It’s not often that you hear low gas prices described as “predatory”, but that’s exactly what an Alabama based gas station is alleging against Texas’ most beloved convenience store chain, in a lawsuit filed last Friday. Buc-ee’s convenience stores, known for being the size of a grocery store, pristine bathrooms, and its iconic beaver mascot, opened its first store outside of Texas on January 21st. Within two weeks, an Alabama based competitor, Oasis Travel Center, LLC, filed a federal lawsuit in the Southern District of Alabama claiming that Buc-ee’s gas was so inexpensive it violated the Alabama Motor Fuel Marketing Act (AMFMA).
Under AMFMA, it is “unlawful for any person engaged in commerce in [Alabama] to sell or offer to sell motor fuel below cost… where the effect is to injure competition.” The lawsuit states that when Buc-ee’s opened it offered regular unleaded gasoline at $1.799 cents per gallon Buc-ee’s was blatantly and aggressively selling its fuel below cost in violation of the AMFMA. Although Oasis claims it has been damaged in an amount exceeding the $75,000 minimum threshold for a federal lawsuit, it is not seeking any money from Buc-ee’sat this point.
The goal of the law is to protect consumers. Larger companies can afford to operate without profit for a short time while their smaller competitors may not be able to do the same. Customers frequent the store with the cheap gas causing the other stores to go out of business. Then, when all the competition has closed its doors, the company with the cheap gas dramatically increases its prices. The customers have no choice but to pay the higher prices because the large company now has a monopoly on the fuel market.
Alabama residents don’t seem concerned about the alleged AMFMA violations though, calling the lawsuit a “joke” and “un-American”. One resident even went so far as to say, “Buc-ee’s is the best gas station ever.” While the merits of the lawsuit may not be decided for some time, it seems to have backfired from a public relation stand point. News coverage about Buc-ee’s inexpensive fuel prices has spread across Alabama and Texas in what essentially amounts to free advertising.
Buc-ee’shas a good track record in lawsuits. Last May a jury sided with Buc-ee’s in its claim that a competitor’s logo violated Buc-ee’s trademark protections. In that lawsuit, Buc-ee’s was the plaintiff asking for a court order prohibiting the competitor from using the infringing logo. This time, Buc-ee’s is the defendant and it’s Oasis that is asking for a court order prohibiting Buc-ee’s from selling it’s fuel as such an inexpensive rate. Essentially, Oasis is asking the court to force Buc-ee’s to raise gas prices.
Buc-ee’s is set to open another Texas location during the second quarter of 2019 on Interstate 30 in Royse City. Residents of Northeast Texas have been eagerly awaiting completion of the 50,000 square foot “convenience center” since it was first announced in 2015. The Alabama lawsuit won’t affect the Royse City opening date, and Texan consumers, who are already used to some of the lowest gas prices in the country, can expect plenty of competitively priced fuel.
John Litzler directs the Church Law division of Christian Unity Ministries in San Antonio. He is a graduate of the University of Texas and Baylor Law school. He is a member of the SSHS class of 2004.