NEW YORK -- The U.S. Defense Department will face more than $2 billion in lawsuits from oil companies that claim they were underpaid in jet fuel supply deals, an attorney handling the cases told Reuters on Monday.
Between six and 10 oil companies are poised to join ChevronTexaco Corp., Phillips Petroleum and others that have already filed claims with the Pentagon, increasing number of participating companies at around 30, according to Reuters.
“About $1.7 billion in claims has been filed so far, and we're easily going to break $2 billion,” said attorney Keith Burt of McKenna and Cuneo in Washington. “There are six to ten new firms planning to file claims,” he said.
The companies have alleged that the military’s fuel buying wing, the Defense Energy Support Center (DESC), used pricing methods that resulted in underpayment for contracts starting in the early 1980’s. The claims are similar to those made by Pride Cos. LP, an Abilene, Texas-based firm that won a $60 million judgment against the DESC in a federal court last year for being underpaid 8 percent to 10 percent.
Dozens of U.S. energy companies rushed to file claims in the wake of the Pride decision. The DESC, the world's largest single fuel buyer, holds that it paid a fair market price for jet fuel consistently through the 1980s and 1990s.
Among the companies filing claims against the Defense Department already are ChevronTexaco, Phillips, Williams Cos., Sunoco Inc., Coastal Corp., Koch Refining, Wyoming Refining, Giant Industries, Calcasieu Refining, La Gloria Oil, PetroStar, Navajo Refining, Montana Refining, Berry Oil, Sinclair Oil, Placid Refining, and five others that remain unnamed, according to Reuters. The six to 10 new companies preparing claims could not be immediately identified.
