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Mercer: South Dakota Could Face Class Action Lawsuit over Illegal Low-Octane Gasoline

Sometimes Bob Mercer gives me the feeling that he's a tool of the Pierre establishment. And then Bob Mercer whacks the Pierre establishment upside the head.

Mercer appears, like much of the South Dakota press, to be taking seriously the proposed investigation of corruption and incompetence in Secretary of State Jason Gant's office. Now Mercer has two posts up taking Governor Daugaard and his predecessor to task for allowing the sale of illegal low-grade gasoline in South Dakota.

First Mercer expresses his confusion as to how a state rule can trump state law. He also outlines the Rounds family ties to Big Oil that would have allowed us to fall into the habit of selling illegal gasoline:

Petroleum has been an important matter for several generations of Rounds family members. For many years the former governor's father, Don Rounds, was the lobbyist for the South Dakota Petroleum Council. By the time Mike Rounds was governor, the lobbying contract had passed through other lobbyists, who enjoyed good rapport with Gov. Rounds. One of Mike's brothers, Dennis Rounds, also was the long-time director for the state petroleum release council, one of the offices that deal with spills and leaks; he no longer is in that position, after that office was consolidated as part of reorganization under the Daugaard administration [Bob Mercer, "Common Sense Overwhelmed by Gas Fumes?" Pure Pierre Politics, 2012.06.21].

After reading Attorney General Marty Jackley's official opinion that selling 85-octane gasoline does indeed violate South Dakota law, Mercer unloads with this speculation as to who might sue whom over this breach of law and public trust:

There could be inestimable amounts of money at stake over a practice that the Daugaard administration, and the Rounds administration before, openly condoned. Could there be a class-action lawsuit? And what if motorists start contacting the consumer protection office of the attorney general with their claims? How will the federal government treat this matter? Waving a magic wand of emergency rules that declare 85 octane to be legal, as the Daugaard administration is now attempting in an effort to declare "all is fine," might be fine if this was only a fairy tale [Bob Mercer, "So Who Will Bring the Lawsuits?" Pure Pierre Politics, 2012.06.22].

Let's see... just about three million people a year visit Mount Rushmore. Divide that by five (tour buses, family vans...) to figure actual vehicles. Multiply by ten years. Six million motor vehicle owners? Suppose a class action suit could win each one some paltry consolation prize, say, a gift certificate for a tank of high-octane gas, worth fifty bucks. Multiply by six million plaintiffs: 300 million dollars. That's about what South Dakota spends on universities, prisons, courts, and the Legislature.

Savvy lawyers should be setting up booths at I-90 rest areas any moment now.

I've already had a couple friends ask why Democrats aren't making a bigger deal out of this illegal-gasoline issue and other currents in this great summertime Republican poop-storm. The Dems are already on it:

Why is there suddenly an attempt to permit the statewide sale of engine-busting gasoline that state law has long declared illegal? When people pull up to the pump, they should get what they are paying for. State government must put South Dakota consumers first [Rep. Steve Street (D-4/Revillo), in SDDP press release, 2012.06.21].

Well-rested Minnehaha County Commissioner and good Democrat Jeff Barth sends this comment to that Sioux Falls paper and to me:

If corporations are people... and it is OK for corporations to break the law in South Dakota. Can all people break the law? Any law? Can the governor choose which laws to enforce? [Jeff Barth, e-mail, 2012.06.22]

Dems may not have to work too hard to help Republicans collapse under the weight of their own one-party rule-by-fiat arrogance. We can relax in the shade, let the Republicans keep digging, shout some occasional encouragement. Then when the time is right, we simply stroll over and shovel the dirt back in on top of them.

18 Comments

  1. Rorschach 2012.06.22

    To answer Jeff Barth's question, "Can the governor choose which laws to enforce?" one need only look to the President (and the Daily Show last night) for analogies.

    The President has chosen not to enforce immigration laws - allowing young illegal immigrants to remain in the US. The basis for this decision is that limited enforcement resources will be targeted at a different class of immigrants. The President has also chosen not to defend the Defense of Marriage Act (DOMA) in court despite it being the law of the land.

    When Democrats choose what laws not to enforce, Democrats cheer and Republicans jeer. So the answer to the question would seem to be, "yes, the Governor can choose which laws to enforce. My point (and the Daily Show's point) is let's apply some consistency to everyone equally regardless of which team we are on.

