Scharfstein v. BP W. Coast Prods., LLC, 423 P.3d 757

Background

BP operated ARCO and am/pm stations in Oregon and charged a 35¢ per-transaction debit card fee at some stations; BP controlled street signage and prohibited franchisees from disclosing the fee there.
OAR 137-020-0150 (Gasoline Price Advertising Rule) requires disclosure on street signs of any “condition” affecting the advertised lowest cash price; the rule defines “condition” to include payment methods that affect price per unit.
Plaintiff Scharfstein sued as a class action under the UTPA (ORS 646.608(1)(u)), alleging BP failed to disclose the debit fee on street signs and charged customers more than the pump-registered amount.
The court certified a class of 2,046,500 purchasers (Jan 1, 2011–Aug 30, 2013). A jury found BP liable under OAR 137-020-0150(3)(d)(A) and (alternatively) (4)(e); statutory damages awarded totaled $409,300,000 plus fees and costs.
BP appealed multiple assignments of error; the appellate court affirmed in full, rejecting BP’s challenges to the rule’s validity, to classwide causation/reliance, and to the constitutionality of aggregate statutory damages (procedural waiver and merits).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether OAR 137-020-0150(1)(b) (definition of “condition”) is valid	AG has authority under UTPA to define “condition”; prior appellate precedent supports it	Definition exceeds rulemaking authority and is invalid	Valid; BP West Coast Products controlling—rejected BP challenge
Whether a flat 35¢ debit-card fee is a “condition” requiring street-sign disclosure	A debit fee is a payment-method condition that increases price per unit and must be disclosed	Fee is a processing charge separate from fuel price and need not be posted	A debit-card fee is a “condition” under the rule; trial court did not err denying directed verdict
Whether ascertainable loss (causation) requires classwide proof of reliance (Pearson issue)	Reliance not required where fee is an illegal charge; the unlawful assessment itself is the ascertainable loss	Under Pearson, plaintiffs must prove reliance/causal link classwide to recover statutory damages	Reliance not required here; illegal overcharge and failure to disclose as required suffice for causation; class certification and verdict stand
Whether statutory damages ($200 per class member, aggregate ~$409M) violate federal due process	Statutory damages are legislatively prescribed and not grossly disproportionate under Williams; BP waived timely constitutional challenge	Award is grossly disproportionate (ratio to actual harm) and violates due process; decertification or striking damages required	BP’s due-process attack was untimely (waived); trial court did not err in denying post-verdict relief; alternative merits arguments addressed but need not overturn judgment

Key Cases Cited

Hall v. Dept. of Transportation, 355 Or. 503 (Sup. Ct. 2014) (standard of review when plaintiff prevailed at trial)
BP West Coast Products, LLP v. Dept. of Justice, 284 Or. App. 723 (Or. Ct. App. 2017) (Attorney General permitted to define “condition” under the UTPA)
Pearson v. Philip Morris, 358 Or. 88 (Or. 2015) (class UTPA causation; when reliance is required to show ascertainable loss)
Brand Energy Services, LLC v. OR-OSHA, 261 Or. App. 210 (Or. Ct. App. 2014) (rule interpretation principles)
Tye v. McFetridge, 342 Or. 61 (Or. 2006) (interpretive approach to administrative rules)
Tri-West Const. v. Hernandez, 43 Or. App. 961 (Or. Ct. App. 1979) (reliance not required when party had legal duty to disclose)
Purdy v. Deere & Co., 355 Or. 204 (Or. 2014) (when overlapping theories of liability make one submission harmless)
Parrott v. Carr Chevrolet, Inc., 331 Or. 537 (Or. 2000) (procedural timing for challenging punitive damages)
BMW of N. Am., Inc. v. Gore, 517 U.S. 559 (U.S. 1996) (punitive damages excessiveness guideposts)
St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63 (U.S. 1919) (standard for reviewing statutory-penalty excessiveness)