Anzai v. Chevron Corp.

• Decision Date: 28 September 2001
• Docket Number: No. 98-00792 SPK/KSC.,98-00792 SPK/KSC.
• Citation: 168 F.Supp.2d 1180
• Parties: Earl I. ANZAI, Attorney General for the State of Hawaii, As Parens Patriae for the Natural Persons Residing in Hawaii, and on behalf of the State of Hawaii, its Political Subdivisions and Governmental Agencies, Plaintiff, v. CHEVRON CORPORATION, et al., Defendants.
• Court: Hawaii Supreme Court

Page 1180

168 F.Supp.2d 1180

Earl I. ANZAI, Attorney General for the State of Hawaii, As Parens Patriae for the Natural Persons Residing in Hawaii, and on behalf of the State of Hawaii, its Political Subdivisions and Governmental Agencies, Plaintiff, v. CHEVRON CORPORATION, et al., Defendants.

No. 98-00792 SPK/KSC.

United States District Court, D. Hawai`i.

September 28, 2001.

L. Richard DeRobertis, Jeffrey T. Ono, Howard G. McPherson, Galiher DeRobertis Nakamura Ono Takitani, Honolulu, HI, Spencer Hosie, George Frost, Hosie Frost & Large, San Francisco, CA, Earl Anzai, Jack Rosenzwieg, Dept. of Atty. Gen., Honolulu, HI, for Earl A. Anzai.

Lisa Woods Munger, Ellen Cirangle Goodsill Anderson Quinn & Stifel, Honolulu, HI, Robert Middelstaedt, Caroline Mitchell, Pillbury Winthrop LLP, San Francisco, CA, for Chevron Corp., Chevron USA, Inc.

Mark Bennett, McCorrison Miller Mukai MacKinnon LLP, Honolulu, HI, Alan Grimaldi, Charles Engel, III, Washington, DC, Dale J. Giali, Los Angeles, CA, for Texaco Inc., Texaco Refining and Marketing, Inc.

Dale Lee, Kobayasji Sugita & Goda, Honolulu, HI, Bradley Phillips, William Temko, Stuart Senator, Andrew Finch, Munger Tolles & Olson, LLP, Los Angeles, CA, for Shell Oil Co., Shell Oil Products Co.

Gary Grimmer, Carlsmith Ball, Honolulu, HI, Harold Collins, Blecher & Collins, P.C., Los Angeles, CA, virginia Grogan, Douglas McCormick, Latham & Watkins, Costa Mesa, CA, for Tosco Corp.

John Myrdal, Stanton Clay Chapman Crumpton & Iwamura, Honolulu, HI, Ernest I. Reveal, Robins Kaplan Miller & Ciresi, Cost Mesa, CA, for Union Oil Co. of California, Unocal Corp.

ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

SAMUEL P. KING, District Judge.

INTRODUCTION

Plaintiff Earl Anzai, as Parens Patriae for the Natural Persons Residing in Hawaii and on behalf of the State of Hawaii ("the State"), moves for partial summary judgment seeking an interpretation of Haw.Rev.Stat. § 480-24(a), which provides:

(a) Any action to enforce a cause of action arising under this chapter shall be barred unless commenced within four years after the cause of action accrues, except as otherwise provided in subsection (b) and section 480-22. For the purposes of this section, a cause of action for a continuing violation is deemed to accrue at any time during the period of the violation. (emphasis added)

Specifically, the State asks this Court to find as a matter of law that, if it establishes a "continuing violation," it would be entitled to seek provable damages under the State unfair competition statute, Haw. Rev.Stat. § 480-2, caused by that continuing violation occurring before October 1, 1994 (i.e., more than four years before commencement of this action.) For the reasons set forth to follow, the Court GRANTS the State's Motion for Partial Summary Judgment.

BACKGROUND

This antitrust suit was filed on October 1, 1998.¹ The State basically asserts that Defendants, through a series of illegal agreements, conspired to allocate retail gasoline market shares in Hawaii so as to fix retail gasoline prices at uncompetitive levels. The State alleges that this past and ongoing behavior violates federal and state law. It seeks, among other things, (1) damages under federal antitrust statutes, and Chapter 480 of the Hawaii Revised Statutes, and (2) an injunction prohibiting future price-fixing.

Because the antitrust conspiracy has allegedly been in existence since or before 1989, and because the State officially investigated some or all of the Defendants in 1989 and 1994, the four-year statute of limitations set forth in 8 U.S.C. § 15b has played an important role in the litigation. Under the federal claims, if a "continuing violation" theory applies, the Court would likely apply the rule as stated in Klehr v. A.O. Smith Corporation, 521 U.S. 179, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997):

... in a case of a "continuing violation," say a price fixing conspiracy that brings about a series of unlawfully high priced sales over a period of years, "each overt act that is part of the violation and that injures the plaintiff," e.g., each sale to the plaintiff, "starts the statutory period running again, regardless of the plaintiff's knowledge of the alleged illegality at much earlier times." ... But the commission of a separate new overt act generally does not permit the plaintiff to recover for the injury caused by old overt acts outside the limitations period.

