ILMA Compoundings April 2017 - 24

motor oils that are unsuitable for use
in, and can damage the engines of most
of, its customers' vehicles. The plaintiffs
also contend that Dollar General
deceived its customers by marketing
and positioning its motor oils on store
shelves immediately next to competitors' more expensive products.
Dollar General, in defending
against these lawsuits, which have
been consolidated in federal court in
St. Louis, says that its motor oil labeling complies with the uniform regulations and method of sale requirements established by the National
Conference on Weights and Measures
(NCWM) in its National Institute of
Standards and Technology (NIST)
Handbook 130. The discount retailer
also argues that its shelf placement is
not deceptive because customers can
and do read container labels.
"The Dollar General litigation will
test what constitutes deceptive or
unlawful practices in retailing motor
oils," said ILMA General Counsel Jeff
Leiter. "What representation or omission would be material to a reasonable
person is a key question at trial."
Leiter adds that selling only currently licensable API engine oils on
store shelves largely eliminates the
risk for retailers.

Smitty's Supply Case Brings
Attention to Quality Control
The Orange County, California, district
attorney finalized a settlement in October 2016 with Louisiana-based Smitty's
Supply, which is not an ILMA-member
company. The settlement resolved the
state's claims of unfair business practices relating to Smitty's mislabeling of
various products, including motor oils,
under California law. California did
not find any instances of actual harm
to vehicle engines.
In addition to paying $555,000
in civil penalties and reimbursing
$195,155 to the state for its investiga-

24

APRIL 2017

| COMPOUNDINGS | ILMA.ORG

tion costs, Smitty's agreed to injunctive
relief, prohibiting the company from
making and selling motor oils that do
not comply strictly with California and
federal laws on quality and labeling.
Smitty's will also put a testing program
in place to ensure that its products sold
in California meet the performance
levels claimed on the labels.
Importantly, the testing program
is to be explained to the Smitty's
employees involved with its lubricant
products, ranging from management
to transportation.

While California is just one state,
ILMA members say, "enough is
enough." Trying to tackle the problem
of keeping obsolete oils out of the
hands of consumers state-by-state is
a time-consuming process. Instead,
ILMA is taking a different approach
by presenting its case to the NCWM.

A Nationwide Approach to
Banning Obsolete Oils
NCWM is an organization of state
weights and measures officials that
develops model regulations and standards, governing everything from gas


http://www.ILMA.ORG

ILMA Compoundings April 2017

Table of Contents for the Digital Edition of ILMA Compoundings April 2017

ILMA Compoundings April 2017 - Cover1
ILMA Compoundings April 2017 - Cover2
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