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85 octane suit moved to Brookings

Mitch Fargen

Two South Dakota companies accused of mislabeling gasoline have asked a judge to dismiss the class-action lawsuit filed against them.

M.G. Oil Company, based in Rapid City, and Harms Oil Company, based in Brookings, filed a motion to dismiss the suit Friday. The lawsuit itself was filed July 2 by six people, including state Rep. Mitch Fargen, D-Flandreau.

The suit alleges both companies knowingly mislabeled 85 octane gasoline as 87 octane for at least 10 years. By doing so, the companies "knowingly and fraudulently charged inflated prices" to consumers in South Dakota, the plaintiffs' complaint says. Anyone who bought mislabeled gasoline from either company since Jan. 1, 2002, should be eligible for damages, the complaint says.

An octane rating is the standard measure of a fuel's performance. Fuel with a low octane rating can cause engine problems. After it was discovered this past summer that 85 octane fuel is technically illegal in South Dakota, Gov. Dennis Daugaard issued a temporary ruling allowing the sale of the lower-octane fuel while a permanent rule is considered.

If the companies' motion to dismiss the suit is denied, they have requested a judge strike all the class-action allegations made in the suit, which would limit the number of people eligible to receive damages to those who filed the suit. The companies also requested a judge halt discovery -- the process allowing a party in a case to access any evidence held by the opposing party -- while their motion to dismiss the suit is considered. The companies claim that request is necessary because the plaintiffs have requested nearly every document related to the companies' petroleum distribution over the last ten years.

Though the case was originally filed in Jerauld County, it was moved to Brookings County last month to save on costs and prevent unnecessary delays, court documents say. The case will remain in Brookings County while the court determines if the class-action portion of the lawsuit is valid.

If the case goes to trial, M.G. Oil and Harms Oil have the right to request the lawsuit be split and have separate trials held in the counties where they are based -- Pennington County for M.G. Oil and Brookings County for Harms Oil.

Fargen said Tuesday when contacted by The Daily Republic that he has been advised by his attorney Brian Donahoe, of Sioux Falls, not to publicly comment on the case.

Criminal charges were filed Friday in Beadle County against M.G. Oil alleging the company illegally sold 85 octane gasoline and mislabeled it at its five Corner Pantry stations in Huron. Another gasoline retailer, 281 Travel Center in Wolsey, is charged with mislabeling gasoline it bought from M.G. Oil.

The charges are misdemeanors carrying a maximum punishment of 30 days in jail and a $500 fine.