Plaintiffs in Rushing v. Ambest, Inc., No. 06-7621-PJH (N.D.Cal.), Lerner v. Costco Wholesale Corp., No. 07-1216-GHK-FMO (C.D.Cal.), and Wyatt v. B.P. America Corp., No. 07-1754-BTM-JMA (S.D.Cal.), bring class action claims for damages and injunctive relief against defendants which own, operate or control gas stations in California. Plaintiffs claim that because defendants sell motor fuel for a specified price per gallon without disclosing or adjusting for temperature and its effects on motor fuel, they are liable under California law for breach of the duty of good faith and fair dealing (Lerner), unjust enrichment (Lerner and Wyatt), violation of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200 et seq. (Lerner, Rushing and Wyatt), and violation of the California Consumers Legal Remedy Act (“CLRA”), Cal. Civ.Code § 1750 et seq. (Rushing).
Under Rule 23, Fed.R.Civ.P., plaintiffs ask the Court to certify a class of “consumers” for their CLRA claims and a class of “individuals and entities” for their other claims. Plaintiffs also ask the Court to model these classes after the dual class certification in similar Kansas cases. See In re Motor Fuel Temp. Sales Practices Litig.,
Chevron is a defendant in each of the three California eases. It insists that it is unique among codefendants and would be prejudiced by a joint tidal. The Court therefore ordered the parties to show cause why it should not “sever all claims against Chevron in these cases, remand the claims to their respective transferor courts with a view to transferring claims in two of the cases to one district under 28 U.S.C. § 1404(a), consolidate the three cases against Chevron for all future proceedings and temporarily stay all proceedings as to the other non-settling California defendants.” Order To Show Cause (Doc. # 4520) filed March 12, 2013. No party objected to severing plaintiffs’ claims
This matter is before the Court on plaintiffs’ motions for class certification in Rushing, Lerner and Wyatt, including supplemental briefing which the Court recently ordered.
Legal Standards
The class action is an exception to the usual rule that litigation is conducted by and on behalf of individual named parties only. Wal-Mart Stores, Inc. v. Dukes, — U.S. —,
This case involves Rule 23(b)(2) and (3). Rule 23(b)(2) requires plaintiffs to show that Chevron “acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a
Rule 23 does not set forth a mere pleading standard. Comcast,
This “rigorous analysis” will “[f]requently ... entail some overlap with the merits of the plaintiffs underlying claim.” Dukes,
Factual And Procedural Background
The three California cases captioned above—Rushing v. Ambest, Inc., No. 06-7621-PJH (N.D.Cal), Lerner v. Costco Wholesale Corp., No. 07-1216-GHK-FMO (C.D.Cal.), and Wyatt v. B.P. America Corp., No. 07-1754-BTM-JMA (S.D.Cal.)—are part of multidistriet litigation in the U.S. District Court for the District of Kansas, In re Motor Fuel Temp. Sales Practices Litig., No. 07-1840-KHV. Of the numerous claims which plaintiffs brought against Chevron in the California eases, they ask the Court to certify only four: (1) breach of the duty of good faith and fair dealing (Lemer), (2) unjust enrichment (Lemer and Wyatt), (3) violation of the UCL, Cal. Bus. & Prof.Code § 17200 et seq. (Lemer, Rushing and Wyatt) and (4) violation of the CLRA, Cal. Civ. Code § 1750 et seq. (Rushing).
In each of the three California eases, plaintiffs ask the Court to certify two different classes—a class of “consumers” for their CLRA claims and a class of “individuals and entities” for the others. Plaintiffs propose the following class definition for the CLRA classes:
All consumers that, at any time since January 1, 2004, purchased motor fuel at retail in the state of California, from a gas station owned, operated or controlled by [Chevron].
Plaintiffs’ Supplemental Brief (Doc. #4502) at 2. They propose the following class definition for the rest of their claims:
All individuals and entities that, at any time since January 1, 2004, purchased motor fuel at retail in the state of California, from a gas station owned, operated or controlled by [Chevron].
Id.
