Attorney General Jack Conway Files Suit Against Marathon for Gouging in Louisville and other Kentucky Cities Wednesday, May 13 2015 

gas pump

Attorney General Jack Conway filed a lawsuit today in federal court against Marathon Petroleum.  The suit, filed in U.S. District Court in the Western District of Kentucky, alleges that Marathon engages in anti-competitive practices that lead to higher gas prices for consumers across Kentucky.

“For almost two decades, Marathon has been allowed to run rampant in Kentucky,” Attorney General Conway said.  “Marathon owns and operates the only refinery in Kentucky, and it maintains its wholesale monopoly by making retailers and other potential suppliers enter into contracts that are outright anti-competitive.  This conducts harms everyone who buys gas in Kentucky.”

As reflected in the complaint filed Tuesday, the Office of the Attorney General (OAG) believes Marathon violated state and federal antitrust laws by abusing the monopoly created when Marathon and Ashland Oil merged in 1998. Jack Conway

The suit alleges Marathon abused its monopoly, which led to higher gas prices for Kentucky consumers and businesses. The price disparity is most pronounced in the Louisville and Covington markets, where retailers are required to sell reformulated gas (RFG) during the summer months to reduce pollution emissions and improve air quality.  Gas prices in are generally 20 to 30 cents higher than the rest of the state.  When is compared to St. Louis, an RFG market of similar size in the region, gas prices averaged roughly 25 cents more per gallon in than St. Louis in the summer of 2014.

The Office of the Attorney General alleges that Marathon discourages competition by requiring independent retailers to sign unlawful supply agreements that eliminate wholesale competition, by forming exchange agreements with horizontal competitors that keep other suppliers from entering the Kentucky market, and by writing deed restrictions into the sales agreements of some properties sold by Marathon.

The Attorney General’s investigation uncovered that some supply agreements Marathon enters into with retailers require retailers to purchase 100 percent of their RFG from Marathon, with penalties if the retailers fail to do so.  The agreements also prohibit unbranded retailers from challenging Marathon’s pricing.

Marathon executes exchange agreements with other major suppliers, which allows Marathon to supply branded stations with gasoline.  Through these agreements, Marathon has limited competition.  The competitors have no incentive to upgrade their refineries and supply infrastructure to produce and deliver RFG to Kentucky because Marathon is already supplying the stations with gasoline.

Marathon further reduces competition by adding deed restrictions to some of the property parcels it sells.  The restrictions prohibit the purchaser of the property from selling gas or operating a convenience store.  Some of the restrictions have an exception that will allow for development of a gas station – if the station sells only Marathon gas.

History of the Merger & OAG Investigation
When Ashland and Marathon merged in the late 1990s, the Federal Trade Commission said one state bore watching because the merger could create a lack of competition at the wholesale level.  That state was Kentucky.

Attorney General Conway first started investigating gas prices in Kentucky in 2008 after it became clear that Kentucky stations were charging more for a gallon of gasoline than retailers in surrounding states.  The disparity was even more significant in markets like and Covington, where retailers are required to sell reformulated gas during the summer months.

In 2008, Attorney General Conway forwarded his investigation to the Federal Trade Commission (FTC). It declined to review the merger.  In 2011, Attorney General Conway spoke with U.S. Attorney General Eric Holder and forwarded the investigation to the Department of Justice’s Oil and Gas Price Fraud Working Group.  In 2014, when new commissioners were named to the FTC, Attorney General Conway once again asked for a review of the merger and its impact on Kentucky.

“I am tired of waiting for the federal government to do its job and act on this case,” Attorney General Conway said.  “There is too much at stake, so we’ve taken matters into our own hands.  We are standing up for Kentucky consumers and proceeding with our own antitrust case against Marathon.”

To view a copy of the complaint, visit –  http://goo.gl/A6n3vO

To view a video of the press conference, visit – https://youtu.be/Uu-eClJA3W0

Rep. Jim Wayne questions AG Conway’s ‘informal’ opinion on dispute between Fair Board and Arena Authority Tuesday, Apr 21 2015 

KFC Yum! CenterNine months after a Frankfort committee’s official request, Kentucky Attorney General Jack Conway’s office released a legal opinion last Friday on questions concerning a dispute over whether the Louisville Arena Authority owed the Kentucky State Fair Board a $7.5 million … Continue reading

Bets Are On for Kentucky vs. Wisconsin; Conway and Beshear Ante Up Saturday, Apr 4 2015 

They may be prevented from placing a bet at a casino in Kentucky by stubborn rural lawmakers, but Gov. Steve Beshear and Attorney General Jack Conway are glad to put the Commonwealth’s best stuff on the line in bets with their counterparts in Wisconsin.

