Windy Cove, Inc. v. Circle K Stores, Inc.

Opinion

1 2 3 4 5 6 7 10 11 WINDY COVE, INC., et al., Case No. 21-cv-1416-MMA-DEB

12 Plaintiffs, ORDER RE DAUBERT MOTIONS AND MOTIONS FOR SUMMARY 13 v. JUDGMENT

14 CIRCLE K STORES, INC. and DOES 1– [Doc. Nos. 120, 125–28, 136] 20, 15 Defendants. 16 CIRCLE K STORES, INC., 17 Counter-Claimant, 18 v. 19 UNIVERSITY CITY MOBIL AND 20 SOUTH BAY, et al., 21 Counterclaim-Defendants. 22 23 24 Plaintiffs Windy Cove, Inc. (“Windy Cove”), HB Fuel, Inc. (“HB Fuel”), and Staffing 25 and Management Group Inc. (“Staffing,” and together with Windy Cove and HB Fuel, 26 “Plaintiffs”) bring this action against Defendant Circle K asserting claims for (1) breach 27 of contract – breach of covenant of good faith and fair dealing; (2) declaratory relief; and 28 (3) unfair business practices in violation of California Business and Professions Code 1 § 17200, et seq. See Doc. No. 27 (“FAC”). Defendant brings one counterclaim against 2 all Plaintiffs and Counterclaim-Defendants Hamid Kalhor (“Kalhor”) and Mohammad 3 Bahour (“Bahour,” and together with Kalhor, “Counterclaim-Defendants”) for 4 declaratory relief. See Doc. No. 116 (“Amended Counterclaim”). Plaintiffs and 5 Defendant have filed cross-motions for summary judgment and relatedly move to exclude 6 certain opinions offered by each other’s retained experts. See Doc. Nos. 119, 122–24, 7 131, 136.1 The Court found this matter suitable for determination on the papers and 8 without oral argument pursuant to Civil Local Rule 7.1.d.1. See Doc. No. 174. For the 9 reasons set forth below, the Court GRANTS Defendant’s motion for summary judgment, 10 DENIES Plaintiffs’ motion for partial summary judgment, DENIES Plaintiffs’ Daubert 11 motion as to Dr. Umbeck, GRANTS Defendant’s Daubert motion as to Mr. Maday, and 12 DECLINES to rule on Defendant’s Daubert motions as to Dr. Luna and Mr. Boedeker. 13 I. BACKGROUND2 14 The following facts are not reasonably in dispute. Prior to 2012, Plaintiff Windy 15 Cove and Counterclaim-Defendants Kalhor (the principal of Plaintiff HB Fuel) and 16 Bahour (the principal of Plaintiff Staffing) were ExxonMobil Oil Corporation 17 (“ExxonMobil”) franchisees that purchased Mobil-branded fuel under a fuel supply 18 agreement with ExxonMobil. Doc. No. 167-1 (“Defendant’s Separate Statement” or 19 “DSS”) at No. 1.3 20 Defendant Circle K (“Defendant”) is a wholesale distributor or “jobber” who 21 purchases gasoline and in turn wholesales it to dealers with whom it has contracted for 22 the supply of Mobil-branded gasoline. Doc. No. 171-1 (“Plaintiffs’ Separate Statement 23

24 25 1 Counterclaim-Defendants oppose Defendant’s motion for summary judgment but have not filed their own motion for summary judgment. See Doc. No. 155. 26 2 These material facts are taken from the parties’ separate statements of fact and responses thereto, as well as the supporting declarations and exhibits. Disputed material facts are discussed in further detail 27 where relevant to the Court’s analysis. Facts that are immaterial for purposes of resolving the current motions are not included in this recitation. 28 1 or “PSS”) at No. 16. Defendant purchases Mobil-branded gasoline from ExxonMobil for 2 subsequent sale and distribution to Plaintiffs. PSS at No. 14. Defendant also purchases 3 Mobil-branded gasoline from ExxonMobil that is sold at Defendant’s company operated 4 gas stations (“COOPs”). Id. 5 Plaintiff Windy Cove purchased its station from ExxonMobil in February 2012. 6 DSS at No. 3. Windy Cove entered into a 15-year fuel supply agreement entitled 7 “Complete Contract of Sale (Branded-Reseller)” (“Windy CCOS”) with Defendant with a 8 commencement date of February 23, 2012. Id. at No. 4; see PSS at No. 5. On June 26, 9 2015, Kalhor signed a 15-year fuel supply agreement titled “Complete Contract of Sale 10 (Branded-Reseller)” (“Kalhor CCOS”) with Defendant. DSS at No. 15; see PSS at No. 6. 11 On January 28, 2014, Bahour signed a 15-year fuel supply agreement titled “Complete 12 Contract of Sale (Branded-Reseller)” (“Bahour CCOS”) with Defendant. DSS at No. 16; 13 see PSS at No. 7. 14 All three Gasoline Agreements4 contain an open price fuel term which states, in 15 relevant part: 16 6. Price. The price per gallon to be paid by Purchaser shall be the Seller’s price 17 in effect at the time and place of delivery to dealers of the same class and in 18 the same trade area as Purchaser. … All prices charged by Seller are subject to the provisions of applicable law. 19