Plaintiffs’ claims are based on their assertion that the temperature of motor fuel af
Analysis
Plaintiffs ask the Court to replicate the class structure in the Kansas motor fuel cases. Plaintiffs’ Supplemental Brief (Doc. #4502) at 2. In those cases, under Rule 23(b)(2) and Rule 23(b)(3) and (c)(4), Fed. R.Civ.P., the Court certified overlapping classes as to the liability and injunctive relief aspects of plaintiffs’ claims. See In re Motor Fuel Temp. Sales Practices Litig.,
Plaintiffs ask that the Court certify two different classes in this manner—a class of “consumers” for their CLRA claims and a class of “individuals and entities” for their other claims. Chevron opposes plaintiffs’ request for class certification. It argues that the proposed classes do not meet various requirements in Rule 23(a), (b)(2), (b)(3) and (c)(4). It also argues that named plaintiffs lack Article III standing and statutory standing to bring UCL claims.
I. Standing
A. Article III Standing
Chevron argues that Rushing plaintiffs lack Article III standing because they did not allege that a named plaintiff purchased motor fuel from Chevron in certain states. Chevron does not name which states are implicated in this argument. The second amended complaint in Rushing alleges that plaintiff John Telles purchased fuel from Chevron in California for personal, family or household use. Chevron’s argument regarding his Article III standing to sue is therefore without merit.
Chevron also argues that because each proposed class “contains numerous individuals who have not suffered monetary injury, it contains members who lack Article III standing and should not be certified.” Defendants’ Supplemental Opposition To Class Certification (Doc. # 4507) at 4. Article III standing is a threshold matter central to the Court’s subject matter jurisdiction. See Amchem Prods., Inc. v. Windsor,
B. UCL Statutory Standing
Chevron argues that named plaintiffs do not meet the statutory standing requirements for bringing UCL claims. Under the UCL, “[a]ny person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204.” Cal. Bus. & Prof.Code § 17203. Under Section 17204, the “person” must have “suffered injury in fact and ... lost money or property as a result of the unfair competition.” Cal. Bus. & Prof.Code § 17204. This standing requirement applies to only the class representatives, and not to absent class members. In re Tobacco II Cases,
A “presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation [or omission] was material.” Id. A misrepresentation or omission is material if a reasonable person would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question. Id. at 327,
II. Rule 23 Requirements
Rule 23, Fed.R.Civ.P., governs class certification. As the party requesting class certification, plaintiffs must first demonstrate that:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a). Second, the proposed class must satisfy at least one of the three requirements listed in Rule 23(b). Plaintiffs seek class certification under Rule 23(b)(2) and (b)(3).
Rule 23(b)(2) requires that “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” For Rule 23(b)(3) to apply, the Court must find that “questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” To determine predominance and superiority, the Court considers:
(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Fed.R.Civ.P. 23(b)(3).
Rule 23(c)(4) provides that “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.” The Fifth Circuit has held that a “district court cannot manufacture predominance through the nimble use of subdivision (c)(4).” Castano v. Am. Tobacco Co.,
The Second, Seventh and Ninth Circuits have taken a different view. They have held that “if common questions do not predominate over the individual questions so that class certification of the entire action is warranted,” a court may use Rule 23(c)(4) to “isolate the common issues ... and proceed with class treatment of these particular issues.” Valentino v. Carter-Wallace, Inc.,
Although the Tenth Circuit has not addressed the question, this Court has generally followed the approach of the Second, Seventh and Ninth Circuits, and has used Rule 23(e)(4) to certify parts of claims where doing so “would materially advance the disposition of the litigation of the whole.” Fulghum v. Embarq Corp., No. 07-2602-EFM,
Courts should use Rule 23(c)(4), however, only “where resolution of the particular common issues would materially advance the disposition of the litigation as a whole.” Fulghum,
In addition to the explicit requirements of Rule 23(a), the party seeking class certification must demonstrate that an identifiable and ascertainable class exists. In re Urethane Antitrust Litig.,
III. Adequacy Of Class Definition
Plaintiffs ask the Court to certify a class of “consumers” for their CLRA claims and a class of “individuals and entities” for the others. Plaintiffs propose the following class definition for the CLRA classes:
All consumers that, at any time since January 1, 2004, purchased motor fuel at retail in the state of California, from a gas station owned, operated or controlled by [Chevron].
Plaintiffs’ Supplemental Brief (Doc. # 4502) at 1. Plaintiffs propose the following class definition for the rest of their claims:
All individuals and entities that, at any time since January 1, 2004, purchased motor fuel at retail in the state of California, from a gas station owned, operated or controlled by [Chevron].
Id.