    What the Governor can't do is implement an emergency rule that is contrary to state law - which is exactly what he did with 85 octane gas. Rules and emergency rules are only effective to the extent that they comply with law. The rule allowing substandard gas to be foisted on SD consumers is contrary to law and needs to be canceled immediately. If Marty Jackley has a backbone he will tell the Governor to repeal the emergency rule immediately and will tell junk gas peddlers they are subject to prosecution for selling anything less than 87 octane in SD. Any bets on whether or not the AG will choose to enforce the law?

  2. Rorschach 2012.06.22

    I should have read the official AG opinion before I commented. So it is a rule that incorporates an outside standard which mandates that gas sold in SD must have at least 86 octane. The governor's emergency rule contradicts the standard incorporated into the existing rule. The governor can replace one rule, or a portion thereof, with a different rule.

    The question is whether it's wise to do so here. I have heard from Republicans upset about the Governor allowing the sale of substandard gas in SD. I don't know of anyone who's not in the gas business that's happy about this. And I suspect that those in the gas business aren't too happy about their competitors using the cheap crap to undercut them on price either.

  3. D.E. Bishop 2012.06.22

    I agree with Rorschach, and find that selective enforcement of laws on any level is concerning. GWB's version of selective enforcement were his "Signing Statements" in which he declared that he would disregard bills which he signed but didn't really like.

    Regardless of who does it, regardless of what that particular law is about, the gov/pres cannot selectively enforce, any more than citizens can selectively obey.

  4. Jeff Barth 2012.06.23

    Rorschach and D.E. Bishop are both right and bring up good points. I would point out two things:
    1) One executive, Obama, favors people (undocumented workers) while the other,Daugaard, favors oil distributors.
    2) When an illegal American exceeds the speed limit, say 77mph in a 75 zone that is also selective enforcement.

  5. Ryan 2012.06.23

    Even with sale of 85 octane gas we experiencing a shortage in SD. Take away the western supply (which is where 85 comes from) and see how many south dakotans care especially west river!

  6. grudznick 2012.06.23

    If young Mr. Jackly lets Gant off the hook for his idiocy and then eliminates thousands and hundreds of gallons of gasoline from our pumps he will have a tough go when he runs for SOS.

  7. larry kurtz 2012.06.23

    spin it like a frisbee, grudz: tropical storm Debbie is shutting down rigs in the Gulf of Mexico.

    Who are you?

  8. caheidelberger Post author | 2012.06.24

    Ryan: a shortage? Seriously? Quantify that for me. How many stations have lines or rationing? Where are prices spiking due to shortage? Why would suppliers not be shipping enough gasoline to South Dakota? And does a shortage justify allowing the sale of illegal goods?

  9. Rorschach 2012.06.24

    We've got a shortage of Louis Vuitton bags in SD. Let's authorize retailers to start selling the Chinese knockoffs.

  10. caheidelberger Post author | 2012.06.24

    As long as Chinese knock-offs don't make my engine knock, o.k.!

  11. Ryan 2012.06.24

    Don't take my word for it, go ask your local gas station. Ask why the governor again had to suspend hours of service limits because trucks are having to wait for hours at the terminals for gas east river. Start sending west river trucks east and you will have cars waiting in line and price spikes. Didn't you read in the governors press release that was one of the compelling reasons to allow 85 octane for now? We are the end of the pipeline which is another reason SD needs Transcanada and Hyperion!

  12. caheidelberger Post author | 2012.06.24

    If there's a shortage, why are prices drifting down?

    As for TransCanada, I think we've had this conversation before. Not one drop of tar sands oil transported by TransCanada is bound for the American market. Their intent is to clear the glut at Cushing, ship that oil out to the more lucrative global market, and raise thus raise the price of North American oil (West Texas Intermediate) to match world oil (Brent Crude). The Keystone pipelines don't solve the local shortage you and the Governor claim exists; they make it worse.

    And if the price of easing this shortage you image is tearing up good farm land and subjecting Union County and environs to ongoing pollution and petro-dependence, then I'll pass... and I'll keep pedaling! Don't double down on oil dependence; invest in alternatives like fuel efficiency, electric cars, and mass transit that will make oil demand plummet and make gasoline and diesel cheaper for the few folks out in the boonies who still have to rely on big pickup trucks for long hauling and tractors for farm work.

  13. Ryan 2012.06.25

    you don't see the shortage reflection in the price because crude has dropped nearly 30% from its high not too long ago. Gas certainly hasn't fallen that far.

    You're right, w/o Hyperion, transcanada probably hurts us locally.

  14. caheidelberger Post author | 2012.06.25

    I'm not convinced Hyperion helps us, either. If TransCanada's producers are selling their product to Gulf Coast refiners exacting top dollar from global buyers, what's their motivation to sell for less to a refiner in Elk Point stuck with local buyers who won't pay as much?

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