Customers' class action suit against Peterson Oil certified by superior court — company attorney denies allegations, plans to appeal

WORCESTER — A lawsuit filed by several customers against Peterson Oil Service Inc. of Worcester, that accuses the company of knowingly delivering the wrong mix of heating oil, was certified earlier this month as a class action lawsuit by a Worcester Superior Court judge.

In the lawsuit, customers allege that the company’s practices have affected more than 15,000 customers.

First filed in 2019, the lawsuit filed by nine customers accuses Peterson Oil, Howard Peterson Jr., Sharon Peterson and Kristen Peterson Halus, of promising ordinary heating oil and instead selling them fuel diluted with large quantities of biodiesel, a type of fuel that is derived from plants and animals as a clean-energy alternative to regular fuel.

The customers also allege that they had to buy more of it to generate the same amount of heat that normal heating oil would provide, and that the fuel caused heating equipment “to shut down” and damaged their heating systems.

The lawsuit was expanded Dec. 9 after the customers alleged that Peterson Oil’s practices impacted thousands of customers, likely over 15,000, which they allege is about 90% of the customers that Peterson Oil has serviced since 2012, when they first allegedly began using diluted biodiesel.

In a Wednesday interview with the Telegram & Gazette, Peterson Oil’s attorney Louis M. Ciavarra said that the company plans on appealing the court’s decision of certifying the lawsuit as a class action, as opposed to customers filing individual lawsuits.

“We're confident that when this case goes to trial, the jury will conclude that biodiesel is industry standard, is encouraged by state and federal government, and is a clean, safe and efficient alternative to petroleum,” said Ciavarra. “If in fact, any individual homeowner was injured, which we do not believe is the case, then everybody's claim is unique.

"The decision by the court to certify was incorrect."

Regarding the allegation about the number of affected customers being in the thousands, Ciavarra said that, “Peterson Oil hasn't received even a minuscule percentage of that number of complaints from homeowners relating to biofuel.”

In March 2021, Peterson Oil agreed to pay $450,000 after it was fined by the state based on allegations by the office of Attorney General Maura T. Healey that the company had knowingly delivered the wrong mix of heating oil to state agencies.

Healey stated that the noncompliant fuel created mechanical problems with heating systems at agencies serviced by Peterson Oil, and that the company did not meet conditions of state contracts, a violation of the Massachusetts False Claims Act.

Peterson Oil had delivered fuel that contained 40% or more biodiesel by volume, while the contracts called for fuel containing no more biodiesel by volume than 5%, according to Healey’s statement.

A month later, the Better Business Bureau revoked the accreditations of the company and another company it runs, Cleghorn Oil, citing recent allegations of improper fuel deliveries the business settled in court.

In an interview following the decision, Peterson Oil President Howard W. Peterson Jr. denied that biodiesel caused the problems and said he planned to ask the Better Business Bureau to reconsider its decision.

Both businesses remain unaccredited, according to the Better Business Bureau’s website.

“We have taken the use of renewable biodiesel on. We feel it’s better for the environment,” Peterson said at the time, adding that his maintenance records show the same levels of service for customers using bioheat as opposed to traditional heating oil.

This article originally appeared on Telegram & Gazette: Peterson Oil lawsuit certified as class action