Chevron argues that the class definitions do not fit plaintiffs’ theories of recovery and are “imprecise, overbroad and unascertaina-ble” because they contain members who have not been harmed. The Court has previously rejected this argument, noting as follows: “The crux of plaintiffs’ claims is that defendants sell motor fuel at retail without disclosing or accounting for temperature. The proposed class definition captures this premise. Although plaintiffs may rely on the 60-de-gree-Fahrenheit reference temperature in proving their claims, the class definition is precise, objective and presently ascertainable
IV. “Liability” Issue Classes Under Rule 23(c)(4)
Plaintiffs ask the Court to certify issue classes under Rule 23(c)(4) that are limited to the “liability” aspects of their claims. For purposes of certifying the proposed classes, the “liability” aspects of plaintiffs’ claims include all substantive elements of the claims, including causation and injury. “Liability” does not include questions of remedy, e.g. damages, injunctive relief and restitution.
The basic “liability” elements of plaintiffs’ breach of the duty of good faith and fair dealing claims are that (1) plaintiffs and Chevron entered into a contract; (2) plaintiffs did all, or substantially all of the significant things that the contract required; (3) all conditions required for Chevron’s performance had occurred; (4) Chevron unfairly interfered with plaintiffs’ right to receive the benefits of the contract; and (5) plaintiffs were harmed. Judicial Council of California Civil Jury Instructions (2013), CACI No. 325.
The basic “liability” elements of plaintiffs’ unjust enrichment claims are that (1) plaintiffs conferred a benefit on Chevron, (2) which Chevron knowingly accepted, (3) under circumstances that make it inequitable for Chevron to retain the benefit without paying for its value. See Hernandez v. Lopez,
The basic “liability” elements of plaintiffs’ UCL claims are that (1) plaintiffs and Chevron are “persons” under the UCL; (2) Chevron engaged in unfair competition (i.e. unlawful, unfair and/or fraudulent business acts or practices); (3) named plaintiffs suffered economic injury as a result of Chevron’s acts or practices; and (4) members of the public were likely deceived. See Cal. Bus. & Prof. Code §§ 17200, 17201; In re Tobacco II Cases,
The basic “liability” elements of plaintiffs’ CLRA claims are that (1) plaintiffs were “consumers” under the CLRA; (2) Chevron was a “person” under the CLRA; (3) plaintiffs and Chevron engaged in a transaction intended to result or which resulted in the sale or lease of goods or services; (4) Chevron used unfair methods of competition, or unfair or deceptive acts or practices, in violation of the CLRA; (5) as a result, plaintiffs suffered damage. See Cal. Civ. Code §§ 1750, 1761,1770,1780.
A. “Liability” As Appropriate Issue Class
Without citing any authority, Chevron argues that “ ‘liability’ is a perplexing ‘issue’ to propose” because it is “not a narrow issue within the chain of proof that might be appropriately handled under (c)(4).” Defendants’ Supplemental Opposition To Class Certification (Doc. # 4507) at 8-9. Chevron ignores the fact that “[ejertifying a class to determine the defendant’s liability, while leaving the class members to pursue their individual damages claims, is a common example of partial certification.” Ruiz,
B. Material Advancement Of Litigation
Chevron argues that certifying Rule 23(c)(4) classes as to “liability” would not materially advance the litigation because common issues are inextricably tied to individual issues outside the (e)(4) classes, and the remaining individual issues make the case unmanageable. The Court disagrees. If the Court certifies Rule 23(c)(4) classes as to Chevron’s liability and Chevron prevails, the class actions will end. If plaintiffs prevail, the Court can determine whether injunctive relief is appropriate. By quantum leaps, this approach will advance the resolution of plaintiffs’ core claims on a class-wide basis. See Memorandum And Order (Doc. # 1675) at 29-30 (injunctive relief is centerpiece of motor fuel eases because it is only way for plaintiffs to change how defendants sell fuel). The “liability” aspects of plaintiffs’ claims are therefore appropriate for issue certification under Rule 23(e)(4).
