Kurimski v. Shell Oil Co.
| Decision Date | 05 November 2021 |
| Docket Number | CASE NO. 21-80727-CV-MIDDLEBROOKS |
| Citation | 570 F.Supp.3d 1228 |
| Parties | Rebekah KURIMSKI, on behalf of herself and all others similarly situated, Plaintiff, v. SHELL OIL COMPANY and Sun Gas 2100, LLC, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Robert Cordel Gindel, Jr., Boynton Beach, FL, Erin J. Ruben, Pro Hac Vice, Whitfield Bryson LLP, Karl Amelchenko, Pro Hac Vice, Scott Crissman Harris, Milberg Coleman Bryson Phillips Grossman PLLC, Raleigh, NC, for Plaintiff.
J. Trumon Phillips, DLA Piper LLP, Tampa, FL, Austin K. Brown, Pro Hac Vice, DLA Piper LLP, Washington, DC, Isabelle Ord, Pro Hac Vice, DLA Piper LLP, San Francisco, CA, Maia Sevilla-Sharon, DLA Piper LLP, Miami, FL, Timothy Pfenninger, Pro Hac Vice, DLA Piper LLP, Philadelphia, PA, for Defendant Shell Oil Company.
Scott A. Bassman, Matthew Alexander Green, Cole, Scott, Kissane, P.A., Fort Lauderdale, FL, for Defendant Sun Gas 2100 LLC.
ORDER GRANTING MOTION TO DISMISS
THIS CAUSE is before the Court upon Defendant Shell Oil Company's Motion to Dismiss, filed on July 12, 2021 (DE 30), in which Defendant Sun Gas 2100 LLC joins. (DE 45). The Motion is fully briefed (DE 38; DE 43). For reasons set forth below, the Motion is granted.
Plaintiff initiated this putative class action on April 16, 2021 against Shell Oil Company ("Shell") (DE 1) and amended her complaint on June 28, 2021, thereby adding Sun Gas 2100 LLC ("Sun Gas") as a defendant. (DE 26). The central issue in this case is a two-tiered method of gas pricing—called "split pricing"—through which Defendants advertise and sell gas at one price for purchases made with a credit card and a slightly lower price for purchases made with cash. (Id. ¶ 33). Plaintiff alleges that debit card users including herself are deceived by Defendants’ advertising of split pricing into thinking that debit users will pay the lower cash price per gallon, when debit card users are charged the same price as the credit price per gallon. (Id. ¶ 66). The deception allegedly occurs because "when presented with a ‘cash’ price and a ‘credit’ price, reasonable consumers will invariably expect to pay Shell's advertised ‘cash’ price rather than the ‘credit’ price because a debit card is not a credit card" and "consumers consider a debit card to be a form of cash, not a credit card." (Id. ¶¶ 69, 99).
Shell operates a network of gas stations at least some of which are independently owned and operated. (Id. ¶ 3). Sun Gas is a Shell "Dealer," an independently owned and operated Shell-branded station. (Id. ¶¶ 21, 31). Plaintiff asserts that split-pricing is a "corporate level decision" set by Shell and carried out by its Dealers. (Id. ¶ 97). Dealers allegedly enter into agreements with Shell that afford Shell some degree of control over certain aspects of the business. (See id. ¶¶ 27–30). For example, Plaintiff alleges that Dealers must use Shell's payment processing system and Shell processes credit and debit card sales and charges Dealers "a processing fee." (Id. ¶¶ 28–29). Plaintiff also alleges that Shell maintains direct control over the design of split pricing advertising and is responsible for the "disclosures consumers receive." (Id. ¶¶ 97, 103). Additionally, Shell allegedly provides and/or approves Shell-branded equipment and materials used by Dealers, and Shell provides "franchising-type support" in areas such as marketing. (Id. ¶¶ 25–26).
Plaintiff alleges that Shell benefits financially from split pricing in several ways. Shell allegedly either charges royalties or pays commissions, through which "Shell always benefits from increased consumer sales o[f] gasoline." (Id. ¶ 30). Shell also allegedly receives a "payment processing fee" for every debit transaction processed and processes debit cards like credit cards. (Id. ¶¶ 39, 92). Further, holders of Shell's credit card receive a $0.10 discount on gas, making the price more gallon "equivalent" to the cash price, which Plaintiff alleges adds to the appeal of the Shell credit cards. (Id. ¶¶ 37–38).
Reasonable consumers are allegedly deceived by split pricing advertising because debit users "consider a debit card to be a form of cash, not a credit card." (Id. ¶ 99). Debit cards, akin to an "electronic check," are "a convenient alternative to cash." (Id. ¶¶ 41, 43). Plaintiff purports that a 2019 survey of 1,600 individuals by "GasBuddy.com" found that 51% of the 1,600 respondents used debit cards as their preferred method of purchasing gas, "[a] significant number" of whom preferred debit "because they receive a discount off the credit card price on gasoline." (Id. ¶¶ 48–49). Plaintiff alleges that debit card transactions comprise more than half of all transactions at Shell-branded Florida gas stations. (Id. ¶ 95).
