Class Action, Ethanol Blend Boat Fuel

Tuesday, January 27, 2009

Exxon, Chevron, Conoco Phillips, BP and Shell, all defendants in a proposed Florida class action lawsuit, were dealt a huge blow on Jan. 20 when a Federal Court in the Southern District of Florida issued an order denying their joint motion to dismiss a lawsuit filed by three Florida residents, Erick Kelesceny, John Egizi and Todd Jessup.

The Plaintiffs allege that the world's largest oil companies failed to warn them, as well as all Florida boat owners, that the gasoline they purchase at the pump, which is blended with ethanol, may destroy fiberglass tanks and tends to absorb water and phase separate, which could cause damage to all boats, regardless of whether they have a fiberglass tank.

The lawsuit was filed by consumer protection lawyers, Jeffrey Ostrow, David Ferguson and Jonathan Streisfeld of The Kopelowitz Ostrow Firm, P.A. (TKO), a litigation firm in Fort Lauderdale, Florida. The oil companies argued that the proposed class action lawsuit is preempted by federal and Florida law. By denying the motion to dismiss, the Court has allowed the Plaintiffs to proceed with their lawsuit.

The basis for the Court's ruling is that federal law encourages, but does not require, the use of renewable fuels such as ethanol, while Florida does not require it be used by boat owners. If successful, the oil companies will be forced to place a warning label on all pumps at all gas stations in Florida, notifying the boating public that usage of gasoline blended with ethanol may be hazardous to their boats.

Further, the Plaintiffs seek compensation for all Florida boat owners who have been damaged as a result of the oil companies' failure to warn of the destructive tendencies of fuel blended with ethanol when used in boats. Boat owners have been forced to spend thousands to tens of thousands of dollars to repair their boats.

"Denial of the motion is a significant step toward redressing the wrong perpetrated on Florida's boating population," said TKO Managing Partner, Jeffrey Ostrow. "Florida is the boating capital of the world and it is reprehensible for oil companies to enjoy significant profits while knowingly paralyzing Florida's boaters. We hope to have the opportunity to represent all aggrieved boaters throughout Florida."

Denial of the motion is particularly notable in light of the fact that a similar lawsuit in California was previously dismissed at the same stage. TKO, based in Fort Lauderdale, is a full-service firm representing business entities and individuals. Practice areas include: commercial litigation, corporate transactions, class actions, construction law, employment, family and divorce, criminal defense, real estate, medical malpractice, personal injury, insurance law, worker's compensation and bankruptcy law. The firm has additional offices in Palm Beach and Miami-Dade counties.

(www.tkolaw.com)

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