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Gas station owner wins court round against BP

Post by John Gillie / The News Tribune on Aug. 31, 2011 at 12:51 pm with No Comments »
August 31, 2011 3:02 pm

The Tacoma owner of a string of Western Washington gas stations that ARCO had sought to shut down today won the first court battle of what could become a long legal war

But the court victory could be a hollow one if Hatem Shalabi, the stations’ owner, can’t convince a wholesaler that the court victory clears the way for them to supply him gasoline.

BP reportedly has warned wholesalers against getting involved in the dispute by supplying Shalabi with unbranded gas.

The legal victory came this morning before U.S. District Judge Marsha Pechman in Seattle. She ruled against BP’s request for a temporary restraining order that would have prohibited Shalabi from selling any other gasoline but ARCO’s from the 15 stations. BP is ARCO’s owner.

ARCO cut off Shalabi’s supply of fuel early this month after he failed to pay $1.3 million the oil company says he owed for gasoline delivered to his stations. Shalabi claims the $1.3 million represents only a two-day supply of fuel for his stations. The station owner said he was seeking new funds when ARCO stopped delivering fuel.

The company sought a court order to prevent Shalabi from selling unbranded gasoline at the stations. Shalabi had found other suppliers after ARCO stopped delivering to his stations.

The oil company argued that Shalabi is bound by deed restrictions on the stations it bought from ARCO requiring him to sell only ARCO gas at the stations.

The judge said she didn’t agree with ARCO’s argument that it would suffer irreparable harm if she didn’t issue the restraining order.

Shalabi had covered or removed ARCO signs at the stations after the company quit supplying him fuel. But ARCO argued the stations were still identifiable as ARCO stations because of their distinctive color schemes and because some logos in the ARCO-branded AM/PM convenience stores on the sites were still plainly visible.

Shalabi’s stations were among some of the highest volume stations in the Tacoma area. His highest volume station at Puyallup and Portland avenues in Tacoma often was listed on independent gas price Web sites as selling the lowest price gas in the Tacoma area

Shalabi said that BP has accomplished its aim of shutting him down in most cases because it sent letters to his wholesale gas supplier suggesting they could become a party to the legal action if they continued to supply him gas. That supplier quit delivering gas to his stations.

The station owner’s attorney, Texas lawyer David Schiller, said that he hopes the judge’s denial of BP’s request will persuade wholesalers to once again supply him with gas.

BP spokesman Scott Dean said the company will continue to pursue enforcement of what the company believes are “valid and enforceable” deed restrictions. Those kinds of restrictions have been upheld by other courts, said Dean.

ARCO could seek a temporary injunction against Shalabi. Such a legal move would trigger more and longer legal proceedings.

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