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In re Motor Fuel Temperature Sales Practices Litigation

United States District Court, Tenth Circuit

May 29, 2013

IN RE: MOTOR FUEL TEMPERATURE SALES PRACTICES LITIGATION (This Document Relates to All Cases)

MEMORANDUM AND ORDER

KATHRYN H. VRATIL, District Judge.

This matter comes before the Court on plaintiffs' Proposed Notice Plans For Class Action Settlements And California Trial Cases ("Combined Notice Plan") (Doc. #4549) filed April 15, 2013, which defendants do not oppose.[1] For reasons stated below, the Court orders plaintiffs to file revised notices and supplemental evidence regarding the proposed notice plan.

I. Factual Background

A. Settlements

The Court has preliminarily approved ten settlement agreements and conditionally certified settlement classes under Rule 23(b)(3). More specifically, on September 28, 2012, the Court preliminarily approved a settlement agreement with Dansk Investment Group, Inc. (formerly known as USA Petroleum Corporation). See In re Motor Fuel Temp. Sales. Pract. Litig., 286 F.R.D. 488 (D. Kan. 2012). On November 20, 2012, the Court granted preliminary approval to settlement agreements with (1) BP Products North America Inc. and BP West Coast Products LLC (collectively, "BP"); (2) CITGO Petroleum Company; (3) ConocoPhillips Company; (4) Motiva Enterprises LLC and Equilon Enterprises LLC d/b/a Shell Oil Products U.S. (collectively, "Shell"); (5) Sinclair Oil Corporation and its corporate affiliates (collectively, "Sinclair"); (6) Casey's General Stores, Inc.; and (7) Sam's Club, Sam's East, Inc., Sam's West, Inc., Wal-Mart Stores, Inc. Wal-Mart Stores East, LLP (collectively, "Sam's"). See In re Motor Fuel Temp. Sales Pract. Litig., No. 07-MD-1840-KHV, 2012 WL 5876558 (D. Kan. Nov. 20, 2012). On December 10, 2012, the Court preliminarily approved settlement agreements with Exxon Mobil Corporation, Esso Virgin Islands, Inc. and Mobil Oil Guam, Inc. (collectively, "ExxonMobil"), and Valero Marketing and Supply Company and Valero Energy Corporation (collectively, "Valero"). See In re Motor Fuel Temp. Sales Pract. Litig., No. 07-MD-1840-KHV, 2012 WL 6115085 (D. Kan. Dec. 10, 2012).

B. California Cases

In three California cases, 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.), the Court certified classes under Rule 23(b)(2) and (3), Fed. R. Civ. P., against Chevron USA, Inc. See In re Motor Fuel Temp. Sales Pract. Litig., ___ F.Supp.2d ___, 07-MD-1840-KHV, 2013 WL 1397125 (D. Kan. April 5, 2013).[2] Specifically, in each case, the Court certified a class of "consumers" for plaintiffs' claims under the California Consumers Legal Remedy Act ("CLRA"), Cal. Civ. Code § 1750 et seq. and a class of "individuals and entities" for plaintiffs' other claims. Id. at *19. The classes include all consumers (or 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.

On April 5, 2013, the Court also certified identical classes against the remaining non-settling defendants in the California cases. See Order (Doc. #4544). Specifically, in Rushing, the Court certified classes against Circle K Stores, Inc., Flying J, Inc., Petro Stopping Centers, L.P., Pilot Travel Centers LLC, Inc. and Travel Centers of America, Inc. In Lerner, the Court certified classes against G&M Oil Company, Inc., G&M Oil Co., LLC, United El Segundo, Inc. and World Oil Corp. In Wyatt, the Court certified classes against Circle K Stores, Inc. and 7-Eleven, Inc. Id. at 2. Each case includes a class of "all consumers" and a class 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 defendants. Id.

II. Legal Standards

With respect to classes certified under subsection (b)(3), Rule 23(c)(2)(B) requires the following notice:

For any class certified under Rule 23(b)(3), the court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must clearly and concisely state in plain, easily understood language:
(i) the nature of the action;
(ii) the definition of the class certified;
(iii) the class claims, issues, or defenses;
(iv) that a class member may enter an appearance through an attorney if the member so desires;
(v) that the court will exclude from the class any member who requests exclusion;
(vi) the time and manner for requesting exclusion; and
(vii) the binding effect of a class judgment on members under Rule 23(c)(3).

Fed. R. Civ. P. 23(c)(2)(B).

With respect to class settlements, Rule 23(e) requires the Court to direct notice "in a reasonable manner to all class members who would be bound by the proposal." Fed.R.Civ.P. 23(e). The content and form of notice are left to the Court's discretion. See Gottlieb v. Wiles , 11 F.3d 1004, 1013 (10th Cir. 1993), overruled in part on other grounds by Devlin v. Scardelletti , 536 U.S. 1 (2002). Under Rule 23(e), notice of a settlement must "fairly apprise" class members of the terms of the proposed settlement and their options with respect thereto. Id . (quoting 3B Moore's Federal Practice ¶ 23.80[3], at 23-484).[3]

In addition to the requirements of Rule 23, the Due Process Clause in the Fifth Amendment of the United States Constitution guarantees unnamed class members the right to notice of class certification or settlement. See U.S. Const., amend. V; DeJulius v. New England Healthcare Empls. Pension Fund , 429 F.3d 935, 943-44 (10th Cir. 2005). This due process right does not require actual notice to each party intended to be bound by adjudication of a class action. See DeJulius , 429 F.3d at 944. The Court must give "the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." Id . (quoting In re Integra Realty Res., Inc. , 262 F.3d 1089, 1110-11 (10th Cir. 2001)). The legal standards for satisfying Rule 23(c)(2)(B) and due process are coextensive and substantially similar. See DeJulius , 429 F.3d at 944; Fed.R.Civ.P. 23(c) advisory committee's note (Rule 23(c)(2) notice designed to fulfill due process requirements).

Individual notice to identifiable class members "is not a discretionary consideration to be waived in a particular case"; rather, it is "an unambiguous requirement of Rule 23." Eisen v. Carlisle & Jacquelin , 417 U.S. 156, 176 (1974). Plaintiffs' pocketbooks are not a factor - the mandatory notice requirement may not be relaxed based on the high cost of providing notice. Amchem Prods., Inc. v. Windsor , 521 U.S. 591, 617 (1997); Eisen , 417 U.S. at 176; Burns v. Copley Pharm., Inc., 132 F.3d 42 (Table), 1997 WL 767763, at *2 (10th Cir. Dec. 11, 1997). Thus, "[t]he means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it." Mullane, 339 U.S. at 315. The "constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected." Id . For example, publication notice does not satisfy due process where the names and addresses of the putative class members are known or very easily ascertainable. Eisen , 417 U.S. at 174-75 (citing Mullane, 339 U.S. at 318). Rule 23(c)(2) prefers individual notice because "notice by publication ...


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