From Kentucky.gov…

Attorney General Jack Conway today announced that he will enter into a friendly wager with Wisconsin Attorney General Brad Schimel over the outcome of Saturday night’s National Championship Semi-final game in Indianapolis between the undefeated and number one ranked University of Kentucky (UK) Wildcats and the number one seed and Big Ten Champion Wisconsin Badgers.  If UK wins, Attorney General Schimel will give Attorney General Conway an assortment of Sargento Cheeses, Johnsonville Brats and Leinenkugel Beer.  If Wisconsin wins, Conway will give Schimel a Meacham’s country ham from Union County, where Attorney General Conway’s father was born and raised.

Beshear says things are bad

Beshear puts bourbon on the line

Jack, a tough son of a bitch, is running again

Jack is betting ham

“As much as I respect the athletes from the Kentucky Wildcats, I don’t think they will get their paws on the wonderful Wisconsin-made products I have wagered with AG Conway,” Schimel said. “Our faith in our ferocious Badgers is a bipartisan agreement throughout the state of Wisconsin.”

Conway responded by stating “Given that the game last year came down to a last second shot, the rematch tomorrow night will likely be a game for the ages.  The Kentucky players, guided by National Coach of the Year John Calipari, have proven all season long that they will rise to any challenge, and we are all looking forward to taking on the Big Ten Champions.  Congratulations to the Badgers on their second straight berth in the Final 4, but I look forward to celebrating a Kentucky victory over Wisconsin with brats, cheese and beer from Attorney General Schimel.  Our Wildcats are on an historic roll.  Here’s hoping for the continuation of a perfect season for UK that culminates with a ninth national title. Go CATS.”

The last time Wisconsin and UK met in men’s basketball was last year in the final four, when UK beat Wisconsin by one point on a long three-pointer by Aaron Harrison with six seconds left in the game.  Many of the same players from that game return for the rematch including Wisconsin NCAA tourney superstars Frank Kaminsky and Sam Dekker.  Kentucky returns the Harrison twins but also has a new cast of freshman playing in their first final four.  Willie Cauley-Stein was on the team last season but was not able to play in the game due to injury.  UK has four overall wins in the all-time series to Wisconsin’s one.

And from Beshear’s office:

Governor Steve Beshear and Wisconsin Governor Scott Walker are wagering on their home teams in Saturday’s NCAA Final Four men’s basketball game.

Gov. Beshear bet a basket of Kentucky bourbons from Lexington-area distillers that the University of Kentucky will prevail over the University of Wisconsin. Bourbons are provided by the Kentucky Distillers’ Association.  Gov. Walker bet a basket of Wisconsin cheese, sausage and root beer that Wisconsin will beat Kentucky in the matchup.

“For the second year in a row, the Cats will be facing the Badgers in what is sure to be another thrilling Final Four game between the two teams,” said Gov. Beshear.  “Kentucky has already made history with an undefeated season, and we’ll be rooting them on to continue the streak this weekend.  Go Cats!”

Sides await attorney general’s decision on $7 million Yum! Center contract dispute Tuesday, Mar 10 2015 

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Democratic sources: Logsdon to step down as KDP chair, Patrick Hughes expected to replace him Thursday, Feb 5 2015 

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Two Kentucky legislators want to price the state’s death penalty system Friday, Jan 30 2015 

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Bevin joins crowded Republican field in governor’s race, while prominent Democrats avoid challengers Tuesday, Jan 27 2015 

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No breakthrough in MSD labor contract dispute despite attorney general legal opinions Tuesday, Jan 27 2015 

MSD executive director Greg Heitzman (left) huddles with MSD attorneys Paula Purifoy and John Sheller before Monday's board meetingThe Metropolitan Sewer District board on Monday was presented with Kentucky Attorney General Jack Conway’s legal opinions on arbitration processes that rebutted MSD’s own attorneys, though there did not appear to be any breakthrough on their labor contract dispute that has … Continue reading

Attorney General says binding arbitration is legal for municipal workers at MSD Wednesday, Jan 21 2015 

Jack Conway official portrait - largeFollowing yesterday’s legal opinion from the office of Attorney General Jack Conway that a supermajority vote of MSD’s board to overturn an arbitrator’s ruling is legal under state law, Conway released another opinion today rebutting the arguments of MSD’s attorneys, … Continue reading

Kentucky abandons its two-drug lethal injection protocol Thursday, Nov 13 2014 

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