V. Rule 23(a) Prerequisites
As noted above, to satisfy the prerequisites of Rule 23(a), plaintiffs must “affirmatively demonstrate” that (1) the class is so numerous that joinder of all members is impracticable; (2) questions of law or fact are common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a); Dukes,
A. Numerosity
Rule 23(a)(1) requires plaintiffs to show that “the class is so numerous that joinder of all members is impracticable.” The numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations. Gen. Tel. Co. of Nw., Inc. v. EEOC,
B. Commonality
Rule 23(a)(2) requires plaintiffs to show that “questions of law or fact are common to the class.” Commonality requires plaintiffs to demonstrate that the class members have “suffered the same injury.” Dukes,
This ease involves a uniform method of selling motor fuel at retail by the gallon
1. Breach Of The Duty Of Good Faith And Fair Dealing
To establish a claim for breach of the duty of good faith and fair dealing, plaintiffs must show that (1) a retail motor fuel transaction constitutes a contract, (2) plaintiffs fulfilled their contractual obligations, (3) all conditions required for Chevron’s performance had occurred, (4) Chevron unfairly interfered with plaintiffs’ right to receive the benefit of the contract and (5) plaintiffs were harmed. See Judicial Council of California Civil Jury Instructions (2013), CACI No. 325. Because California imposes an objective standard for determining whether a contract existed and whether Chevron unfairly interfered with plaintiffs’ right to the benefit of the contract, and because class members’ transactions with Chevron were materially similar, plaintiffs’ claims for breach of the duty of good faith and fair dealing are susceptible to classwide proof based on the expectations of a reasonable consumer. See Klein v. Chevron U.S.A., Inc.,
Similarly, the “harm” element presents a common question based on plaintiffs’ theory that under Chevron’s method of selling motor fuel at retail, harm is inherent in every retail motor fuel transaction regardless the temperature of the fuel.
2. Unjust Enrichment
To prevail on their unjust enrichment claim, plaintiffs must show that (1) they conferred a benefit on Chevron, (2) Chevron appreciated or knew of the benefit and (3) Chevron retained the benefit under such circumstances as to make the retention inequitable. U.S. for Use & Benefit of Walton Tech., Inc. v. Weststar Eng’g, Inc.,
3. UCL
The UCL prohibits unfair competition, which includes “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof.Code § 17200. Each of these three prongs is defined broadly;
The “fraudulent” prong of the UCL prohibits a business act or practice if it is “likely to deceive the public,” which is determined based on “the likely effect such practice would have on a reasonable consumer.” Klein,
Plaintiffs allege that Chevron violated the UCL by selling motor fuel by the gallon without disclosing or adjusting for temperature and its effect on motor fuel—a practice that Chevron applied uniformly to all consumers. The elements of plaintiffs’ UCL claims present common questions that do not require individualized proof.
4. CLRA
Chevron may be liable for violating the CLRA if, among other things, it represented to plaintiffs that the fuel they purchased had characteristics which it did not have or was of a particular standard, quality or grade, if it was of another. See Cal. Civ.Code § 1770(a)(5), (7); see also Klein,
To prevail on a failure to disclose claim under the CLRA, plaintiffs must show that Chevron had a duty to disclose the material fact(s) it withheld. A duty to disclose arises, among other circumstances, if Chevron actively concealed a material fact from plaintiffs or if Chevron made partial representations but also suppressed some material facts. See Johnson v. Harley-Davidson Motor Co. Grp., LLC,
Plaintiffs allege a common practice that caused class members a common injury. Classwide proceedings in this case would therefore “generate common answers apt to drive the resolution of the litigation,” and any dissimilarities within the proposed class do not “impede the generation of common answers.” Dukes,
C. Typicality And Adequacy Of Representation
Rule 23(a)(3) requires plaintiffs to show that the “claims or defenses of the representative parties are typical of the claims or defenses of the class.” The test of typicality is whether all class members were at risk of being subjected to the same harmful practices, regardless of any class member’s individual circumstances. Stricklin,
Determining adequacy of representation turns on two questions: (1) whether named plaintiffs and their counsel have any conflicts of interest with other class members and (2) whether named plaintiffs and their counsel will vigorously prosecute the action on behalf of the class. E. Tex. Motor Freight Sys., Inc. v. Rodriguez,
Chevron challenges the typicality of the class representatives and the adequacy of representation because (1) not every member of the class wants ATC at retail, (2) some class members typically purchase motor fuel that is cooler than 60 degrees Fahrenheit, (3) some class members purchased fuel at a negotiated price under a fleet contract and (4) certain named plaintiffs lack Article III standing because they did not purchase fuel from Chevron in California.
