Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Temperature-affected motor fuel sales doesn’t violate state laws, (Apr 12, 2016)

By Michael Menzhuber, J.D., LL.M.

The federal district court in Oakland, California, dismissed claims that two companies violated various state deceptive and unfair trade practices and consumer protection laws based on a failure to disclose that motor fuel expands at a certain temperature and a failure to adjust the price of motor fuel based on expansion. In granting the companies’ motion to dismiss, the court determined that there can be no violation of the consumer protection laws where the alleged misconduct is required or specifically permitted by federal or state law (Duke v. Flying J, Inc., April 11, 2016, Hamilton, P.)

The proposed class action asserted that the defendants, including Flying J, Inc. (F-J) and Pilot Travel Centers, LLC (PTC), failed to: (1) disclose that the volume of motor fuel expands at a temperature exceeding 60 degrees Fahrenheit; and (2) adjust the price of the motor fuel to compensate for volume expansion and the corresponding reduction in fuel. The plaintiffs alleged, in part, that F-J violated the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), the North Carolina Unfair and Deceptive Trade Practices Act (NCUDTPA), the Texas Deceptive Trade Practices Act (TDTPA), and the Virginia Consumer Protection Act, and that PTC violated the FDUTPA.

The court granted the defendants’ motion to dismiss the sole remaining plaintiff’s claim of violation of state consumer protection laws. It noted that: (1) conduct authorized by a specific consumer protection scheme cannot impose liability under a general consumer protection statute; and (2) the National Institute of Standards and Technology (NIST) Handbook 44 and 130 only recognizes automatic temperature compensation (ATC) to 60 degrees Fahrenheit in wholesale, not retail, motor fuel and other fuel-delivery applications. Additionally, each of the respective states’ laws and administrative regulations: (1) require that motor fuel be sold on a volumetric basis, without reference to temperature, and provide specific penalties if motor fuel is sold on another basis; and (2) have adopted the NIST definitions of basic units of weights and measures, including Handbook 44.

Although not necessary, the court found that summary judgment was appropriate for the additional reasons argued by the defendants that the plaintiff’s claims presented nonjusticiable political questions and were preempted by federal law.

The case is No. C 15-2564 PJH and C 15-2566 PJH.

Attorneys: Lesley Duke, pro se. Amy Crouch (Shook, Hardy & Bacon LLP) for Flying J Inc. and Pilot Travel Centers LLC.

Companies: Flying J Inc.; Pilot Travel Centers LLC

Cases: ConsumerProtection StateUnfairTradePractices CaliforniaNews