Lawsuit: XCEL Motor Oil Maker Tricks Consumers into Buying ‘Obsolete,’ Pre-1930s Oil [UPDATE]

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A proposed class action recently transferred to Florida federal court claims Amalie AOC, Ltd. intentionally deceives consumers into buying motor oil that wasn’t meant to be used in automobiles made after 1930. The suit argues that the defendant’s XCEL Premium motor oil has an “SA” rating from the American Petroleum Institute (API), meaning it is considered “obsolete” and shouldn’t be used in engines manufactured after 1930.

The case points out that XCEL motor oil reportedly does not contain any of the additives typically found in engine oil designed for modern vehicles, adding that the oil will actually cause damage to newer engines over time.

“While Defendant’s Product may be suitable to protect cars nearly a century old, it is wholly inadequate and harmful to almost every car currently on the road,” the case attests.

According to the complaint, the defendant knows its product is not fit for use in most vehicles but continues to market the oil to “confused consumers” who “will purchase it due to its low price.” In fact, the suit says, one of the defendant’s executives clearly expressed the company’s marketing strategy in a 2003 interview:

“There’s no question that [XCEL Premium motor oil is] not good for today’s engines. I tell people, ‘It's not going to give your car a heart attack. It’s more like cancer.’ But a lot of people are only concerned with price and they’ll buy that stuff because it’s 30 cents cheaper. And as long as people are going to buy non-detergent oils, and other companies are going to sell them, we feel like we have to compete.”

The case takes particular issue with the defendant’s allegedly deceptive labeling practices, noting the products' front labels assure consumers that the oil is a “premium” product that “[p]rotects like no other” while at the same time failing to disclose its potentially damaging effects. The only indication that XCEL is not to be used in modern vehicles, the lawsuit explains, is a small-print “caution” section located near the bottom of the back label that warns consumers the product is “rated API SA” and “is not suitable for use in most gasoline-powered automotive engines built after 1930.” The lawsuit argues that consumers should not be expected to notice the significantly smaller warning when faced with the defendant’s numerous other contradictory representations.

“Reasonable consumers, including Plaintiff, do not read this fine print — and even if they did, it is ambiguous (particularly when read in conjunction with the rest of the label’s representations), and fails to adequately disclose the dangers of Defendant’s Product,” the case reads.

The lawsuit claims the defendant’s deceptive practices have harmed consumers by causing them to unknowingly spend money on a “worthless” product that could damage their vehicles.