Weinberg v. Sun Company, Inc.

• Decision Date: 10 September 1999
• Citation: 740 A.2d 1152
• Parties: Frederic WEINBERG and Sheilah Guarino on Behalf of Themselves and All Others Similarly Situated, Appellants, v. SUN COMPANY, INC. and Sun Company, Inc. (R & M), Appellee. Marc R. Gordon on Behalf of Himself and All Others Similarly Situated, Appellant, v. Sun Company, Inc., and Sun Company, Inc., (R & M), Appellee.
• Court: Pennsylvania Superior Court

740 A.2d 1152

Frederic WEINBERG and Sheilah Guarino on Behalf of Themselves and All Others Similarly Situated, Appellants, v. SUN COMPANY, INC. and Sun Company, Inc. (R & M),¹ Appellee.

Marc R. Gordon on Behalf of Himself and All Others Similarly Situated, Appellant, v. Sun Company, Inc., and Sun Company, Inc., (R & M), Appellee.

Superior Court of Pennsylvania.

Argued March 2, 1999.

Filed September 10, 1999.

Reargument Denied November 9, 1999.

Debora A. O'Neill, Philadelphia, for appellants.

John Baughman, Philadelphia, for appellee.

Before McEWEN, President Judge, POPOVICH, J., and CIRILLO, President Judge Emeritus. CIRILLO, President Judge Emeritus:

¶ 1 Before us is the trial court's denial of a motion for a class certification under Pennsylvania Rule of Civil Procedure 1702. The underlying action is predicated upon Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. §§ 201-1-201-9.3.² Appellants have proposed a class of gasoline consumers who purchased Sunoco Ultra® 93.5 or 94 octane gasoline ("Ultra") between the years of 1990 and 1992. During this time, the corporate appellee, a Pennsylvania corporation once known as Sun Oil Company (hereinafter "Sun" or "Sunoco"), broadcast in seventeen states³ approximately $14 million dollars' worth of television and radio advertisements for Ultra.® The FTC has found that these ads claimed directly and by implication that Ultra would provide more engine power, acceleration, and performance advantages in automobile engines than mere knock prevention. Appellants claim the ad campaign deceived consumers into thinking they would gain a benefit from using 93.5 or 94 octane gasoline as opposed to a lower octane gasoline, while in truth, all but a small percentage of consumers would derive no advantage at all. They also claim the ads increased both consumer demand for and the price of Ultra. They seek compensatory and punitive damages, as well as the equitable relief of corrective consumer disclosures. Judge Stephen E. Levin of the Philadelphia County Court of Common Pleas denied class certification and issued an opinion as required by Rule of Civil Procedure 1710. We affirm in part, reverse in part, and remand.

¶ 2 The subject advertisements represented, in part, "No other gasoline can give your car better acceleration because no other gasoline has 94 octane," and invited consumers to "[c]ome to Sunoco and fill up with Ultra ® 94—for maximum power and performance." (Emphasis added.) Neither party disputes that Ultra® is the highest octane gasoline available to the general public. Whether higher octane provides such advantages as Sun claims is an entirely different matter. Sun has conceded, in a previous case involving similar ads, that its high octane gasoline does not provide benefits aside from knock prevention in cars that knock at a lower octane. It has also presented evidence in this case that its competitors were airing ads with essentially the same message during the proposed class period.

¶ 3 This dispute has an extensive history. It is not the first time Sun, a company based in the Philadelphia area, has broadcast such ads. Sun has for decades made a point of offering the highest octane gasoline available for sale to the general public, and it has long attempted through advertising to convince consumers that there are widespread advantages to purchasing the highest octane gasoline possible.

¶ 4 This is also not the first time attempts have been made to restrain Sun from making claims identical to those at hand. The Federal Trade Commission (FTC) has attempted to stop Sunoco from making its claims that high octane provides more power at least twice since 1974. See In re Sun Co., note 1 supra; In the Matter of Sun Oil Company, et al, 84 F.T.C. 247 (1974). Its 1992 attempt involved the very same ads as those before us. Additionally, one of the appellants has attempted to take action against Sun for these same ads, claiming standing under the Lanham Act⁴ in our federal courts and producing a landmark case on that Act, and also gaining, then losing, class certification in the state of New Jersey.⁵ We find these prior proceedings instructive and will not ignore them.

