Sunoco gas ads in dispute
Philadelphia Business Journal - by Todd Bishop Staff Writer
Sunoco Inc. has found itself mired in a protracted legal battle over allegedly misleading ads promoting its premium gasoline.
The Pennsylvania Superior Court, providing the latest twist in the dispute, last month reversed a Common Pleas Court ruling that denied class certification in a lawsuit challenging claims made by the Philadelphia company about its high-octane gas.
Sunoco, one of the nation's largest petroleum refiners and marketers, has now petitioned the full Superior Court to reconsider its decision, which was handed down Sept. 10 by a divided three-judge panel.
But unless the company is successful in that effort, the case is expected to return to the lower court, in Philadelphia, where a judge would consider certifying the proposed class of plaintiffs.
Depending on the parameters established, that class could potentially include every non-business consumer who bought premium Sunoco gasoline between 1990 and 1992, when the disputed television and radio ads aired in more than a dozen states as part of a $14 million marketing campaign.
Although the Superior Court did not directly order the lower court to certify a class, the majority opinion found that there existed most of the conditions necessary for such a move.
At issue are elements of the advertising campaign that claimed Sunoco's premium gasoline, known as Ultra93.5 and Ultra94, would substantially improve a car's performance.
"No other gasoline can give your car better acceleration because no other gasoline has 94 octane," said one advertisement, according to court documents. "Come to Sunoco and fill up with Ultra94 -- for maximum power and performance."
The suit alleges that claims such as those deceived drivers. Although a sufficient level of octane has been determined to reduce an engine's tendency to knock, the Federal Trade Commission has found in previous proceedings -- also involving Sunoco ads -- that using gasoline of a higher octane than needed to control knocking provides no additional improvement in engine performance.
Sunoco, formerly Sun Co. Inc., has conceded as much during past cases brought by the FTC, according to the Superior Court opinion. But the company contends that the ads were not deceptive, said Jon A. Baughman, a lawyer with Philadelphia's Pepper Hamilton law firm who represents Sunoco.
"We certainly do contend that the ads were not deceptive. That certainly was our position before the FTC, and we think we've thoroughly substantiated that," Baughman said. "Should we need to litigate the merits in the Court of Common Pleas, we certainly intend to do so."
The first of the FTC cases took place in 1974 and involved ads that aired between 1969 and 1972. In that matter, the commission found, in part, that Sunoco "engaged in unfair methods of competition in commerce" and "committed unfair and deceptive acts and practices."
The company agreed at the time to refrain from "misrepresenting, in any manner, the performance characteristics of Sunoco gasoline," according to the Superior Court opinion.
The FTC raised the issue again in the early 1990s, after Sunoco began airing the ads that are the subject of the ongoing litigation. The commission issued a settlement order in 1992 that enjoined Sunoco from making such claims unless it had a scientific basis to support them.
Baughman noted that the FTC imposed no penalty in the previous cases. He also said the consent decree to which the company agreed simply stated the relevant law and told the company not to violate it.
Plaintiffs in the ongoing litigation include Sheilah F. Guarino of Cherry Hill, who has been involved in two similar claims against Sunoco in New Jersey. The first, in federal court, was dismissed after a judge ruled that the specific act under which the claim was brought did not give consumers standing to challenge allegedly misleading advertising.
The second, in New Jersey Superior Court, certified a class of plaintiffs but limited the class to consumers of that state. Guarino and others subsequently filed suit in Philadelphia Common Pleas Court in 1996, proposing a national class.
Guarino said this week that it was simply "out of frustration" that she began fighting the company over the issue. She declined to comment on the Superior Court ruling. Her lawyer in the case, Ann D. White, did not respond to a request for comment.
Consumers including Frederic Weinberg of Dresher have joined Guarino as plaintiffs in the Philadelphia case. The suit alleges that all but a small percentage of drivers experienced no added benefit as a result of choosing the high-octane gas.
The suit also claims that the advertising wrongly increased consumer demand for Sunoco's Ultra gasoline and inflated its price. The suit seeks compensatory and punitive damages in addition to "corrective consumer disclosures," measures meant to counteract the impression allegedly created by the ads.
Latest News |