1. Desirability Of ATC At Retail
Chevron argues that the named representatives are atypical and inadequate because some class members oppose one form of injunctive relief which they seek—the implementation of ATC at retail. According to Chevron, some class members believe that ATC at retail will result in higher fuel prices with no corresponding benefit to class members. Although Chevron contends that class members hold differing opinions whether ATC would benefit the class as a whole, it does not argue these differences among class members would cause some class members to benefit at the expense of others. These types of potential conflicts that might arise at a later stage in the litigation do not defeat class certification. See Wallace B. Roderick Revocable Living Trust v. XTO Energy, Inc.,
Moreover, before plaintiffs may obtain in-junctive relief requiring Chevron to install ATC, they must prove that the requested relief will benefit the class as whole. If the evidence shows that mandating ATC would
2. Class Members May Typically Purchase Fuel Cooler Than 60 Degrees Fahrenheit
Chevron argues that named plaintiffs cannot adequately represent potential class members who typically purchase fuel that is cooler than 60 degrees. It has not attempted to demonstrate that any potential class members typically purchase fuel that is cooler than 60 degrees and the record indicates that the average temperature of motor fuel sold in California is warmer than 60 degrees. Regardless, plaintiffs’ theory of recovery does not turn on whether the temperature of fuel is warmer or cooler than 60 degrees. Plaintiffs allege that by not disclosing the temperature of motor fuel at retail some harm to the consumer is inherent in every retail motor fuel transaction regardless the temperature of the fuel. Although the degree of injury may vary among class members based on the temperature of the fuel they purchase, under plaintiffs’ theory every retail motor fuel transaction causes an injury.
3. Some Class Members Purchased Fuel At Negotiated Price Under Fleet Contract
Chevron contends that named representatives cannot adequately represent class members who purchased fuel at a negotiated price under fleet contracts. Based on the class definition, which confines class members to those who “pm-chased motor fuel at retail in the state of California,” it is not clear whether individuals or entities that purchased fuel at negotiated prices under fleet contracts would even qualify. Regardless, this difference does not defeat typicality because “the claims of the representative plaintiffs and class members are based on the same legal and remedial theories and arise from the same pattern of conduct by defendants: all of them allegedly suffered injury on account of defendants’ sale of motor fuel for specified prices per gallon without disclosing or adjusting for temperature expansion.” In re Motor Fuel Temp. Sales Practices Litig.,
4. Article III Standing—No Purchases From Chevron In California
As discussed above, Chevron argues that Rushing plaintiffs lack Article III standing because they did not allege that a named plaintiff purchased motor fuel from Chevron in certain states. If true, named plaintiffs would not be typical of class members who did purchase from Chevron and would not adequately represent the class. See Rector,
VI. Rule 23(b) Requirements
In addition to the requirements of Rule 23(a), plaintiffs must affirmatively demonstrate that the class satisfies the requirements of one of the types of class actions listed in Rule 23(b). Here, plaintiffs seek class certification under Rule 23(b)(2) and (b)(3).
A. Rule 23(b)(2) Classes
Class certification under Rule 23(b)(2) requires plaintiffs to show that “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Claims for monetary relief may not be certified under
1. Cohesiveness And Manageability Of Class
Under Rule 23(b)(2), plaintiffs request class certification of only their claims for injunctive relief. The gravamen of plaintiffs’ claims for injunctive relief is that Chevron sold motor fuel at retail to plaintiffs by the gallon without disclosing or adjusting for temperature and its effects on motor fuel. This practice applied uniformly to all class members and could therefore be remedied by a single injunction applicable to them all. Chevron contends, however, that plaintiffs’ proposed (b)(2) class is not cohesive because some class members may oppose ATC at retail. Disagreements among class members about the effectiveness of ATC at retail— which is just one of several forms of injunctive relief that plaintiffs seek—do not implicate the cohesiveness of the class. That is, class members’ disagreement about ATC does not undermine plaintiffs’ allegation that Chevron acted uniformly with respect to the class or that injunctive relief would be appropriate respecting the class as a whole. Rather, the argument goes to the merits of plaintiffs’ claim for injunctive relief and whether ATC would actually benefit the class.
Chevron also argues that the class is not manageable because it would require the Court to examine individual purchasing behavior of each putative class member, the temperature of the fuel at the hundreds of retail stations and retailers’ individualized pricing decisions, including how the per-unit retail price would change if ATC were required. This ignores the fact that plaintiffs allege that they suffered similar injuries caused by Chevron’s uniform practice of selling motor fuel by the gallon without disclosing or adjusting for temperature and its effects. Plaintiffs will not need to prove individual circumstances regarding each class member, but can show injury by classwide proof.