¶ 5 The Federal Trade Commission Act⁶ provided the model for the Uniform Deceptive Trade Practices Act (UDTPA), a model statute promulgated by the Council of State Governments in conjunction with the FTC. Commonwealth v. Hush-Tone, 4 Pa. Commw. 1, 20 (1971). This Commonwealth's UTPCPL, 73 P.S. sections 201-1-201-9.3, under which the present action is brought, is based upon the UDTPA and thus also upon the FTC Act. Pennsylvania Retailers' Assos., Reliable, Inc. v. Lazin, 57 Pa.Commw. 232, 426 A.2d 712 (1981). States' enactments of the UDTPA such as our UTPCPL are thus sometimes known as "Baby FTC" statutes. Weston, Maggs, Schechter: Unfair Trade Practices and Consumer Protection 5th Ed. (West 1992) at 727-30. The UTPCPL is also based upon the Lanham Act. See Note 4 supra. In what is still the landmark Pennsylvania case on the UTPCPL, Commonwealth v. Monumental Properties, Inc., 459 Pa. 450, 329 A.2d 812 (1974), our supreme court stated:

The Consumer Protection Law has regularly been interpreted by the Commonwealth Court as being based on the Federal Trade Commission Act and the Lanham Trademark Act. Indeed, in all relevant aspects the language of section 3 of the Consumer Protection Law and section 5 of the FTC Act is identical. The Lanham Act's similarity to the Consumer Protection Law is likewise strong. We thus agree with the Commonwealth Court that "`we may look to the decisions under those Acts for guidance and interpretation.'"

Id. at 461-62, 329 A.2d at 817-18 (footnotes and citations omitted).⁷ Therefore, the federal cases involving the present dispute are relevant. Additionally, although the class in the case at hand has since been decertified by the New Jersey court,⁸ that proceeding is also most certainly instructive as it involved the same litigants and dispute, albeit somewhat different laws.

¶ 6 Thus viewed, the history of this action begins with a consent decree issued by the FTC in 1974. See Sun Oil Company, supra. Sun had between 1969 and 1972 produced and caused to be broadcast televised advertisements very similar to those before us. These ads featured what was at that time the highest octane gasoline available for sale to the general public, a leaded variety with a Research Octane of 102.8 called "Sunoco 260." The ads showed feats of purportedly superior engine strength including an automobile pulling three train cars (two boxcars and a caboose) and an automobile pulling an empty U-haul trailer up a ramp constructed over a bank of seats in the Los Angeles Coliseum. Sun's ads represented directly and by implication that "Sunoco 260" provided more engine power than lower octane gasoline and that using Sunoco's special "blending" pump would allow consumers to enjoy such engine power benefits even if they blended a small amount of "260" with a greater amount of lower octane gasoline. The FTC found both that the ads associated higher octane with greater engine power and performance and that this association was a falsehood. ¶ 7 The 1974 FTC decision against Sun and its New York-based advertising agency which led to a later consent decree was written by Administrative Law Judge (ALJ) Harry R. Hinkes and was adopted by and issued on behalf of the FTC. It included the following findings of fact based on stipulations and/or admissions, which are directly relevant and essential to understanding the present dispute:

Octane, which is measurable in different ways, is a measure of motor fuel anti-knock quality, regardless of the method of measurement. The anti-knock quality is one of many measurable properties of a gasoline.

An octane number or octane rating of a gasoline is a measure of the anti-knock quality of a gasoline or its ability to resist knock during combustion in an engine and an octane number or octane rating of a gasoline can be measured in different ways.

Knock, or as it is sometimes called ping or detonation, is the uncontrolled excessively rapid reaction of a portion or all of the air-fuel mixture in the combustion chamber of the engine.

Knock can also result in a loss of engine power.

The sole function of octane is to control knock. Knock and the possible resultant power loss can be prevented by using any gasoline that has sufficient octane anti-knock quality. Use of a gasoline with an anti-knock quality exceeding the requirements of a particular engine is non[-]advantageous as far as preventing knock is concerned.

Id. at findings of fact (FF) 54, 55 (references to pleadings and quotation marks omitted) (emphasis added).

¶ 8 The FTC's decision also found as fact that Sun's advertising agency made use of "research showing that among adult men octane is considered to be a measure of quality, that Sunoco has the highest octane gasoline on the market, that some users associate Sunoco's highest octane with more power and that many users were confused or ignorant about the concept of octane." Id. at FF 69. No finding indicated, however, what caused these widespread misperceptions and erroneous associations among adult men prior to the subject ads, which had aired between 1969 and 1972.

¶ 9 During the 1974 proceeding, Sun conceded that using a higher octane gasoline than is needed to control engine knock provides no superior engine performance or other advantage. Id. at FF 61, 76.

¶ 10 The FTC found the Sun ads deceptive, stating that "[t]he element of power is not an attribute of the octane rating except insofar as knock is prevented." Id. at Comment (emphasis added). It concluded that "[r]espondents have engaged in unfair methods of competition in commerce and have committed unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act." Id. at Conclusions of Law.

¶11 In fashioning...