Stertz v. Gulf Oil Corp.

95 F.R.D. 116, 36 Fed. R. Serv. 2d 1004, 1982 U.S. Dist. LEXIS 9604
CourtDistrict Court, E.D. New York
DecidedAugust 4, 1982
DocketNo. 78 Civ. 1813
StatusPublished
Cited by3 cases

This text of 95 F.R.D. 116 (Stertz v. Gulf Oil Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stertz v. Gulf Oil Corp., 95 F.R.D. 116, 36 Fed. R. Serv. 2d 1004, 1982 U.S. Dist. LEXIS 9604 (E.D.N.Y. 1982).

Opinion

MEMORANDUM AND ORDER

GLASSER, District Judge:

Plaintiffs in this action allege that they bought refined products from the defendant, Gulf Oil Corporation (“Gulf”), during the period 1973 through 1975. They claim that Gulf wilfully overcharged them for these products, in violation of Section 210 of the Economic Stabilization Act, 12 U.S.C. § 1904 (note) (“ESA”). Plaintiffs seek to recover the amount of the alleged overcharge, trebled, as allowed under certain circumstances by Section 210 of the ESA.

Plaintiffs now move to certify the class they wish to represent. Although this class was initially defined as all direct purchasers from Gulf of refined products during the period 1973 to 1975, after a lengthy exchange of memoranda the proposed class has been narrowed to include only the following: all those direct purchasers of refined petroleum products from Gulf during the period 1973-75, except consumer credit-card purchasers of gasoline and gasoline products and purchasers through Gulf consignees and Gulf-owned gas stations.1 For the reasons that follow, the proposed class is certified pursuant to Fed.R.Civ.P. 23(c)(1).

Discussion

Governing this Court in determining whether to certify the proposed class are [118]*118the prerequisites and considerations enumerated in Fed.R.Civ.P. 23. Before a class can be certified, the Court must be satisfied that the prerequisites of Rule 23(a) are met, and that the action fits within one of the subdivisions contained in Rule 23(b).

Plaintiffs argue that the fourfold test embodied in Rule 23(a), involving “numerosity,” “commonality,” “typicality,” and “adequacy of representation,” is met in the instant case. As to “numerosity,” the plaintiffs argue that the class numbers in the tens of thousands, rendering “joinder of all members . . . impracticable.” As to “commonality,” the plaintiffs allege that questions of law and fact common to all class members exist with respect to whether or not Gulf charged prices in excess of those legally permitted. As to “typicality,” the plaintiffs assert that all members of the proposed class have identical interests in that they all were direct purchasers from Gulf who were allegedly overcharged for their products. As to “adequacy of representation,” the plaintiffs maintain that they are represented by experienced counsel thoroughly familiar with class action litigation, and that there are no actual or potential conflicts of interest between the members of the proposed class and the representative parties.

Plaintiffs argue further that the action satisfies Rule 23(b)(3) in that questions of law and fact common to members of the class predominate over any questions affecting only individual members, and a class action is superior to other available methods of adjudicating the controversy. Plaintiffs maintain that the overriding common issue of law and fact is whether Gulf overcharged its affiliates in connection with the transfer price of crude oil. As to the superiority of the class action method of adjudicating this controversy, the plaintiffs argue that the large number of potential claimants and the predominance of common questions render it judicially economical to resolve the suit in one forum. Plaintiffs also point out that the cost and complexity of the litigation would discourage those with smaller claims from asserting their rights.

The defendant raises a two-pronged attack on the propriety of certifying the proposed class. The main thrust of the defendant’s argument is that a class action is not a superior method of adjudicating this controversy because Section 210 of the ESA contains sufficient incentives to induce individual suits. The second aspect of the defendant’s argument is that the class should not be certified because the interests of the proposed class members are in conflict.2

These two arguments of the defendant will be considered in the discussion that follows. As to those prerequisites to class certification that the defendant has not challenged, the contentions of the plaintiff are accepted by this Court.

I.

The defendant’s first argument is that since the ESA contains incentives to promote individual suits, a class action is not a superior means, within the meaning of Rule 23(b)(3), of adjudicating the instant controversy. Under § 210 of the ESA, a plaintiff who proves that he was wilfully overcharged may recover “reasonable attorneys’ fees and costs, in addition to whichever of the following sums is greater: (1) an amount not more than three times the amount of overcharge upon which the action is based; or (2) not less than $100 or more than $1,000.” ESA § 210(b). Thus, under the ESA, a plaintiff who is overcharged even a minimal amount may recover up to $1,000 plus attorneys’ fees and [119]*119costs. The defendant argues that this statutory scheme provides such a strong incentive for individual suits that class actions are not necessary under the Act.

In support of this argument the defendant relies primarily on Arnson v. General Motors Corp., 377 F.Supp. 209 (N.D. Ohio 1974). In Arnson, the plaintiffs brought a class action suit under § 210 of ESA alleging that the defendant had committed wilful overcharges in the sale of automobiles. The plaintiffs subsequently moved to certify the class, and the defendant cross-moved to dismiss the action on the ground that the prices complained of had been set by independent dealerships who were not named as defendants. Although the court granted the defendant’s motion to dismiss, it went on to determine that “a class action under Rule 23, Fed.R.Civ.P. is not proper under the Economic Stabilization Act.” Id. at 214. The court reasoned: “The Act is drafted to provide incentive for individuals to enforce its provisions without resort to a class action. The Court, therefore, concludes that a class action under the Act is not superior to individual suits.” Id. at 215.

The Arnson court in reaching its decision relied primarily upon an analogy to cases decided under the Truth-In-Lending Act (“TILA”). Like the ESA, the TILA provides for the recovery of $100 to $1,000, plus attorneys’ fees and costs, regardless of the amount of the actual loss suffered by the plaintiff. Because of this incentive for individual suits, various courts prior to Arnson had declined to certify proposed classes in TILA suits. See, e.g., Ratner v. Chemical Bank N.Y. Trust Co., 54 F.R.D. 412 (S.D.N.Y.1972); Lindig v. City National Bank, 59 F.R.D. 154 (S.D.Ohio 1973).

The plaintiff argues that the reasoning embodied in Arnson should not be followed here, and this Court agrees. First, the discussion of the Arnson court regarding the class certification issue was mere dicta, since the court already had determined to dismiss the plaintiff’s complaint. Second, to the extent that Arnson can be interpreted as advocating a per se rule prohibiting class action suits in ESA cases, the court’s reliance on the TILA cases is misplaced.

An analysis of the cases denying class certification under the TILA reveals that rather than adopting a per se

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Related

Stertz v. Gulf Oil Corp.
783 F.2d 1064 (Temporary Emergency Court of Appeals, 1986)
Stertz v. Gulf Oil Corp.
99 F.R.D. 74 (E.D. New York, 1983)
STATE OF MINN. BY HUMPHREY v. Standard Oil Co.
568 F. Supp. 556 (D. Minnesota, 1983)

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Bluebook (online)
95 F.R.D. 116, 36 Fed. R. Serv. 2d 1004, 1982 U.S. Dist. LEXIS 9604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stertz-v-gulf-oil-corp-nyed-1982.