Montana Distributor Refutes Allegations


A Montana distributors attorney said his client denies all accusations in a lawsuit recently settled with Chevron, which had claimed the company sold Chevron lubricants without authorization and under counterfeit trademarks.

Cross Petroleum Service and its owner, Greg Cross, has consistently denied liability for the acts alleged by Chevron, Ronald Youde, of Youde Law Firm P.C. in Billings, Montana, told Lube Report, which covered the lawsuit settlement in its July 1 issue. He noted the May 18 stipulated consent judgement was agreed to voluntarily by Cross Petroleum in advance of any adjucation of the contested issues. Chevron did not pursue an injunction against Cross Petroleum, nor did Chevron conduct any discovery, because there was no threat of immediate harm to Chevrons business interests.

Youde explained that a consent judgement is a court-approved and court-enforced settlement. Consent judgements contain no admission of liability because they are agreed to by consent, thereby dispensing with the need for proof, he asserted.

According to Youde, Chevrons decision to file suit overlapped with Chevron Global Lubricants expansion into the eastern Montana market where, he asserted, Cross Petroleum Service is its primary competitor.

Chevrons accusations in its lawsuit were accompanied by demands for Cross Petroleums customer list, products sold and revenues generated, Youde claimed. Cross Petroleum consistently denied the allegations and rejected Chevrons demands for proprietary data, citing the Uniform Trade Secrets Act, he said.

According to Crosss pretrial statement filed with the district court in February 2015, the company was a valued business associate with Chevron U.S.A. from 1982 until 2002, receiving recognition as a Gold Performer as a Chevron reseller. Their relationship began to unravel however after Chevron acquired Texaco in 2001. At the time Cross was distributing Texaco lubricants from the Texaco-Shell joint venture Equilon as well, but a few years after the merger, Chevron regained the rights to the Texaco brand name and told Cross to stop using it.

Youde said that generally speaking, supply disruptions and confusions occur when large multinational corporations make decisions to enter or exit markets through large-scale acquisitions and mergers. Confidence in traditional products and brands decline, he said. Long-time relationships between distributors and end users are damaged or destroyed. It is left to the local distributor to work directly with the end user to contain the damage.

When Chevron took back the Texaco brand, heritage Texaco distributors were left to find supply and retain identity, he said. Some Equilon distributors heavily stocked Texaco bulk and packaged inventories in anticipation of supply disruptions and customer confusion. Some Texaco distributors were forced to make alignments with their competitors or simply get out of the Texaco business. Distributors who wished to be free of the Equilon/Texaco confusion sold their inventories. It was left to the remaining distributors to alleviate customer anxiety and uncertainty by resolving questions of supply, quality, pricing and marketplace identity. As Texaco-brand inventories dwindled, conversions were made to other comparable products.

According to Crosss pretrial statement filed Feb. 2, one of its Equilon customers was a product reseller named Sweley Oil, now known as Nortana, which expressed a desire to continue purchasing comparable non-Equilon products from Cross Petroleum Service.

In its lawsuit filed in September 2014, Chevron said it learned that Nortana Grain Co. and its predecessor-in-interest had purchased Texaco-branded lubrication products from Cross Petroleum Service, in drums it alleged were labeled with Chevron trademarks and sold to Nortana under the trademarks as Chevron products.

Attorney Youde denied that, explaining to Lube Report that CPS utilized generic labeling and packaging at the request of a single, long-time customer – Sweley/Nortana – for comparison purposes between equivalent products, which he asserted was not unlawful under the circumstances.

There was no potential for confusion, the attorney stated. The comparison labeling bore no resemblance whatsoever to Chevron or Texaco packaging. It was a piece of white paper taped to a generic black drum, which could never be confused for a distinctive Texaco drum – black with red band – or Chevron blue drum with corporate labeling. Cross identified the contents of the barrels to the customer at the time of delivery some years ago and again to Chevron upon request in 2014.

He noted that Cross Petroleum Service has no control over the drum packaging and contents after delivery. In the consent judgement, Cross Petroleum Service voluntarily agreed to discontinue this lawful comparison-labeling practice with this customer, Youde said.

The attorney deemed innocuous a cease-and-desist letter filed by Chevron against CPS in August 2007 over an old Equilon banner with both Shell and Texaco marks, which had remained at one of CPSs business locations after Equilon was dissolved. My client, a Shell distributor, cooperated with Chevrons request, and the Texaco mark was immediately and permanently removed without further incident. The 2007 letter does not provide factual support for any of Chevrons legal theories in its 2014 complaint. The banner and the black drums are entirely unrelated.

Reached for comment, Chevron told Lube Report in a statement, Chevron believes the consent judgement speaks for itself. The judgment includes, among other things, a nationwide injunction against Cross Petroleum Service as well as an acknowledgement that Cross Petroleum Service used and reproduced the Texaco, Star Logo, Meropa, Regal and Ursa marks on labels and invoices used to identify lubricant products which were not manufactured, distributed or produced by, or affiliated in any other manner with, Chevron.

Cross Petroleum Service is not related to Cross Petroleum, which is a Chevron lubricants distributor based in northern California.