20 PSS at No. 10; see also Doc. No. 119-11 (“Windy Cove Commodity Schedule”) at 30–31 21 ¶ 6; Doc. No. 119-27 (“Kalhor Commodity Schedule”) at 2 ¶ 6; Doc. No. 119-26 22 (“Bahour Commodity Schedule”) at 26 ¶ 6. 23 In August 2014, Bahour assigned his fuel supply agreement to his company, 24 Staffing. DSS at No. 19. In August 2015, Kalhor assigned his fuel supply agreement to 25 his affiliated company, HB Fuel. Id. at No. 18. 26

27 4 The Court refers to the Windy CCOS, Kalhor CCOS, and Bahour CCOS as the “Gasoline 28 1 Some years later, Plaintiffs began to complain to Defendant Circle K that its prices 2 were too high. This lawsuit followed. 4 Plaintiffs move to exclude the expert testimony of Dr. John Umbeck in its entirety. 5 See Doc. No. 136. Defendant moves to exclude portions of the expert testimony of 6 Donald Maday. See Doc. No 123. For the reasons set forth below, the Court DENIES 7 Plaintiffs’ motion to exclude Dr. Umbeck’s expert testimony and GRANTS Defendant’s 8 motion to exclude Mr. Maday’s expert testimony.5 9 A. Legal Standard 10 Rule 702 of the Federal Rules of Evidence provides that expert opinion evidence is 11 admissible if: “(a) the expert’s scientific, technical, or other specialized knowledge will 12 help the trier of fact to understand the evidence or to determine a fact in issue; (b) the 13 testimony is based on sufficient facts or data; (c) the testimony is the product of reliable 14 principles and methods; and (d) the expert has reliably applied the principles and methods 15 to the facts of the case.” Fed. R. Evid. 702. As the Ninth Circuit recently explained: 16 17 Under Daubert and its progeny, including Daubert II, a district court’s inquiry into admissibility is a flexible one. Alaska Rent-A-Car, Inc. v. Avis Budget 18 Grp., Inc., 738 F.3d 960, 969 (9th Cir. 2013). In evaluating proffered expert 19 testimony, the trial court is “a gatekeeper, not a fact finder.” Primiano v. Cook, 598 F.3d 558, 565 (9th Cir. 2010) (citation and quotation marks 20 omitted). 21 “[T]he trial court must assure that the expert testimony ‘both rests on a 22 reliable foundation and is relevant to the task at hand.’” Id. at 564 (quoting 23 Daubert, 509 U.S. at 597). “Expert opinion testimony is relevant if the knowledge underlying it has a valid connection to the pertinent inquiry. And 24 it is reliable if the knowledge underlying it has a reliable basis in the 25