Shell's split pricing is advertised in several ways. Some if not all Shell stations utilizing split pricing advertise the split prices at the pump. (See id. ¶ 65 (); see id. ¶ 92 ()). Many stations additionally advertise the split prices on large exterior signs at the entrance of the station. (Id. ¶ 65). Further, the "point of sale" ("POS") system at the pumps used by all Shell Dealers "indicate[ ] the type of fuel available and their respective prices." (Id. ¶ 63). Plaintiff describes the consumers deceived by the alleged deceptive marketing of split pricing as "cost-conscious" ones. (Id. ¶ 34). Due to the "ultra-competitive" nature of the gas market, prices per gallon at competing stations may vary by a mere cents, and "a price difference of just a few cents can drive motorists from one dealer to another." (Id. ¶ 96).
Upon deciding to purchase gas from a Shell-branded station, consumers have several payment options: credit (which includes two Shell-branded credit cards), debit cards, "pre-paid debit cards (i.e., Visa prepaid cards)," gift cards, and cash. (Id. ¶¶ 35, 64). Consumers paying with credit, debit, and gift cards can purchase gas from the POS system at the pump; consumers paying with cash must pre-pay with a cashier inside the station, "as the POS cannot process paper currency." (Id. ¶ 65). When debit users purchase gas at the pump using the POS, they "look first to the card reader, which instructs them to insert their card and then guides the consumer through the steps to authorize payment." (Id. ¶ 104). Then, the POS system, which "indicates the type of fuel available and their respective prices," (id. ¶ 62), prompts the entry of a PIN number to authorize the transaction. (Id. ¶ 105). "After the POS device instructs the cardholder to begin fueling, a small digital screen displays a price labeled only as ‘price per gallon.’ " (Id. ¶ 107).
According to Plaintiff, "[a] reasonable consumer would not expect the price at the pump to be different from the price advertised on Shell's other signage, so there would be no reason to pay close attention to the pump's pricing." (Id. ¶ 108). And because the price difference may amount to just ten cents per gallon, "reasonable consumers are unlikely to realize that the price displayed on the fuel pump and/or on their sales receipt is anything other than the ‘cash’ price they expected to pay" and "would be unlikely to notice the discrepancy when dispensing their gas." (Id. ¶¶ 67, 109). Plaintiff further alleges that the only method by which a consumer could detect "any difference in pricing" is to "leave the fuel dispenser island and investigate the pricing on the street signs or go into the store." (Id. ¶ 110). "The first and only time that Shell discloses its higher charge is on the sales receipt after the sale is completed," if a receipt is requested by the consumer. (Id. ¶ 112). As a result of this allegedly deceptive practice, Defendants "collect unauthorized debit card surcharges" and "inflated debit card processing fees." (Id. ¶¶ 61, 76).
Plaintiff regularly purchases gasoline from Shell-branded dealers that advertise split pricing in Florida. (Id. ¶ 118). Plaintiff considers debit cards to be a form of cash "[b]ased on the fundamental differences between a debit card and a credit card." (Id. ¶ 119). On or about February 5, 2021, Plaintiff used a debit card to purchase gas at a station owned and operated by Sun Gas in Delray Beach, Florida. (Id. ¶ 121). "Plaintiff had no reason to take notice of the ‘price per gallon’ displayed on the fuel dispenser." (Id. ¶ 125). Upon requesting and reviewing her receipt after the sale, Plaintiff "was surprised to learn that she had been charged the credit price rather than the advertised cash price that she expected to pay." (Id. ¶ 126). On several other unspecified occasions, Plaintiff alleges to have purchased gas from Shell-branded stations using her debit card and that she "was consistently charged the higher credit price when making those purchases." (Id. ¶ 127). As a holder of both a debit and a credit card, Plaintiff states that she could have either purchased gas with her credit card, thereby accruing points and deferring payment, or paid with cash. (Id. ¶ 128). Alternatively, Plaintiff could have bought gas at non-Shell gas stations that do not offer split pricing. (Id. ¶ 129).
Plaintiff alleges that both Defendants "created, designed, reviewed and approved the deceptive advertising," and did so deliberately to deceive consumers and "with actual knowledge" that split pricing advertisement is deceptive. (Id. ¶¶ 74–76). While both Defendants allegedly "design the appearance of the signage," only Shell "retains the sole discretion to dictate and change the number, type, and location of the signage[s] installed" at the Dealer-owned stations. (Id. ¶¶ 75, 79). The signs are allegedly owned by Shell. (Id. ¶ 80). Shell allegedly "refuses to disclose,...
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