On this record the Court can conceive of a uniform injunction that could address plaintiffs’ alleged injury that will satisfy the requirements of Rule 23(b)(2) and Rule 65(d), Fed.R.Civ.P., which governs injunctions. The Court could craft an injunction requiring Chevron to implement ATC, disclose the temperature of fuel and/or disclose the effect of temperature on fuel in specific terms that describe in reasonable detail the act or acts restrained or required. See Fed.R.Civ.P. 65(d)(1).
2. Plaintiffs’ Request For Damages
In Dukes, the U.S. Supreme Court made clear that Rule 23(b)(2) “does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.”
Here, however, plaintiffs ask the Court to certify a(b)(2) class for injunctive relief only. They ask the Court to certify the liability aspects of plaintiffs’ claims in a separate issues class under Rule 23(b)(3) and (e)(4), presumably to hold open the possibility of obtaining classwide monetary relief and to
For these reasons, under Rule 23(b)(2), the Court certifies plaintiffs’ claims for injunctive relief based on unjust enrichment and breach of the duty of good faith and fair dealing, and for violation of the UCL and CLRA.
B. Rule 23(b)(3) Classes
To certify a class under Rule 23(b)(3), plaintiffs must show that “the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). For particular issues to be certified using Rule 23(c)(4), the requirements of Rule 23(a) and (b) must be satisfied only with respect to those issues. See Fed.R.Civ.P. 23(c)(4); Fulghum,
(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Fed.R.Civ.P. 23(b)(3).
Here, plaintiffs have met the requirements of predominance and superiority: (A) class members likely have little interest in individually controlling the prosecution of separate actions because the amount at stake for individual class members is small relative to the cost of maintaining a separate action; (B) although a similar case is pending in California state court, see Klein v. Chevron USA Inc., No. BC367812 (L.A.Super.Ct.), it does not appear to be moving toward trial any time soon—plaintiffs have moved to stay that case and Chevron has moved for judgment of abatement; (C) the Court intends to sever all claims against Chevron in these cases, remand the claims to their respective transferor courts with a view to transferring claims in two of the eases to one district under 28 U.S.C. § 1404(a), consolidate the three eases against Chevron for all future proceedings, which is a desirable plan for adjudicating plaintiffs’ claims in a just and speedy manner; and (D) by severing plaintiffs’ claims against Chevron and bifurcating the question of individual damages, the Court has narrowed the class action to discrete questions of law and fact that can be resolved on a elasswide basis. The Court foresees no case management issue that would dissuade it from certifying under Rule 23(b)(3) a class as to the liability and injunctive relief aspects of plaintiffs’ claims. As noted above, the proposed (b)(3) classes involve common questions of law or fact. See supra Part V.B. (discussing commonality). These questions predominate over any individualized questions that may arise, and handling the claims in a class action is better than making class members bring their own claims separately.
Chevron argues that plaintiffs’ claims require individualized proof based on the circumstances of each fill-up, including the temperature of the fuel, whether the class member would have paid less or received more fuel for the same price with ATC and whether Chevron purchased fuel at wholesale on a temperature-adjusted basis at the time of each transaction. Because plaintiffs allege that Chevron treated all class members the same in all material respects, these individual inquiries are unnecessary.
Determining each class members’ damages, if any, may require individualized determinations, but “[t]he possibility that individual issues may predominate the issue of damages ... does not defeat class certification by making [the liability] aspect of the
Even if individualized issues (rather than common issues) were to predominate the damage inquiry, the more appropriate course of action would be to bifurcate a damages phase and/or decertify the class as to individualized damages determinations. In other words, even if individualized issues predominate the issue of damages, the court believes that common questions nonetheless predominate in this ease because common questions will govern the more difficult, threshold liability issues....
This approach is consistent with Rule 23(c)(4), which permits, “[w]hen appropriate, an action [to] be brought or maintained as a class action with respect to particular issues.” It is also consistent with the Advisory Committee Note on Rule 23(b)(3), which states that “a fraud perpetrated on numerous persons by the use of similar misrepresentations may be an appealing situation for a class action, and it may remain so despite the need, if liability is found, for separate determination of the damages suffered by individuals within the class.” See also Fed.R.Civ.P. 23(c)(4) advisory committee note (“[I]n a fraud or similar case the action may retain its ‘class’ character only through the adjudication of liability to the class; the members of the class may thereafter be required to come in individually and prove the amounts of their respective claims.”). Other federal courts have adopted a similar approach.
