P/cloudy
36°
P/cloudy
Hi 65° | Lo 46°

Judge tosses out lawsuit against Rymes Proprane

A local oil company did not break the law last summer when it lowered its fuel prices well below those of its competitors, a federal judge has ruled.

United States District Court Judge Landya McCafferty threw out the case brought by Concord’s Johnny Prescott & Son Oil Co. against Rymes Propane and Oil Co. Prescott filed the suit in October, seeking damages for what it said was a violation of the state consumer protection act, illegal restraint of trade, illegal monopoly, discriminatory trade and illegal underselling.

McCafferty dismissed the first three counts because the state statutes did not fall under the federal court jurisdiction.

“The court finds no reason to retain jurisdiction over the state law claims in this case,” McCafferty wrote in the eight-page decision, handed down in June.

The lawsuit stemmed from a July 2013 conversation between Rymes Vice President John Rymes and Tom Prescott, president of Johnny Prescott & Son.

Prescott said that during this conversation Rymes brought up Davis Fuels, a new company in Epsom, according to court documents. Rymes reputedly “expressed dismay” at hearing Davis had taken one of his customers, and that Davis was purchasing fuel from Prescott. Rymes, Prescott said, told him: “Game on, Tom. I will be selling heating oil in the Concord-Bow area for cost so you won’t make any money this year.”

Rymes denied making the comments.

On Aug. 10, Rymes began advertising heating oil at $2.99 a gallon for cash customers and $3.07 a gallon for pre-buy customers, according to court documents. Prescott alleged the price was about 50 cents below the price of any other distributors’ prices, and below cost for dealers. At the time, Rymes said Prescott had mischaracterized his pricing. Prescott filed suit shortly after and the dispute went public. Rymes reportedly placed fliers on car windshields at Epsom Old Home Day and Prescott took out newspaper ads calling attention to the different prices Rymes was charging customers in Concord and the surrounding area.

Prescott’s claim of discriminatory pricing was dismissed because it did not meet two significant prerequisites under federal law, McCafferty wrote. Prescott needed to prove the prices he complained about were below an appropriate measure of Rymes’s cost, meaning Rymes would have had to sell at a loss. The defendant also must have had a reasonable prospect of recouping its investment in below-cost prices to be considered discriminatory pricing, McCafferty wrote.

“Prescott’s complaint fails to allege sufficient facts under either prong,” McCafferty wrote. “First, even giving Prescott’s complaints a broad reading, nowhere does it allege that Rymes’s prices fell below an appropriate measure of Rymes’s cost. The closest Prescott gets is the allegation that Mr. Rymes intended to sell ‘heating oil in the Concord-Bow area for cost.’ ”

Selling at cost does not violate the statute, McCafferty said.

McCafferty also dismissed Prescott’s allegation that Rymes had illegally undersold his fuel, saying the statute he based his argument on is not applicable in this case.

(Iain Wilson can be reached at 369-3313 or iwilson@cmonitor.com.)

There are no comments yet. Be the first!
Post a Comment

You must be registered to comment on stories. Click here to register.