Propel Fuels’ trade secret misappropriation case against Phillips 66 scheduled for trial Aug. 26

Propel Fuels Inc., a leading retailer of low-carbon fuels at stations throughout California, shared July 29 that its trade secret misappropriation case against Phillips 66 has been scheduled for jury trial Aug. 26 in the Superior Court of California, County of Alameda, located in Oakland, California.

The lawsuit, filed Feb. 16, 2022, alleges that Philips 66 stole confidential data, proprietary strategies and business intelligence developed by Propel over 13 years at a cost to Propel of more than $200 million.

Founded in 2004, Propel was an early pioneer in the sale of low-carbon renewable fuels, including E85, a cleaner-energy solution for use in flex-fuel vehicles.

In 2015, Propel was the first in the market to retail high-blend renewable diesel, which Propel sells under its HPR™ brand.

Renewable diesel is a cleaner diesel fuel produced from lower carbon-intensity feedstocks.

Propel’s HPR (R99) was the first high-blend renewable diesel targeted to consumers in the California market.

According to court filings, Propel and Phillips 66 entered into due diligence in 2017 in connection with a proposed acquisition of Propel by Phillips 66.

Phillips 66 extended the due-diligence process over eleven months, during which Propel, under a nondisclosure agreement, disclosed its proprietary strategies and data, and was actively building a new integrated renewable fuels business for Phillips 66, when Phillips 66 abruptly and without explanation terminated the deal Aug. 24, 2018, according to Propel.

The next business day, Phillips 66 announced to California regulators that it would enter the E85 market in the state and launched retail sales of high-blend renewable diesel weeks later, Propel stated.

“Phillips 66 rapidly expanded its California renewables business using Propel’s data and market insights,” Propel stated.

Phillips 66 now retails E85 or renewable diesel at more than 600 stations in the state.

In 2021, Phillips 66’s former chair and CEO predicted its California renewable business would generate billions in annual profits, and its current CEO Mark Lashier has touted to investors the “high return, low capital” nature of the company’s “incredibly successful” renewable fuels retail strategy.

Propel’s lawsuit alleges the Phillips 66 business was developed from its trade secrets in violation of California’s Uniform Trade Secrets Act.

On July 17, Superior Court Judge Michael Markman denied Phillips 66’s summary adjudication motions seeking to dispose of the case and avoid trial.

After more than two years of discovery and pretrial proceedings, the case is scheduled for a pretrial conference Aug. 9 and a jury trial commencing Aug. 26.

According to court filings, Propel seeks compensatory damages of nearly $1 billion, which may be tripled (trebled) under CUTSA, and an injunction precluding Phillips 66 from continued use of any business or strategies developed from its trade secrets.