Structuring the actions in this way will reduce the range of issues in dispute, promote judicial economy and avoid the due process issues which Chevron raises in light of Dukes. By certifying the liability and injunctive relief aspects of plaintiffs’ claims in a(b)(3) class, the Court avoids any actual or perceived conflict with Dukes. It also avoids possible Seventh Amendment and preclusion issues which other defendants raised in their proposed trial plan in the Kansas cases. See [Kansas] Defendants’ Submission In Response To Court’s November 11, 2010 Order Requiring A Proposed Trial Plan (Doc. # 1734) filed December 3, 2010. For these reasons, and in light of the common questions discussed above which predominate over individual issues, under Rule 23(b)(3) the Court certifies the “liability” aspects of plaintiffs’ claims for unjust enrichment and breach of the duty of good faith and fair dealing, and for violation of the UCL and CLRA
VII. Summary Of Class Certification
This class certification order relates only to the following four claims against Chevron: (1) breach of the duty of good faith and fair dealing (Lemer), (2) unjust enrichment (Lerner and Wyatt), (3) violation of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200 et seq. (Lemer, Rushing and Wyatt), and (4) violation of the California Consumers Legal Remedy Act (“CLRA”), Cal. Civ.Code § 1750 et seq. (Rushing). Regarding these claims, the Court certifies two classes in each of the three California cases—Rushing v. Ambest,
All consumers that, at any time since January 1, 2004, purchased motor fuel at retail in the state of California, from a gas station owned, operated or controlled by Chevron.
The other class relates to plaintiffs’ remaining claims and consists of:
All individuals and entities that, at any time since January 1, 2004, purchased motor fuel at retail in the state of California, from a gas station owned, operated or controlled by Chevron.
The Court certifies each of these classes under Rule 23(b)(2) and (b)(3). The (b)(2) class is limited to plaintiffs’ claims for injunc-tive relief and the (b)(3) class is limited to the “liability” aspects of plaintiffs’ claims. As it did in the Kansas eases, the Court bifurcates plaintiffs’ request for damages. Chevron’s liability will be determined in Phase I. Any relief will be determined in Phase II if necessary.
The basic “liability” elements of plaintiffs’ unjust enrichment claims are that (1) plaintiffs conferred a benefit on Chevron, (2) which Chevron knowingly accepted, (3) under circumstances that make it inequitable for Chevron to retain the benefit without paying for its value. See Hernandez,
The basic “liability” elements of plaintiffs’ breach of the duty of good faith and fair dealing claims are that (1) plaintiffs and Chevron entered into a contract; (2) plaintiffs did all, or substantially all of the significant things that the contract required; (3) all conditions required for Chevron’s performance had occurred; (4) defendant unfairly interfered with plaintiffs’ right to receive the benefits of the contract; and (5) plaintiffs were harmed. Judicial Council of California Civil Jury Instructions (2013), CACI No. 325.
The basic “liability” elements of plaintiffs’ UCL claims are that (1) plaintiffs and Chevron are “persons” under the UCL; (2) Chevron engaged in unfair competition (i.e. unlawful, unfair and/or fraudulent business acts or practices); (3) named plaintiffs suffered economic injury as a result of Chevron’s acts or practices; and (4) members of the public were likely deceived. See Cal. Bus. & Prof. Code §§ 17200, 17201; In re Tobacco II Cases,
The basic “liability” elements of plaintiffs’ CLRA claims are that (1) plaintiffs were “consumers” under the CLRA; (2) Chevron was a “person” under the CLRA; (3) plaintiffs and Chevron engaged in a transaction intended to result or which resulted in the sale or lease of goods or services; (4) Chevron used unfair methods of competition, or unfair or deceptive acts or practices, in violation of the CLRA; (5) as a result, plaintiffs suffered damage. See Cal. Civ. Code §§ 1750,1761,1770,1780.
IT IS THEREFORE ORDERED that Plaintiffs Motion For Class Certification (Doc. # 1131) filed June 1, 2009, Lemer California Plaintiffs’ Motion For Class Certification And Memorandum In Support (Doc. # 1088) filed June 1, 2009 and Wyatt California Plaintiffs’ Motion For Class Certification And Memorandum In Support (Doc. # 1089) filed June 1, 2009 be and hereby are SUSTAINED in part as described above.
. Chevron purported to reserve the right to raise various objections along the way, but it has not received leave of court to "reserve” any response to the order to show cause.
