companies — R.L. Vallee, owned by Skip Vallee, which runs the Maplefields chain; S.B. Collins; Champlain Farms/Wesco; and Champlain Oil Company — have made exorbitant profits by illegally conspiring to keep gas prices high.
In a complaint filed Monday afternoon in Chittenden Superior Court, the plaintiffs describe the defendants’ wholesale and retail profits as “extraordinarily out of line.” At times, according to the filing, those profits have been twice the national average and the second highest of 450 gas markets in the United States.
The suit, which alleges a violation of the Vermont Consumer Protection Act, is being brought on behalf of people who purchased gas at stations owned or supplied by those four companies in Chittenden, Franklin and Grand Isle counties from 2005 until the present day. The plaintiffs claim that the defendants control more than 60 percent of suppliers and retail stations in those counties, and they suggest that the companies “may have pilfered over $100 million” from customers during this time period.
The filing alleges that the four companies’ gas prices “have increased, decreased or held steady in nearly identical fashion” and that they’ve gone up even when prices were declining.
The defendants are also accused of suppressing competition by buying gas stations, shutting them down and reselling the properties with deed restrictions that prevent them from selling fuel. Referring to efforts led by Vallee to quash new gas stations at Walmart in St. Albans and Costco in Colchester, the complaint states, “The defendants have cynically misused, sometimes in concert, Vermont environmental laws to obstruct the entry of low-cost gasoline providers and to extract unreasonable covenants that prevent or limit competition.”
The lawsuit alleges that the companies’ officials have consistently lied while testifying in front of public officials. “At each of the hearings the defendants’ answers cycled between pretextual, nonresponsive, incomplete and false. A representative of defendant R.L. Vallee, Inc. seemingly attributed the higher prices, in part, to their use of fresh flowers in their bathrooms—a contention mocked by a Vermont state representative at a subsequent hearing.”
The suit alleges that the four companies have temporarily lowered prices ahead of such hearings “to deceive lawmakers and citizens, and to evade detection of their broader price-fixing scheme.”
The suit was brought by Bailey & Glasser lawyers from Washington, D.C., Boston and Chicago, and Joshua Simonds of the Burlington Law Practice.
Reached by email, Vallee, who had not been aware of the lawsuit, told Seven Days he had no comment on the “alleged litigation.” Presidents at the other three companies could not immediately be reached.
Joe Choquette, a lobbyist for the Vermont Petroleum Association, said he couldn’t speak on behalf of an individual company, but in an emailed statement, he suggested that the lawsuit was unfounded.
“There is no new information in the materials that have been filed by the two law firms,” he wrote. “With the same information, both the Federal Trade Commission and the Vermont Attorney General’s Office have declined to take any action in the past. We believe that motor fuel marketing in Vermont is highly competitive, and we have appeared many times before legislative bodies and in the media to explain the marketing and pricing of gasoline. This is a transparent industry that posts its prices on 12-foot signs at the street level for all to see.”
Clarification: This story was updated at 5:30 p.m. on 6/22/2015 to make it clear that it’s the plaintiffs who claim that the defendants control more than 60 percent of the local gas market.
Got something to say?
Send a letter to the editor and we'll publish your feedback in print!
They’re doing it again. They used a short stoppage in production from Hurricane Harvey to jack prices WAY up and the price has not dropped since. WHY ARE THEY NOT BEING STOPPED AGAIN !!! Once again I have to limit my driving because I cannot afford these prices. Damn! Somebody do something!
This is not a political matter although it’s easy to say that.
It’s simple…the wholesaler is also the retailer. That means they control the price from both ends. That’s how they can price fix. Any independent stations gets gas from the wholesaler who also owns retail locations. He can not supply anyone who undercuts his prices.
This is called a monopoly and why when two major player try to join it must be approved as it eliminates competition.
Take all the politics out of it and look at it as straight business. There’s a reason why wholesalers should not be allowed to be retailers too. They have a huge advantage of an independent retailer.
Part of the problem concerns vertical integration. The same companies control both wholesale and retail, so they can fix prices, both within their own stations, and in the stations they do not own but supply. Vertical integration is not permitted in other states, NH for example. We are being ripped off and it is not as easy as saying just shop somewhere else – how far would you have to go? A new law is required to keep the market fair. Profits OK, profiteering not OK.
“The defendants have cynically misused, sometimes in concert, Vermont environmental laws to obstruct the entry of low-cost gasoline providers and to extract unreasonable covenants that prevent or limit competition.”
Government red tape is preventing the free market from fixing the problem on its own. How does someone “misuse” a law that applies to someone else anyway? If that’s possible, then these are bad laws. The solution isn’t more of them.
To think that these three stalwart Republicans are not meeting for drinks and golf at the country club and talking about their business, and specifically pricing, is a fantasy. Of course they do. You are not going to find a smoking-gun paper trail, they are too smart for that. But you see the results in the pricing.
As to the “deed restrictions,” I would note that they are likely voidable as being against public policy. It has the flavor of selling a house and putting a restriction in there that no black, or gay person, or single mother, can ever live there. To say that a gasoline station can never be used to sell gasoline is a classic abuse of the concept of deed restrictions. My guess is that nobody dares buy the place and then take it to Court as they would not have the deep pockets needed to slug it out with the cartels’ aggressive lawyers. This is “legal abuse” of the rankest sort.
I only wish that Lamoille County had been included in this action as we are victim of the same bandits as the counties mentioned. Just today I bought some gas in Lamoille County for $2.84/gal and drove into Chittenden County where I filled the tank on my motor home at $2.62/gal at the Essex GO-GO. The Highwaymen Cabal operates all over north central Vermont as well and we should all be parties to this lawsuit. How about some recognition for us Bill Sorrell?
This makes for great campaign fodder for Bernie and an attempt by our AG to go out on a high note while discrediting families who work hard every day at their place of business. Truth be told, there are consumers who like the experience of shopping at these fine stores. They are full service operations that help us gain access to quality products, with quality service so we can be on our way. I’m ok with paying a little more for that level of service, even if its at the pump. Many of us pay more for great food and great service at restaurants, resorts, sports venues, health & fitness facilities etc. If everyone wants to dream up visions of 3 of the most successful Vermont based business owners who employ hundreds of Vermonters all sitting around a poker table in a smoke filled room cutting deals like mafia bosses are loony. Have fun with that investigation while wasting more tax dollars and turning everyone’s attention away from the bigger picture- our state’s abysmal democratic leadership.