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Phillips 66 ordered to pay Propel Fuels $195 million in

punitive

damages

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Phillips 66 to evaluate legal options after court ruling

By Nicole Jao

NEW YORK, July 31 (Reuters) - U.S. refiner Phillips 66

was ordered to pay biofuel maker Propel Fuels $800

million in damages for stealing trade secrets to build up its

renewable-fuel capabilities, according to a California state

court document.

A state court in Alameda, California, on Wednesday ordered

Phillips 66 to pay $195 million in punitive damages, in addition

to $604.9 million in compensation the refiner was ordered to pay

following a separate verdict.

"In summary, the court finds that Phillips 66's misconduct

was 'reprehensible' from a business perspective. The evidence at

trial reflects that Phillips 66 took advantage of Propel Fuels

by abusing its bargaining power during due diligence," the court

order said.

In October, a jury in the California court decided that

Houston-based Phillips 66 stole trade secrets under the guise of

gathering information for a potential acquisition and then used

that information to create a competing business.

"We received the order and continue to evaluate all our

legal options," a Phillips 66 spokesperson said on Thursday.

Sacramento-based Propel Fuels specializes in low-emissions

gasoline and diesel fuel. According to the legal document,

Phillips 66 approached Propel Fuels in 2017 about acquiring the

company to enhance its renewable fuel business in California.

Phillips 66 abruptly withdrew from the deal in 2018 and began

selling its own renewable fuel in 2019.

Propel Fuels sued the refiner in 2022, accusing Phillips of

unlawfully using trade secrets, including financial data and

business strategies, that the biofuel company had shared during

their talks.

"This is the result of years of perseverance by our client,"

said Michael Ng, lawyer at Kobre & Kim and co-counsel for Propel

Fuels. "It was really important to them that they stand up, not

just for themselves, but for innovators generally."