. Chief Judge Kozinski's denial of the request for a Certificate of Necessity for intercircuit assignment does not affect this trial plan. See Opinion (Doc. # 4529) filed March 19, 2013. If anything, the benefits of the plan even more clearly outweigh the alternatives now that one or more new judges will have to catch up on nearly six years of litigation history.
. Rushing motion and briefs: Plaintiffs Motion For Class Certification (Doc. # 1131) filed June 1, 2009; Defendants' Opposition To Rushing Plaintiffs’ Motion For Class Certification And Memorandum In Support (Doc. #1314) filed September 30, 2009; and Rushing Plaintiffs’ Reply In Support Of Motion For Class Certification (Doc. # 1520) filed December 15, 2009.
Lerner motion and briefs: Lerner California Plaintiffs’ Motion For Class Certification And Memorandum In Support (Doc. # 1088) filed June 1, 2009; Defendants' Opposition To Lerner California Plaintiffs' Motion For Class Certification And Memorandum In Support (Doc. #1311) Hied September 30, 2009; and Lerner California Plaintiffs' Reply In Support Of Motion For Class Certification (Doc. # 1491) filed December 14, 2009.
Wyatt motion and briefs: Wyatt California Plaintiffs' Motion For Class Certification And Memorandum In Support (Doc. # 1089) filed June 1, 2009; Defendants' Opposition To Wyatt California Plaintiffs’ Motion For Class Certification And Memorandum In Support (Doc. #1319) filed September 30, 2009; Wyatt California Plaintiffs’ Reply In Support Of Motion For Class Certification (Doc. # 1496) filed December 14, 2009.
Supplemental briefing: Plaintiffs' Supplemental Brief In Support Of Class Certification In The California Cases (Doc. # 4502) filed February 2, 2013; Defendants’ Opposition To Plaintiffs’ Supplemental Motion For Class Certification And Memorandum In Support (Doc. # 4507) filed February 8, 2013; Plaintiffs Supplemental Reply Brief In Support Of Class Certification In The California Cases (Doc. #4512) filed February 15, 2013.
. These classes exclude “Federal judges who have presided over this case, persons employed by [Chevron], affiliates of [Chevron], and any juror or alternate assigned to the trial of this ease.” Plaintiffs' Supplemental Brief (Doc. # 4502) at 2 n. 4.
. The "actual reliance” requirement applies only to UCL actions "based on a fraud theory involving false advertising and misrepresentations to consumers.” See In re Tobacco II Cases,
. In support of its motions for summary judgment on plaintiffs’ UCL and CLRA claims, Chevron argues that California plaintiffs lack standing to bring these claims because they "received the benefit of their bargain” under Kwikset Corp. v. Super. Ct.,
. 60 degrees Fahrenheit is the national standard reference temperature for petroleum products. The standard was adopted to remedy inequities in wholesale motor fuel transactions by enabling the buyer and seller to calculate the exact number of net gallons involved in a motor fuel transaction regardless of the temperature of the fuel at the time of sale.
. To be entitled to recover under a theory of unjust enrichment, plaintiffs must also show that plaintiffs and Chevron did not have an enforceable contract covering the retail motor fuel transactions in question. See Hernandez,
. The elements of plaintiffs’ claims are subject to clarification as necessary.
. The commonality and typicality requirements "tend to merge”; "[b]oth serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.” Dukes,
. The parties disagree about the elements of plaintiffs’ UCL and CLRA claims, particularly with respect to reliance and injury. The Court does not resolve these disputes at this time. Even under Chevron’s version of the elements (which requires plaintiffs to prove a duty to disclose, reliance and injury), plaintiffs may satisfy their burden with common proof that Chevron misrepresented or omitted a "material” fact in retail motor fuel transactions with class members. See In re Tobacco II Cases, 46 Cal.4th at
This case is not like Mazza v. Am. Honda Motor Co.,
Here, Chevron sold fuel at retail without disclosing or adjusting for temperature or its effects. It made the same representations and omissions in every retail transaction. Plaintiffs allege the same form of injury to every person who purchased motor fuel from Chevron based on uniform misrepresentations and omissions. This case is therefore more like In re Tobacco II Cases than Mazza and In re Vioxx Class Cases. See also Gutierrez,
. California state courts have split over "how to define ‘unfair’ in the consumer action context.” Lozano,
. See Pella Corp. v. Saltzman,