|For Immediate Release
Case # 09-064
October 27, 2010
|Susan Kang Schroeder
Chief of Staff
WARREN UNILUBE TO PAY $650,000 IN CIVIL SETTLEMENT FOR UNFAIR BUSINESS
PRACTICES BY SELLING WRONG GRADE OIL
AND MISLABELING PRODUCTS
SANTA ANA – An Arkansas company, Warren Unilube, Inc. (Warren Unilube), has been ordered to pay $650,000 in a civil settlement today on an unfair business practices case in California by selling wrong grade motor and gear oil and mislabeling various products. The Orange County District Attorney (OCDA), with assistance from the California Department of Food and Agriculture, Division of Measurement Standards (DMS), filed a civil lawsuit to enjoin Warren Unilube from engaging in unfair business practices and false and misleading advertising. The settlement, signed by California Attorney General and the OCDA, requires the defendant to institute a testing program to ensure the quality and labeling of their products are in compliance with California laws, and orders the defendant to pay $500,000 to the County and $150,000 to DMS.
Warren Unilube is a national petroleum and automotive products company that manufactures motor oil, gear oil, brake fluid, and other products under a variety of brand names, including Auto-Zone and Coastal, which are sold in Auto-Zone Auto Parts Stores throughout Orange County and California. The OCDA charged Warren Unilube of committing unfair business practices in the State of California, including in the County of Orange, and brought this consumer protection action on behalf of the People of Orange County. This case was solely based on California law and is directed only at sales and other wrongful conduct occurring in California.
During a random product testing program in 2009, DMS determined that samples of Coastal gear oil were a different grade than what was represented on the bottle label. During a subsequent investigation into other Warren Unilube products, DMS also found a similar violation in Auto-Zone motor oil. California manufacturers of gear oil and motor oil are strictly liable for faulty product they sell to consumers, because using the wrong grade oil can harm an engine. In extreme cases, it can cause an engine to fail. Further investigation into other Warren Unilube products revealed that bottles of gear oil were mislabeled because they did not have a batch number, which is used to trace back tainted product and facilitate recalls if necessary. Thousands of improperly labeled bottles were found with font size of being too small. The investigation did not reveal any evidence of actual harm caused to California consumers by the Warren Unilube violations.
The injunctive terms of the settlement prohibit Warren Unilube from manufacturing and selling petroleum and automotive products which do not meet California and federal law stringent quality and labeling requirements. The defendant is required to implement a testing program that will ensure their motor or gear oil sold in California meets the standards for the grade represented on the label.
The defendant admitted no wrongdoing in the settlement agreement. Warren Unilube was cooperative during the investigation and worked with DMS to comply with California requirements. They voluntarily purchased additional testing equipment to ensure future batches of product are in compliance with California law.
Deputy District Attorney Lesley Young of the Consumer Protection Unit prosecuted this case.