In re Motor Fuel Temperature Sales Practices Litig.
| Decision Date | 19 July 2013 |
| Docket Number | N.D. Cal. Case No. 06-7621-PJH,D. Kan. Case No. 07-2405-KHV,D. Kan. Case No. 07-2507-KHV,MDL No. 1840,Case No. 07-1840-KHV,S.D. Cal. Case No. 07-1754-BTM-JMA.,D. Kan. Case No. 07-2300-KHV,C. D. Cal. Case No. 07-1216-GHK-FMO |
| Parties | In re: MOTOR FUEL TEMPERATURE SALES PRACTICES LITIGATION This Document Relates To: Rushing, et al. v. Alon USA, Inc., et al., Lerner, et al. v. Costco Wholesale Corp., et al., Wyatt, et al. v. B.P. Am. Corp., et al. |
| Court | U.S. District Court — District of Kansas |
In these class actions, which are part of larger multidistrict litigation, plaintiffs have sued numerous motor fuel retailers and refiners for selling motor fuel without disclosing or adjusting for temperature, without disclosing that temperature affects the energy content of the fuel they sell and overcharging plaintiffs for motor fuel excise taxes. Plaintiffs claim violations of the California Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., violations of the California Consumers Legal Remedy Act ("CLRA"), Cal. Civ. Code § 1750 et seq., breach of the implied covenant of good faith and fair dealing and unjust enrichment. Three California cases - Rushing v. Alon USA, Inc., D. Kan. Case No. 07-2300-KHV, N.D. Cal. Case No. 06-7621-PJH, Lerner v. Costco Wholesale Corp., D. Kan. Case No. 07-2405-KHV, C.D. Cal. Case No. 07-1216-GHK-FMO, and Wyatt v. B.P. Am. Corp., D. Kan. Case No. 07-2507-KHV, S.D. Cal. Case No. 07-1754-BTM-JMA - are before the Court on Defendants' Joint Notice Of Motion ForSummary Judgment On Plaintiffs' California Unfair Competition Law, Consumer Legal Remedies Act, Florida Deceptive Trade Practices Act And Breach Of Contract (Doc. #2584) filed November 1, 2011 (Rushing), Defendants' Joint Notice Of Motion For Partial Summary Judgment On Plaintiffs' Duty Of Good Faith And Fair Dealing, Unfair Competition Law And Unjust Enrichment Claims (Doc. #2302) filed October 30, 2011 (Lerner), and Defendants' Joint Notice Of Motion For Summary Judgment On Plaintiffs' Unfair Competition Law And Unjust Enrichment Claims (Doc. #2298) filed October 30, 2011 (Wyatt).
The Court has severed plaintiffs' claims against Chevron, certified the claims for class treatment under Rule 23, Fed. R. Civ. P., conformed plaintiffs' claims against Chevron in Rushing, Lerner and Wyatt, and stayed proceedings as to the other non-settling defendants in these cases. Memorandum And Order (Doc. #4575) filed May 6, 2013 at 2-3, 15; Memorandum And Order (Doc. #4539) filed April 5, 2013; Order (Doc. #4535) filed March 27, 2013. It takes up these motions only to the extent that they relate to plaintiffs' claims against Chevron. For the reasons stated below, as to Chevron, the Court sustains the motions for summary judgment.
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Hill v. Allstate Ins. Co., 479 F.3d 735, 740 (10th Cir. 2007); Rosenbaum v. Washoe Cnty., 663 F.3d 1071, 1075 (9th Cir. 2011). A factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Liberty Lobby, 477 U.S. at 248. A "genuine" factual dispute requires more than a mere scintilla ofevidence in support of a party's position. Id. at 252.
The moving party bears the initial burden of showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Nahno-Lopez v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010); In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). Once the moving party meets its burden, the burden shifts to the nonmoving party to demonstrate that genuine issues remain for trial as to those dispositive matters for which it carries the burden of proof. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990); In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). To carry its burden, the nonmoving party may not rest on its pleadings but must instead set forth specific facts supported by competent evidence. Nahno-Lopez, 625 F.3d at 1283; In re Barboza, 545 F.3d at 707.
