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News Brief: Gas Company Lawsuits Put on Hold

Feb. 23, 2005 – District Court Judge Curtis Gomez said Tuesday he would not rule until March 21 on lawsuits filed against the V.I. Department of Licensing and Consumer Affairs by two gasoline companies.
The lawsuits – filed by Texaco Caribbean Inc. and Esso Virgin Islands Inc. – charge that the demands of the department's Gross Profit Margin Order are unfair and illegal.
The Gross Profit Margin Order places a profit cap of 30 cents per gallon of gasoline for wholesalers and 35 cents on retailers. Wholesalers, importers and retailers are all required to file periodic reports of how much they paid for gasoline during designated time periods and how much they sold it for. (See "Fines Accumulating for Non-Compliance on Gas Cap Reports").
At the three-hour hearing Tuesday, Curtis heard arguments from both sides. The gasoline companies through their attorneys – Alan Teague for Esso and Chad Messier for Texaco – argued that DLCA was shifting the cost of its yet-to-be-implemented flexible petroleum tax from consumers to the wholesale companies. The tax is expected to add up to 11 cents per gallon of fuel.
Assistant Attorney General Carol Thomas-Jacobs, along with Civil Chief Kerry Drue and Assistant Attorney General Richard Schrader Jr., argued on behalf of the department that the V.I. price control statute gives Rutnik the authority to issue orders setting the gross profit margins for wholesalers.
Rutnik, who was at the hearing, said Wednesday the Gross Profit Margins Order will remain in effect. Rutnik said Esso has been complying with the order, despite the lawsuit it filed. However, Texaco has been in violation since the order took effect.
"We've fined them everyday at the cost of $200 a day and will continue to do so until they comply with the order or a court rules different," Rutnik said.
Teague and Messier could not be reached for comment Wednesday.

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