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Court upholds $5.6 million judgment in lawsuit over fuel pricing

Jessica Shumaker//February 26, 2021

Court upholds $5.6 million judgment in lawsuit over fuel pricing

Jessica Shumaker//February 26, 2021

For the first time, a Missouri appeals court has ruled in a case involving a 1993 state law designed to protect competition in the retail motor fuel market, affirming a $5.6 million judgment against a St. Louis gas station. 

On Feb. 23, a three-judge panel of the Missouri Court of Appeals Eastern District unanimously upheld a judgment in favor of Christopher Westmoreland against Midwest St. Louis LLC, a company doing business as Gas Mart 6.

As part of the ruling, the Eastern District for the first time fleshed out who has the standing to sue in cases brought under the Missouri Motor Fuel Marketing Act, also known as the MFMA. 

The law makes it unlawful to sell gas below market cost with the intent to damage competition, or to divert sales or trade from or otherwise injure a competitor, according to the opinion, written by Judge James M. Dowd. 

The MFMA provides a private cause of action for those injured from violations of the act, but lawsuits under the law are rarely brought because it is difficult for plaintiffs to prove both that defendants sold fuel for a sustained period below cost and that the defendants’ actions damaged them.   

Westmoreland is the former owner of the gas station Go West Mart off Interstate 70 in north St. Louis. In 2015, he filed suit against Midwest in St. Louis Circuit Court, alleging Gas Mart 6 regularly sold fuel below cost in 2012 in order to undercut competitors. He alleged he was driven out of business as a result of the price war involving Midwest and other nearby gas stations. 

At trial in 2018, a jury awarded Westmoreland $1.8 million against Midwest. Judge Elizabeth Hogan later tripled that amount, as required by the statute, and awarded Westmoreland $200,000 in attorneys’ fees. The resulting judgment was the second-largest of 2019, as tracked by Missouri Lawyers Media.

Midwest appealed, asserting that Westmoreland failed to make a submissible claim because he was not Midwest’s competitor in lowering prices and did not suffer direct injuries from Midwest’s alleged conduct. 

While Midwest couched its argument as one based on submissibility, the company was really arguing that Westmoreland lacked standing because only his two corporations are parties in interest that can sue — not Westmoreland as an individual and shareholder, Dowd said in his opinion

The court disagreed, finding Westmoreland had standing to sue. 

Standing in the case is not limited to competitors, Dowd said. Westmoreland satisfied the standing requirement because he proved he is a “person . . . injured in his business or property in the relevant geographic market,” as required by the law, the judge said.  

“Westmoreland proved his standing because he proved his injury was ‘inextricably intertwined’ with the injury Midwest sought to inflict on the motor fuel market in that relevant geographic area,” he said.

“Likewise, we reject Midwest’s assertion that Westmoreland failed to make a submissible case because we find there was substantial evidence proving each element of the [MFMA’s] private cause of action.”

Judges Angela T. Quigless and Kurt S. Odenwald agreed. 

The court also denied Midwest’s argument that the verdict was excessive and unsupported by the verdict, and it affirmed the award of attorneys’ fees. The panel granted Westmoreland an additional $61,800 in attorneys’ fees in connection with the appeal. 

Adina Johnson of Roberts Perryman in St. Louis represented Westmoreland on appeal. She said the court’s analysis was thorough and will provide plenty of guidance for both plaintiffs and defendants involved in MFMA suits in the future. 

“We were obviously very impressed and gratified by how the court did such a detailed analysis of the statute and the whole legal basis behind the purpose of the statute,” she said. 

Johnson said the court also was detailed in laying out her client’s evidence at trial, which she said is “a great credit” to Westmoreland’s trial attorney, Jeremy Gogel. 

“Here’s something new and fresh out of the gate, and he managed to get all the correct evidence in,” she said. “When you work on a case [on appeal], it’s a dream when you have someone who has tried the case so well.” 

Tom Weaver of Armstrong Teasdale in St. Louis represented Midwest. He declined to comment on the ruling. 

The case is Westmoreland v. Midwest St. Louis, ED107787. 

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