The Court views the record in the light most favorable to the nonmoving party. Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir. 1991); Scribner v. Worldcom, Inc., 249 F.3d 902, 907 (9th Cir. 2001). It may grant summary judgment if the nonmoving party's evidence is merely colorable or is not significantly probative. Liberty Lobby, 477 U.S. at 250-51. In response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation or on suspicion, and may not escape summary judgment in the mere hope that something will turn up at trial. Conaway v. Smith, 853 F.2d 789, 794 (10th Cir. 1988); Olympic Club v. Those Interested Underwriters at Lloyd's London, 991 F.2d 497, 503 (9th Cir. 1993). The heart of the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Liberty Lobby, 477 U.S. at 251-52.
Both parties' purported statements of fact contain more legal arguments and legal conclusions than actual facts, specifically with respect to the statutory and regulatory framework that governs the sale of motor fuel in California. These are not "facts" for purposes of summary judgment. Sprint Commc'ns Co. v. Vonage Holdings Corp., 500 F. Supp.2d 1290, 1303-04 (D. Kan. 2007) (). In its legal analysis below, the Court addresses the relevant statutes and regulations. The Court disregards any fact that constitutes legal argument, is immaterial or is not properly supported by the record. See Fed. R. Civ. P. 56(c), (e); D. Kan. Rule 56.1; Law v. Nat'l Collegiate Athletic Ass'n, 902 F. Supp. 1394, 1398 (D. Kan. 1995). The following facts are either uncontroverted, deemed admitted or where controverted, viewed in the light most favorable to plaintiffs, the non-movants.
During the relevant time period, each defendant offered to sell motor fuel by the gallon at a posted price per gallon to plaintiffs and putative class members. As a unit, a gallon is defined by California law and the common English dictionary to be 231 cubic inches. See infra Parts. I.A., I.C.; Webster's Third New International Dictionary 931 (1993) (unabridged). A "gross gallon" is a specific volume of motor fuel at any temperature (231 cubic inches with no reference temperature). A "net gallon" is a specific volume of motor fuel at an exact temperature (231 cubic inches at 60 degrees Fahrenheit). Both are liquid measures of volume.
A gallon of motor fuel at a higher temperature has less mass, and thus less energy, than a gallon of the same motor fuel at a cooler temperature. The volume of gasoline expands and contracts one per cent for every change in temperature of 15 degrees Fahrenheit. The volume ofdiesel fuel expands and contracts approximately 0.6 per cent for every change in temperature of 15 degrees Fahrenheit. The parties dispute whether temperature affects the value and quality of motor fuel.
The national standard reference temperature for petroleum products - 60 degrees Fahrenheit - was adopted to remedy inequities in wholesale motor fuel transactions by enabling the buyer and seller to calculate the exact number of net gallons involved in a motor fuel transaction, regardless of the fuel temperature at the time of sale. California has adopted the national standard reference temperature of 60 degrees Fahrenheit for temperature-adjusted motor fuel sales. See Handbook 44, App. D at D-2. Although Chevron sells motor fuel at retail on a gross gallon basis, it accounts for temperature variations in its wholesale and intra-company transfers of motor fuel by dealing in net gallons. It also pays motor fuel excise taxes based on net gallons. Automatic temperature compensation ("ATC") equipment measures fuel in net gallons, i.e. 231 cubic inches at 60 degrees Fahrenheit.
The temperature of motor fuel that Chevron sells at retail in California varies. The average temperature of motor fuel sold in California is warmer than 60 degrees Fahrenheit. The temperature of gasoline in storage tanks in California has averaged 74.7 degrees Fahrenheit. The annual statewide temperature of regular grade gasoline from the dispenser has averaged 71.1 degrees Fahrenheit. Chevron understands that the temperature of motor fuel affects its energy content and therefore fuel mileage, though it emphasizes that temperature is just one of several factors that can affect the energy content of motor fuel. Chevron knows that fuel price and value are important to retail motor fuel consumers. Plaintiffs' expert in social psychology, Steven L. Neuberg, Ph.D., has testified that consumers expect the same amount of energy from each gallon of motor fuel theypurchase and that by selling motor fuel without disclosing or adjusting for temperature, retailers contribute to this expectation. Chevron disagrees.
Chevron sells motor fuel at retail in California without regard to temperature (i.e. by the gross gallon). At retail, it does not use ATC equipment, does not disclose the temperature of the motor fuel it sells and does not disclose the effect of temperature on the energy content of the motor fuel it sells. Although some plaintiffs admit that when they purchased motor fuel, they understood the general principle that liquids expand when warmed, plaintiffs and putative class members...
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