Exxon Mobil to Take $550 Million Charge Against Earnings in Court Case
Exxon Mobil Corp. said Friday it would take a $550 million charge against earnings to cover potential costs in a class-action lawsuit brought by gas station dealers.
The dealers said they were overcharged for gasoline for several years. The class-action lawsuit could affect 10,000 current and former dealers, lawyers say.
In 2001, the dealers won a $500 million verdict in federal court in Florida. Exxon Mobil, the world's largest publicly traded oil company, appealed.
On Tuesday, the U.S. Supreme Court agreed to hear part of the company's appeal, but lawyers for the dealers said the court ruling allowed most of the verdict stand.
Late Friday, the company said in a statement that it would take the $550 million after-tax charge in its third-quarter financial results.
The company said that while it was taking a charge against earnings, depending on the final ruling from the Supreme Court, it might go back to the Florida court to seek "further relief" from the verdict.
Exxon Mobil said it acted in good faith and met its obligations to dealers and customers.
The case goes back to 1982, when Exxon _ before it bought Mobil Oil _ charged dealers a 3 percent processing fee on gasoline purchases made with credit cards. The company promised to offset the fee by reducing wholesale fuel prices but stopped after six months without telling the dealers.
The dealers sued in 1991. The $500 million verdict was upheld by a federal appeals court. Exxon Mobil then took the case to the Supreme Court.
In trading before the company disclosed the charge, Exxon Mobil shares closed up 31 cents at $49.02 on the New York Stock Exchange. The stock has traded in a range between $35.05 and $50.46 during the past 52-weeks.