26 5 Because the Court does not reach the question of damages, the Court DECLINES to rule on the 27 motion to exclude the expert testimony of Dr. Luna and the motion to exclude portions of the expert testimony of Mr. Boedeker. See Doc. Nos. 125, 127. Relatedly, the Court DECLINES to rule on 28 1 knowledge and experience of the relevant discipline.” Id. at 565 (citation and internal quotation marks omitted). “Shaky but admissible evidence is to be 2 attacked by cross examination, contrary evidence, and attention to the burden 3 of proof, not exclusion.” Id. at 564 (citation omitted). The judge is “supposed to screen the jury from unreliable nonsense opinions, but not exclude opinions 4 merely because they are impeachable.” Alaska Rent-A-Car, 738 F.3d at 969. 5 Simply put, “[t]he district court is not tasked with deciding whether the expert is right or wrong, just whether his testimony has substance such that it would 6 be helpful to a jury.” Id. at 969–70. 7 8 City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1043 (9th Cir. 2014). “Challenges 9 that go to the weight of the evidence are within the province of a fact finder, not a trial 10 court judge. A district court should not make credibility determinations that are reserved 11 for the jury.” Id. at 1044. 12 B. Plaintiffs’ Motion to Exclude Dr. Umbeck’s Opinions 13 Dr. John Umbeck has a PhD in Economics from the University of Washington and 14 is currently a Professor of Economics in the Krannert Graduate School of Management at 15 Purdue University. Doc. No. 136-4 (“Umbeck Report”) at 1. Dr. Umbeck has conducted 16 research in the petroleum industry and marketing of petroleum products over the past 17 forty (40) years. Id. He has served as a consultant and researcher “for most major oil 18 companies, many smaller oil companies, jobbers and chain retailers.” Id. On October 19 25, 2022, Dr. Umbeck authored a report providing his opinions on “the plaintiffs’ claims 20 as put forth in their complaint dated July 12, 2021 and their Amended Complaint and 21 certain of Circle K’s defenses.” See id. at 2, 41. On December 16, 2022, Dr. Umbeck 22 submitted a rebuttal report to the Expert Report of Don Maday. Doc. No. 136-5 23 (“Umbeck Rebuttal”). On December 12, 2022, Dr. Umbeck prepared a document titled 24 “Critique” of the expert report of Barbara Luna. Doc. No. 136-6 (“Umbeck Critique”). 25 Plaintiffs move to exclude the opinions of Dr. Umbeck in their entirety or at least 26 in part. Doc. No. 136-1 at 5. Broadly, Plaintiffs argue that Dr. Umbeck’s opinions rely 27 on an unreliable methodology and incorrect legal standards. See generally Doc. No. 136- 28 1. 1 Dr. Umbeck opines “that [Defendant]’s [Dealer Buying Price] during the relevant 2 time period was “in the range” of the [Dealer Buying Price] offered by the other major 3 brand suppliers in LA and SD and OC. [Defendant] has passed the test for ‘commercially 4 reasonable’ pricing.” Umbeck Report at 11. He bases this opinion on an economic 5 analysis “compar[ing] (a) the wholesale prices charged retail dealers in Los Angeles, San 6 Diego and Orange Counties by other suppliers of major branded gasoline to (b) the 7 wholesale prices Plaintiffs paid to Circle K for Mobil branded fuel.” Id. at 5. He 8 obtained the prices from Lundberg Survey Inc., which he states, “surveys retail dealers of 9 each major brand daily to obtain the wholesale prices paid at their stations.” Id. 10 Dr. Umbeck concludes “[t]here is no factual support for the Plaintiffs’ claim of 11 commercially unreasonable, excessive, or unfair pricing, using ‘the range’ or ‘in the 12 ballpark’ as a measure of what is commercially unreasonable.” Id. at 11. 13 As an initial matter, Plaintiffs challenge Dr. Umbeck’s qualifications, urging that 14 “Dr. Umbeck was active 20 years and more ago, but not currently and demonstrated no 15 real understanding or knowledge of the petroleum industry relevant to the time period 16 relevant to this action, 2017 to present.” Doc. No. 136-1 at 11. However, Defendant 17 offers evidence that Dr. Umbeck remains active as an expert in the petroleum industry. 18 Doc. No. 151 at 6 (citing Doc. No. 151-4 (“Umbeck Depo.”), Vol. 1 at 33:8–34:19, 19 35:17–22, 41:24–42:24, 43:18–44:11, 46:20–47:3, 48:1–11, 49:2–7). Additionally, 20 Plaintiffs provide no evidence that suggests Dr. Umbeck’s considerable experience is no 21 longer relevant. The Court is satisfied that Dr. Umbeck is qualified to testify as an expert 22 in this case. 23 Plaintiffs next argue that Dr. Umbeck’s opinions are unreliable because he relies 24 on Lundberg Surveys. Doc. No. 136-1 at 11–12. The Court is not persuaded. In his 25 report, Dr. Umbeck states “Lundberg Survey Inc. surveys retail dealers of each major 26 brand daily to obtain the wholesale prices paid at their stations. Lundberg calls this the 27 “Dealer Buying Price” (DBP). I have worked with Lundberg Survey for 40 years and 28 have relied on its data for my own academic research.” Umbeck Report at 5. 