Id. at 189-90, 117 S.Ct. 1984 (citations omitted) (emphasis added).

Under Klehr — absent some sort of tolling, fraudulent concealment or estoppel — there apparently can be no recovery under federal law for damages over four years old (i.e., over four years prior to the State's filing suit). If Haw.Rev.Stat. § 480-24(a) allows recovery of such damages for similar violations of state law, it would be inconsistent with Klehr and its interpretation of federal law. Notably, chapter 480 is broader in some material aspects than the federal antitrust statutes. See, (e.g., Robert's Waikiki U-Drive, Inc. v. Budget Rent-A-Car Systems, Inc., 491 F.Supp. 1199, 1226 (D.Haw.1980)). In short, the State could ultimately benefit if section 480-24(a) has a different interpretation from similar provisions, if any, of federal law. Likewise, the Defendants could ultimately benefit if it were interpreted consistently with federal law.

DISCUSSION

I.

Initially, the Defendants argue that the State's motion is procedurally improper. They contend that the State raises a purely legal question on hypothetical damages and a ruling would be akin to an advisory opinion. See Kendall McGaw Laboratories, Inc. v. Community Memorial Hosp., 125 F.R.D. 420, 422 (D.N.J.1989) (denying summary judgment that sought "a legal `what if' pronouncement of the appropriate standard by which [damage] calculations may, or may not, be made at some future date"). But surely this is not a purely hypothetical disagreement about the meaning of section 480-24(a). The Defendants have affirmatively pled a defense of a statute of limitations bar. Much of the pre-trial proceedings have focused on the State's knowledge of, and due diligence in pursuing, its causes of action. The fraudulent concealment issues have consumed much effort. Even if the statute of limitations is not before the Court with this motion, the issue whether the section 480-2 claims are not barred by statute of limitations is very real. It is necessary in facing statute of limitations issues to consider the effect section 480-24(a) has on the section 480-2 claims, including whether section 480-24(a) would permit damages for a continuing violation which allegedly began prior to October 1994 and allegedly continued into the applicable four-year period.

Moreover, the factual context is not hypothetical. The legal issue is considered in context of the fraudulent concealment allegations and proceedings. From the operative complaint's allegations, as well as the past discovery orders and appeals, the Court may assume, for purposes of this motion only (1) that there is or was a continuing violation, (2) that it continued into the applicable period (i.e., after October 1, 1994), and (3) that the State could have brought suit earlier (i.e., before October 1, 1994). Even if the Court had before it conflicting evidence of these issues, any dispute as to the State's knowledge would be taken in favor of the Defendants. That is, the Court can assume for present purposes only (and without considering other possible defenses), that the damages are otherwise barred. The legal question then is whether Haw.Rev.Stat. § 480-24(a) allows damages for a continuing violation prior to October 1, 1994.

As this Court stated in Disandro v. Makahuena Corp., 588 F.Supp. 889, 892 (D.Haw.1984), "[s]ummary judgment is available to decide [certain] purely legal issues." In Disandro, the Court decided a purely legal issue of the meaning of a statute, stating "[s]ummary Judgment can thus serve to set the issues for trial." Id. The Court's decision reasoned, "[t]his court now has before it parties who maintain conflicting and antagonistic positions on the meaning of a statute. The outcome of the dispute will have an immediate impact on the proofs to be offered at trial in support of the elements of the statutory causes of action." Id.

This case, like Disandro, involves parties with fundamentally different interpretations of a statute. Like Disandro, the ruling may "have an immediate impact on the proofs to be offered at trial." Id. Like Disandro, then, this is a proper motion even if the ruling will not entirely dispose of any one claim. The Court is squarely presented with a legal issue applicable to a very real factual situation. The motion is procedurally proper.

II.

Again, the language of Haw.Rev. Stat. § 480-24 at issue is:

(a) Any action to enforce a cause of action arising under this chapter shall be barred unless commenced within four years after the cause of action accrues, except as otherwise provided in subsection (b) and section 480-22. For the purposes of this section, a cause of action for a continuing violation is deemed to accrue at any time during the period of the violation. (emphasis added)

At times, the Court in this order will refer to the emphasized phrase as "the key language." The State argues that the key language plainly allows recovery for damages occurring before October 1, 1994, if in fact there is a continuing violation. The Court agrees that the language plainly appears to permit recovery for the entire period of a continuing conspiracy. If a cause of action accrues "at any time during a period of a violation" which continues over a single period, the damages would also all accrue during that period. The Defendants, however, point out that the "plain" language of the statute deals only with accrual; the statute says nothing about damages.

Hawaii adopted section 480-24(a) in 1961. See Act 190, 1961 Haw.Sess.Laws 313; See generally,...