Hill v. Shell Oil Co.

• Decision Date: 29 October 1999
• Docket Number: No. 98 C 5766.,98 C 5766.
• Citation: 78 F.Supp.2d 764
• Parties: Daron HILL, Tyson Parks, Christopher M. Lawson, and Carlton Reives, on behalf of themselves and others similarly situated, Plaintiffs, v. SHELL OIL COMPANY and Equilon Enterprises, LLC; Shahid Hasan, individually and d/b/a Ashland and Diversey Shell; Beyer Enterprises, Inc., d/b/a Ridge Devon Shell; Clark Devon Shell, Inc.; Mohammed Anjad Umer, individually and d/b/a Peterson Western Shell; John Zyung, individually and d/b/a Roselle Shell; and Gio, Inc. d/b/a Westchester Shell and Car Wash, on behalf of themselves and others similarly situated, Defendants.
• Court: U.S. District Court — Northern District of Illinois

78 F.Supp.2d 764

Daron HILL, Tyson Parks, Christopher M. Lawson, and Carlton Reives, on behalf of themselves and others similarly situated, Plaintiffs, v. SHELL OIL COMPANY and Equilon Enterprises, LLC; Shahid Hasan, individually and d/b/a Ashland and Diversey Shell; Beyer Enterprises, Inc., d/b/a Ridge Devon Shell; Clark Devon Shell, Inc.; Mohammed Anjad Umer, individually and d/b/a Peterson Western Shell; John Zyung, individually and d/b/a Roselle Shell; and Gio, Inc. d/b/a Westchester Shell and Car Wash, on behalf of themselves and others similarly situated, Defendants.

No. 98 C 5766.

United States District Court, N.D. Illinois, Eastern Division.

October 29, 1999.

COPYRIGHT MATERIAL OMITTED

Thomas R. Meites, Michael M. Mulder, Paul William Mollica, Meites, Mulder, Burger & Mollica, Chicago, IL, for plaintiffs.

Steven Francis Molo, Gerald C. Peterson, Norman K. Beck, Winston & Strawn, Chicago, IL, Manuel Sanchez, John Scott Huntley, Daniel Thomas Grosso, Sanchez & Daniels, Chicago, IL, George B. Collins, Christopher Robert Bargione, Adrian M. Vuckovich, Collins & Bargione, Chicago, IL, Joseph Michael Gagliardo, Gregory Robert James, Jr., Clifford Raymond Perry, III, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Ltd., Chicago, IL, Robert Joseph Meyer, Sheryl A. Pethers, Debrai G. Haile, Swanson, Martin & Bell, Chicago, IL, Cary S. Fleischer, Alan R. Dolinko, Jeralyn Hartwick Baran, Chuhak & Tecson, Chicago, IL, Brett G. Rawitz, Josh Michael Friedman, Bates, Meckler Bulger & Tilson, Chicago, IL, for defendants.

MEMORANDUM AND ORDER

MORAN, Senior District Judge.

Plaintiffs bring this lawsuit as a purported class action on behalf of all African-American customers of Shell-brand gas stations. They allege that, in Chicagoland and across the nation, Shell-brand gas stations require African-Americans to prepay for gasoline while allowing white customers to pay after pumping gas. Plaintiffs claim that this pattern or practice of racial discrimination violates their federally-protected civil rights. Defendants move to dismiss the complaint on a variety of grounds. For the reasons set forth below, defendants' motions are granted in part and denied in part.

BACKGROUND

I. Factual Background

Daron Hill ("Hill"), Tyson Parks ("Parks"), and Christopher M. Lawson ("Lawson") (collectively "plaintiffs") are African-American customers of Shell-brand gasoline.¹ Most Shell-brand gas stations are equipped with gas pumps that can be turned on or off from a console inside the service station. Customers can be viewed by the operator of the station through a window or video camera. Plaintiffs allege that they were required to pay in advance for gasoline before the operator of the station would turn on the pump ("pre-pay"). White customers arriving within minutes of such incidents, however, were allowed to pump their gas first and then pay ("post-pay"). Plaintiffs claim that this racially discriminatory treatment violated their rights under 42 U.S.C. §§ 1981, 1982, and 2000a.

Defendant Shell Oil Company ("Shell") is a Delaware corporation doing business in this district. Until 1998, Shell owned approximately 8,500 gas stations located throughout the United States. On or after January 1, 1998, Shell transferred ownership of the approximately 8,500 stations and related assets to defendant Equilon Enterprises, LLC ("Equilon"). Approximately 10 percent of the stations are owned and operated directly by Shell or Equilon ("corporate stations"). The remaining 90 percent of the stations are owned by Shell or Equilon but operated by individual contract dealers ("dealer stations"). The dealer stations operate under a dealer agreement ("agreement") with-Shell and Equilon, and lease the stations from Shell and Equilon under a "Motor Fuel Station Lease" ("lease"). The Agreement requires dealer stations to maintain corporate standards in the operation of Shell-brand stations (agrmt, ¶ 2). The agreement and the lease also provide for termination by Shell or Equilon if a dealer station knowingly fails "to comply with federal, state or local laws or regulations relevant to the operation of [the station]" (agrmt, ¶ 18.1(c)(11); lease, ¶ 10.1(c)(10)).

