Almost four months after Hollister company Dassel’s Petroleum,
Inc. filed a lawsuit against retail giant Safeway alleging
predatory pricing, the case has been lingering in legal limbo and
could be drawn out for two years, according to attorneys.
Almost four months after Hollister company Dassel’s Petroleum, Inc. filed a lawsuit against retail giant Safeway alleging predatory pricing, the case has been lingering in legal limbo and could be drawn out for two years, according to attorneys.
Dassel’s filed a civil case in the San Benito County Superior Court in April claiming that Safeway was selling gas for less than they bought it for, which was pushing out the local competition. Since filing, a judge dismissed two motions Dassel’s filed in an attempt to make Safeway raise its prices, according to court documents.
Robert Sallander, one of Safeway’s attorneys, said the motions were denied because Dassel’s did not show that Safeway’s gas pricing was illegal.
“They wanted Safeway to immediately raise their gas prices… and a judge refused. He said they had not showed a likelihood of prevailing on the merits,” Sallander said.
While the process is slow and tedious, and Dassel’s motions have been denied so far, the company is pursuing the suit because it feels it still has a strong case, said owner James Dassel.
Dassel would not comment on his personal feelings about the case or the denied motions, because it would compromise the company’s status in the suit, he said.
“I’m trying to be as candid as I can, but I can’t jeopardize Dassel’s position, and it’s not my intention to make it a media circus,” Dassel said. “But I haven’t said, ‘no comment,’ either… We still feel as though there are some possible violations of law and code here.”
Dassel’s attorney, Rusty Rinehart, did not return phone calls to his office Thursday and Friday.
Sallander believes Safeway will prevail in the lengthy suit because Safeway simply did not break the law, he said.
“I don’t think what Dassel’s is doing is in the best interest of the consumer,” Sallander said. “My sense is, why are they, in this period of astronomically high gas prices, pushing Safeway to charge more?”
Dassel doesn’t believe the issue is how expensive or inexpensive gas prices are, but whether a legal violation has been committed. He conceded gas pricing is an emotional issue in the community, but the pricing is not why he chose to sue Safeway.
“We feel there are statues on the books that protect both the buyer and the seller, and we feel there is a possibility there may be some violations there – that’s the issue,” Dassel said. “(Higher prices) may be the result, but that’s not the issue we’re addressing.”
In a declaration filed by Safeway in June, the grocery store accused Dassel’s suit of being solely based on speculation and attempting to prohibit healthy competition in the community.
“It may be that Dassel’s longs for the ‘good old days’ when, as the dominant wholesaler of gasoline to retail stations in Hollister, it raked in fat margins,” the declaration stated. “But the desire to return to the days of limited competition, and to bolster its revenue by curtailing the rigorous competition currently existing in the Hollister gasoline market does not justify Dassel’s misuse of California law.”
Dassel’s filed a declaration opposing Safeway’s statement, claiming the store made “gross misstatements,” such as claiming that Dassel’s is not a retailer of gasoline, in an attempt to persuade the court that Dassel’s could not be injured financially by Safeway’s competition.
The statement also accused Safeway of not providing adequate evidence that they are in fact buying gas from regional distribution facilities, or “racks,” at the same price Dassel’s is and then price-cutting it.
“Conspicuously absent from Safeway’s opposition is clear rebuttal evidence showing that Safeway is not selling fuel below cost and with the intent of harming competition,” the statement said. “Adding insult to injury, despite repeated notice… Safeway continues to violate California law and harm local competition unabated.”
The next court date scheduled is August 19, where Dassel’s will ask that Safeway provide further documents concerning the corporations’ gas pricing.
The hearing will be held at 3:15 p.m. at the San Benito County Superior Court in front of Judge Harry Tobias.
“There isn’t much new information,” Dassel said. “But we’re still working on it.”
Erin Musgrave can be reached at 637-5566, ext. 336 or at
