Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. Kan.: Non-settling retailers in ongoing motor fuel sales practices action granted summary judgment on California claims, (Aug 15, 2013)

By Jody Coultas, J.D.

The federal district court in Kansas City, Kansas, has sustained motions for summary judgment filed by motor fuel sellers on certified California consumer protection law claims filed by motor fuel purchasers and declined to require the purchasers to provide class notice (In re: Motor Fuel Temperature Sales Practices Litigation, August 14, 2013, Vratil, K.). The court noted its intention to suggest that the Judicial Panel on Multidistrict Litigation remand the California claims against non-settling sellers to their respective transferor courts with instructions to enter judgment consistent with the court’s summary judgment orders.

The California purchasers alleged that the retailers’ practice of selling motor fuel for a specified price per gallon without disclosing or adjusting for temperature, and without disclosing the effect of temperature on motor fuel, violated the California Unfair Competition Law (UCL) and Consumers Legal Remedies Act.

In a previous order, the court sustained Chevron USA, Inc.’s motions for summary judgment on the purchasers’ four certified claims. The court also ordered the parties to show cause whether and to what extent the summary judgment order could be applied to claims against the remaining non-settling defendants.

The court declined to require the purchasers to give class notice regarding their claims against non-settling defendants in the California classes because giving class notice now would circumvent the purpose of Federal Rule of Civil Procedure 23(c)(2). Chevron argued that before the court enters judgment in its favor in the California cases, it should order the purchasers to give the classes notice and an opportunity to opt out. The remaining non-settling defendants asserted that the court should order plaintiffs to provide notice which informs the class of the summary judgment ruling and its possible effect on the plaintiffs’ claims against them. When a defendant moves for and obtains summary judgment before a class has been properly certified and notified, it effectively waives the right to have notice circulated under Rule 23(c)(2). Therefore, the retailers were precluded from compelling the purchasers to provide class notice in the California cases. Chevron’s assertions that it filed summary judgment motions with an “understanding” that the court would remand them to the transferor courts for adjudication was not supported by the circumstances. Chevron knew that the court planned to rule on all dispositive motions in the California cases. The same reasoning applied to the other non-settling retailers.

As to the remaining non-settling defendants, the court sustained in part the retailers’ motions for summary judgment on the UCL and CLRA claims.

The case is MDL No. 1840.

Attorneys: Christie R. Deaton (Korein Tillery, LLC) for Mark Rushing. Brendan A. McShane (Latham & Watkins LLP) for Chevron, USA, Inc.

Companies: Chevron USA, Inc.

Cases: StateUnfairTradePractices KansasNews