Plaintiffs allege that they were subject to discrimination at both corporate and dealer stations. Specifically, the complaint details a total of twelve pre-pay incidents at two corporate and six dealer stations across Chicagoland.² It also describes incidents at five other stations located in metropolitan areas outside Illinois. With respect to the incidents occurring in Illinois, plaintiff Hill was required to pre-pay on September 21, 1997, at a Shell corporate station in Skokie. He was also required to pre-pay at the following dealer stations on the following dates: Ashland Diversey Shell on February 6, 8, and 10, and August 3, 1997; Peterson Western Shell on August 3 and September 7, 1997; Ridge Devon Shell on August 3, 1997; Irving Sheridan Shell on September 7, 1997; and Clark Devon Shell on September 21, 1997. Plaintiff Lawson was required to pre-pay on January 10, 1998, at an Equilon-operated station in Lombard. Plaintiff Parks was required to pre-pay on June 7, 1998, at Roselle Shell.³

Based on these Illinois incidents, plaintiffs name as defendants in this lawsuit Shell, Equilon and the six dealer stations identified above. Unless otherwise noted, we shall refer to the six dealer stations collectively as "dealer defendants," and individually as Ashland Diversey Shell, Irving Sheridan Shell, Ridge Devon Shell, Clark Devon Shell, Peterson Western Shell, and Roselle Shell.

II. History of Proceedings

Plaintiffs have made numerous submissions to the Illinois Department of Human Rights ("IDHR") complaining of these discriminatory pre-pay incidents. As we will discuss below, the substance and chronology of these filings are important. On February 24, 1998, plaintiff Hill filed a charge with the IDHR against Shell for the September 21, 1997 pre-pay incident at the corporate station in Skokie. In that submission to the IDHR, Hill also described the pre-pay incidents he suffered at the five dealer stations with which he had dealings. Shell responded to the charge on April 15, 1998. On June 11, 1998, plaintiff Parks filed an IDHR charge against Roselle Shell based on the pre-pay incident he suffered there on June 7, 1998. On August 18, 1998, Hill filed amended charges, identifying with more specificity the five dealer stations that required him to pre-pay for gas. On September 16, 1998, plaintiff Hill withdrew his IDHR charges and filed a complaint, naming Shell and five dealer stations as defendants. On September 23, 1998, Hill filed the first amended complaint, which added Parks as a plaintiff and Equilon and Roselle Shell as defendants.

Plaintiffs filed a new round of IDHR charges on December 10, 1998. In addition to the charges of Hill and Parks against Shell and the six dealer defendants, Lawson filed charges against Equilon for the January 10, 1998 pre-pay incident he suffered at the corporate station in Lombard. The December 10, 1998, filings were formal IDHR charges, naming as respondents each of the eight defendants. In a letter to plaintiffs' counsel dated December 28, 1998, an IDHR investigator informed plaintiffs that their charges were filed more than 180 days after the alleged incidents and therefore were untimely under Illinois law. On January 27, 1999, plaintiffs filed the second amended complaint ("complaint") against Shell, Equilon and the six dealer defendants.

In the complaint, plaintiffs purport to bring a bilateral class action on behalf of "all African-American persons who have purchased gas at or will in the future seek to purchase gas from Shell and Equilon corporate locations or contract dealers" (cplt, ¶ 13) They name Shell, Equilon and the six dealer stations as defendants, along with a defendant class consisting of "all Shell and Equilon contract dealers operating under Shell and Equilon's Lease and Dealer Agreement" (cplt, ¶ 18). Plaintiffs raise two counts in their complaint, both based on the same discriminatory pre-pay incidents. Count I is brought under Sections 1981 and 1982 of the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991. 42 U.S.C. §§ 1981 and 1982. Count II is brought under Title II of the Civil Rights Act of 1964. 42 U.S.C. § 2000a. Plaintiffs allege that defendants have maintained a pattern or practice of requiring African-American customers, but not white customers, to pre-pay for gas purchases. Plaintiffs allege that Shell and Equilon are liable for the misconduct of their corporate stations, and of the dealer stations, over whom they have actual or apparent authority. Plaintiffs seek monetary damages, injunctive relief, attorneys' fees, and a declaration against defendants establishing that Shell and Equilon have the power under the agreement and the lease to terminate any dealer station discovered to have violated federal civil rights laws against members of the plaintiff class.

All eight defendants have moved to dismiss the complaint. Defendants primarily argue that 1) Count II should be dismissed because plaintiffs have failed to satisfy the jurisdictional prerequisites of Title II, and 2) both counts should be dismissed for failure to state a claim. In addition, various defendants advance a number of other grounds for full or partial dismissal, including arguments of vicarious liability, mootness, standing, and misjoinder. As discussed below, the motions to dismiss are granted in part and denied in part.

DISCUSSION

I. Subject Matter Jurisdiction Over Title II Claim

Defendants move to dismiss plaintiffs' Title II claims under Rule 12(b)(1) for lack of subject matter jurisdiction. Where a Rule 12(b)(1) motion challenges the sufficiency of the allegations of subject matter jurisdiction, the court must accept as true all well-pleaded factual allegations and construe them favorably to the pleader. Rueth v. EPA,...