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Legal Watch: Volume 6

Prepared by William H. Bode
Bode & Grenier, LLP
1150 Connecticut Ave., NW
Washington, D.C. 20036
Telephone: 202-862-4300 | Email: wbode@bode.com

WORKER FAILED TO SHOW THAT OCCUPATIONAL EXPOSURE TO GASOLINE CAUSED LEUKEMIA, NEW YORK APPEALS COURT RULES

Case Summary: Eric Parker was diagnosed with acute myelogenous leukemia (AML) in 1998. He sued Mobil Oil, Island Transportation Corp., and Getty Petroleum alleging that he contacted AML as result of his 17-year occupational exposure to gasoline containing benzene. Parker claimed that while employed with the named oil companies he inhaled gasoline vapors and had dermal contact with gasoline containing benzene on almost a daily basis. Prior to trial, the defendants asked the Court to exclude any testimony from plaintiff's experts that the exposure to benzene caused Parker's leukemia. The defendants argued that the plaintiff's experts - Drs. Philip Landrigan and Bernard Goldstein - could not provide scientifically reliable testimony. Defendants asserted that scientifically reliable testimony on medical causation entailed a three step process: (1) a determination of the level of exposure, or dose of the toxin; (2) a statement of the level of exposure that may cause illness, based on scientific literature; and (3) the exclusion of other possible causes of the illness. Specifically, Mobil and the other defendants argued that the experts failed to state the dosage of benzene to which Parker was exposed. The Court agreed and held that statements from plaintiff Parker's experts that he had "abundant opportunity for exposure to benzene" and similar statements failed to state a dosage level in the parts per million quantification required to form reliable scientific conclusions. With no evidence on medical causation, the suit was dismissed.

LESSON: Terminal operators handling gasoline or other liquids containing toxins should ensure that the workplace is well ventilated. Recent Supreme Court decisions meant to block juries from hearing "junk science" require that experts rigorously adhere to accepted scientific methodology when making opinions about causation. A well ventilated work place (and procedures to avoid excessive dermal contact with possible toxins) can protect against lawsuits by workers claiming damages as a result of occupational exposure to toxins. (Eric Parker v. Mobil Oil Corporation, Island Transportation Company, and Getty Petroleum Marketing, Inc.)

PEPSI-COLA'S PRICE STRUCTURE TO MARKETER DID NOT VIOLATE ANTITRUST LAWS

Case Summary: Krist Oil Company owns and operates 66 gasoline and convenience stores in Michigan, Wisconsin, and Minnesota. Krist Oil was paying Pepsi-Cola $17.25 per case of Pepsi, and selling the 20 ounce bottle for $1.09. In April 2003, to offset declining gasoline margins, Krist Oil increased its selling price to $1.25. Pepsi responded with a letter stating that under its "CDA" program, effective April 1, 2003, wholesale prices would be $19.20 per case if each bottle was retailed at $1.14 or higher, (The Pepsi letter also stated the wholesale price would be $15.60 if the retail price per bottle was $1.00 or lower). Krist Oil sued contending that Pepsi-Cola's pricing structure violated the Robinson-Patman Act and the associated Wisconsin price discrimination law. The Wisconsin federal court dismissed the claims ruling that the federal and state price discrimination laws do not outlaw price discounts, only discrimination among purchasers. The court observed that discounts for high purchase volumes may be illegal because small businesses may not be able to take advantage of a wholesaler's price discounts even when they are theoretically available. But Krist Oil did not take advantage of the discount prices only because it wanted a higher margin on its Pepsi bottle sales, the Court observed. Krist Oil's remaining claim -- that Pepsi violated Wis. Admin. Code Sec. ATCP 131.02 by failing to enter into a written agreement prior to institution of a bottle cap coupon program - remains in the case.

LESSON: Price discrimination law suits are disfavored by the Courts, and extremely difficult to prove. No plaintiff has successfully prosecuted a Robinson-Patman antitrust suit in the last ten years. Any company believing it is the victim of price discrimination must carefully review the facts and law with knowledgeable counsel before initiating a law suit. (Krist Oil Co., Inc. v. Bernick's Pepsi-Cola of Duluth)

TERMINALS/SERVICE STATIONS MUST ADEQUATELY COMMUNICATE WARNINGS

Case Summary: Lee Jackson sued Camden Oil Company for severe burns incurred while filling a portable container with gasoline. Jackson's employer asked him to get some gasoline for a pressure washing machine and provided him with a three-and-a-half gallon portable container normally used for storing fragrances. Jackson drove to a Conoco station operated by Camden Oil and dispensed gasoline from a self-service station into the container while it was on the bed-liner of a pick-up truck. While filling the container, the nozzle caught fire from static electricity injuring Jackson. The pump at the station had a warning sign "Explosion or Fire Hazard" that stated that gasoline may be dispensed only into portable containers approved by the National Fire Protection Association. The warning also stated that, "Portable containers must be placed on the ground prior to filling to avoid explosion or fire from static electricity." Despite this cautionary language, the Court ruled that Jackson was entitled to a jury trial on the issue of whether the warning was adequately communicated. The Court made this ruling even though Jackson admitted he never read the warning sign. The Court apparently reasoned that had the warning sign included a heading that said, "Caution - Containers," Jackson may have read the warnings and avoided injury.

LESSON: A terminal that permits users to fill small containers with gasoline at the rack, or that operates service stations, should make sure that warning signs have a separate heading for containers. The warning signs should be prominently displayed. Under that heading, the requisite warnings should be listed. The warnings should include language that: (a) Portable containers must be placed on the ground prior to filling; (b) filling unapproved portable containers is unlawful and dangerous; (c) the container must close securely; (d) the container must feature a spout so that the contents can be poured without spilling; and (e) the container must be properly labeled. (Camden Oil Company, LLC v. Jackson et al.)

Please address any comments or questions to Mr. Bode at 202-862-4300 or wbode@bode.com.

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