Weinberg v. Sun Co., Inc.

• Decision Date: 26 July 2001
• Citation: 777 A.2d 442,565 Pa. 612
• Parties: Frederic WEINBERG, Sheilah Guarino and Marc R. Gordon, individually and on behalf of all others similarly situated, Appellees, v. SUN COMPANY, INC. and Sun Company, Inc (R & M), Appellants.
• Court: Pennsylvania Supreme Court

777 A.2d 442

565 Pa. 612

Frederic WEINBERG, Sheilah Guarino and Marc R. Gordon, individually and on behalf of all others similarly situated, Appellees, v. SUN COMPANY, INC. and Sun Company, Inc (R & M), Appellants.

Supreme Court of Pennsylvania.

Argued January 30, 2001.

Decided July 26, 2001.

Nicole Dominique Galli, Jon A. Baughman, Philadelphia, for Sun Company Inc., and Sun Company, Inc. (R&M).

Debora Ann O'Neill, Ann D. White, Jenkingtown, Michael J. Kane, Camp Hill, for Frederic Weinberg and Sheilah Guarino.

Stephen James Harburg, amicus curiae, for Product Liability Advisory Council, Inc.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO and SAYLOR, JJ.

OPINION OF THE COURT

FLAHERTY, Chief Justice.

Appellants in this consumer class action argue that Superior Court misconstrued the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. § 201-1 et seq., and erroneously interpreted and applied the standards for class certification. The trial court denied class certification in a multi-count action brought under the UTPCPL and the common law. Superior Court affirmed in part and reversed in part, holding that the trial court erred in denying class certification as to some of the counts in the complaint.

Appellees Weinberg, Guarino, and Gordon, who were purchasers of Sunoco Ultra® gasoline, filed this consumer class action in the Philadelphia County Court of Common Pleas, challenging Sunoco advertising of Ultra®. They alleged that Sunoco's advertisements induced consumers to purchase Ultra® when their vehicles did not need the high level of octane the gasoline contained. Their complaint requested money damages on their behalf and on behalf of a nationwide class of similarly situated persons, asserting violations of the UTPCPL, the consumer fraud laws of all other states, and the common law. The common law claims alleged fraud, negligent misrepresentation, breach of express warranty, and unjust enrichment.

The trial court held hearings on class certification, receiving evidence as to the existence or absence of common issues of fact and other class certification issues. The court denied class certification, holding that the requirements of numerosity and common questions were not met and that individual questions of fact predominated. The basis of the decision was the court's interpretation that the UTPCPL section permitting a private right of action, 73 P.S. § 201-9.2, requires individual proof of ascertainable loss as a result of any conduct prohibited by the law. The court rejected the proof offered through the testimony of appellees' expert witness, Dr. Latham, who expounded the theory that appellants' false marketing campaign increased the demand for Ultra® gasoline, raising the purchase price for all consumers. The trial court viewed each of the counts of the complaint as sounding in fraud. Under the common law, fraud-based claims require proof of reliance and causation. The court therefore defined the universe of plaintiffs to include only consumers who believed the false message that Ultra® would enhance engine performance and purchased Ultra® for that reason. The court accepted the approach of appellants' expert, Dr. Wind, which would exclude consumers who did not claim to have been deceived by appellants' advertising but purchased the product for other reasons such as brand loyalty, convenience, perception of quality, or as a reflection of social status. Following this approach, the trial court held that the requirement of numerosity was not established, that individual issues predominated, and that the case was not appropriate for disposition as a class action.

Superior Court reversed as to two of the four UTPCPL claims. The court analyzed the nature of the claims and concluded that count five, alleging deceptive marketing of goods and count nine, alleging bait advertising, were essentially claims of false advertising and were not in the nature of common law fraud. Superior Court stated that the trial court's failure to differentiate between fraud and false advertising led to its error in holding that the plaintiffs must show individual reliance and causation. In this analysis, Superior Court followed its precedent of DiLucido v. Terminix Int'l, Inc., 450 Pa.Super. 393, 676 A.2d 1237 (1996). DiLucido distinguished between fraud-based claims and other claims which are specific forms of deceptive advertising cognizable under the UTPCPL, and held that the elements of proof differ in that false advertising claims do not require proof of reliance and causation as fraud-based claims do.

The court held that claims of false advertising under the UTPCPL required that private plaintiffs and class members prove two things: first, the elements of the unfair trade practice at issue for false advertising, that the advertisement was a false representation of fact, that it had a tendency to deceive a substantial segment of the advertising audience, and that it was likely to make a difference in a purchasing decision—and second, that the false advertising caused an ascertainable loss.

This interpretation of the private right of action under the UTPCPL is the central question in this appeal. Appellants argue that the foregoing standard is the one applicable to enforcement actions brought in the public interest by the attorney general or a district attorney in the name of the Commonwealth, not the proper standard for private actions. The essence of the argument is that, while the attorney general may bring an action to restrain advertising which might "have a tendency to deceive a substantial segment" of the public and which is "likely to" influence purchasing decisions, private plaintiffs have no standing to bring actions in the public interest but must prove that they themselves were actually deceived and that the advertising actually influenced their purchasing decisions.

Appellees, on the other hand, argue that Superior Court was correct in reversing the trial court's denial of class certification. They believe that individual plaintiffs need not prove reliance on the false or misleading advertising. They offered proof that the advertising increased the sales of the product, the increased sales drove...