As co-lead counsel, Berman Tabacco negotiated a novel settlement against Unocal Corporation in an action alleging that the California oil company illegally monopolized Reformulated Gasoline (RFG), thereby forcing California consumers to pay artificially inflated prices for CARB-compliant summertime reformulated gas.
RFG, a blended gasoline that burns cleaner and reduces air pollutants, was required by the Clean Air Act in urban areas with heavy smog. Of gasoline sold in the U.S., 30% is reformulated, according to the Environmental Protection Agency. Plaintiffs alleged that as a consequence of Unocal’s conduct, supra-competitive prices were passed on to consumers. Unocal’s own economic expert had testified under oath during an administrative proceeding before the Federal Trade Commission (“FTC”) that 90 percent of any royalty earned under Unocal’s five RFG patents would be passed through to consumers in the form of higher retail gasoline prices.
The parties settled the case for $48,000,000 to be paid on a cy pres basis to (1) a California statewide automobile repair and scrap program to reduce emissions of hydrocarbons, oxides of nitrogen and particulate matter; and (2) an open-grant program for projects demonstrating fuel or clean air emissions benefits.