Kentucky Attorney General says customers suffer due to Marathon's greed

LOUISVILLE, Ky. (WDRB) --  A federal judge in Louisville has turned down Marathon Petroleum’s request to dismiss Kentucky’s lawsuit alleging the Ohio oil refiner has a monopoly on the supply of gasoline in Louisville and Northern Kentucky.

The June 8 ruling by U.S. District Judge David Hale means the lawsuit will move into the evidence-gathering stage, with all but one of the state’s claims against the company remaining intact.

Former Kentucky Attorney General Jack Conway filed the lawsuit last year before his unsuccessful run for the governor. Conway’s successor, Andy Beshear, is “actively pursuing the case,” according to a statement Monday.

“We agree with judge’s decision and we will move forward aggressively on the merits,” Beshear said.

The lawsuit alleges that Marathon has used anti-competitive tactics to maintain a monopoly over the supply of the cleaner-burning reformulated gas known as RFG in Louisville and Northern Kentucky, which has led to higher prices for consumers.

For example, the state alleges that Marathon has “supply agreements” with retailers requiring them to buy all of their RFG gas from Marathon or pay a penalty.

Hale said that allegation, among others, is specific and factual enough to avoid Marathon’s attempt to dismiss the claims outright.

Meanwhile, Hale has not yet ruled on a Marathon filed a motion challenging the state’s hiring of outside lawyers with antitrust expertise to assist in the case.

As WDRB previously reported, Conway’s office hired Boies Schiller & Flexner, of New York, and Strauss Troy Co., of Cincinnati, on a contingency fee basis. That means the lawyers will get a cut of the damages earned if the lawsuit is successful.

But Marathon said the state’s arrangement gives the outside law firms too much control over the case and creates a conflict of interest. For example, the state can’t agree to a non-monetary settlement or drop the case without having to compensation the outside firms for their time on the case at their hourly “market rates,” according to Marathon’s motion.

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