1 Dr. Umbeck opines that in his decades of experience “many if not most major oil 2 companies subscribe to Lundberg in order to learn the DBP charged by their competitors 3 (as competitors do not voluntarily share their prices with each other). Id. at 6. Dr. 4 Umbeck further opines that “[t]o my knowledge there is no other company that lists and 5 compiles DBPs other than Lundberg and accordingly it is relied upon by the industry and 6 by pricing experts generally in court cases that address DBPs.” Id. Plaintiffs’ expert 7 Stefan Boedeker stated in his deposition that his firm also uses Lundberg data. Doc. 8 No. 151-7 at 48:11–49:15. (“Boedeker Depo.”). Further, Defendant submits a sworn 9 declaration from Trilby Lundberg, the President of Lundberg Survey, Inc., which 10 explains Lundberg Survey’s method of data collection and that “Lundberg is an 11 independent market research company which researches the U.S. petroleum and related 12 industries [and] provides statistical reports and publications to the oil industry and other 13 users. Doc. No. 119-38 (“Lundberg Decl.”). There is no authority for the position that 14 Dr. Umbeck’s opinions are unreliable because he relies on Lundberg Surveys. Instead, 15 Plaintiffs’ arguments go to the weight of this evidence. The Court finds no reason to 16 exclude Dr. Umbeck’s opinion based on Dr. Umbeck’s reliance on Lundberg Surveys. 17 Plaintiffs next argue that Dr. Umbeck’s opinions should be excluded because he 18 fails to define what constitutes “in the range.” Doc. No. 136-1 at 14–15. However, in his 19 report, Dr. Umbeck states Circle K’s prices are “in the range” and “commercially 20 reasonable,” concluding that Defendant’s prices and were “not the highest nor are they 21 the lowest.” Doc. No. 136-4 at 10. The Court finds this is not a basis to exclude 22 Dr. Umbeck’s opinion. 23 Plaintiffs next argue that Dr. Umbeck did not include other suppliers such as 24 in his analysis. Doc. No. 136-1 at 11–17. Plaintiffs’ argument 25 is based on Plaintiffs’ legal theory of commercial unreasonableness—i.e., that “in the 26 range” means “competitive with other wholesalers . . . being in the ‘middle of the pack’ 27 of all [gasoline] wholesalers in the area.” See id. at 15 (emphasis omitted). However, as 28 explained below infra Section III.B., this is not the appropriate standard. The Court 1 concludes that Dr. Umbeck’s opinions regarding commercial reasonableness do not rest 2 on an erroneous legal standard. Accordingly, this is not a basis to exclude Dr. Umbeck’s 3 opinion. 4 Finally, Plaintiffs argue that Dr. Umbeck’s “rebuttal reports rely in their core upon 5 the same errors in analysis as those discussed above” and therefore the “report should be 6 excluded for the same reasons.” Doc. No. 136-1 at 22. Because the Court has not found 7 Dr. Umbeck’s opinions rely on an unreliable methodology or incorrect legal standards, it 8 similarly concludes there is no basis to exclude Dr. Umbeck’s rebuttal reports. 9 In sum, the Court is satisfied that Dr. Umbeck’s opinions “rest[] on a reliable 10 foundation and a[re] relevant to the task at hand.’” Primiano, 598 F.3d at 564 (quoting 11 Daubert, 509 U.S. at 597). The Court therefore DENIES Plaintiffs’ motion to exclude 12 the opinions and testimony of Dr. Umbeck. 13 C. Defendant’s Motion to Partially Exclude Mr. Maday’s Opinions 14 As an initial matter, the parties do not dispute that Donald Maday has considerable 15 experience working in the petroleum industry, nor has Defendant moved to exclude 16 Mr. Maday’s opinions on the ground that he is not qualified. However, Defendant moves 17 to exclude some of Mr. Maday’s opinions on the following grounds: (1) Mr. Maday’s 18 opinion that Circle K’s pricing formula is not commercially reasonable is inconsistent 19 with the controlling legal standard and improper expert opinion; (2) Mr. Maday’s opinion 20 that Circle K’s pricing is designed to run the dealers out of business is irrelevant and 21 improper expert testimony; (3) Mr. Maday’s opinions that Circle K’s pricing is 22 discriminatory and about Circle K’s cost of goods are irrelevant and improper expert 23 testimony; (4) Mr. Maday’s opinion that Circle K’s wholesale prices are not 24 commercially reasonable is based on an incorrect legal standard and is improper expert 25 opinion; and (5) Mr. Maday’s opinions that Circle K’s retail pricing at its own company 26 owned and operated property/station (“COOP”) is commercially unreasonable and 27 “squeezes” and harms the dealers are irrelevant to the Dealers’ claims, inconsistent with 28 the controlling legal standard, and are improper expert testimony. Doc. No. 123-1. 1 Mr. Maday’s opinions that Defendant’s pricing formula is not commercially 2 reasonable and that Defendant’s wholesale prices are not commercially reasonable must 3 be excluded. Mr. Maday’s opinions as to the reasonableness of Circle K’s price and 4 pricing formula are based on Plaintiffs’ legal theory of commercial unreasonableness: 5 that pricing methodology is relevant to an objective bad faith inquiry. Plaintiffs do not 6 argue otherwise. See Doc. No. 159. However, as explained below infra Section III.B.2, 7 this is not the standard. Relatedly, Mr. Maday’s opinion that Defendant’s pricing is 8 designed to run the dealers out of business is irrelevant given that—by Plaintiffs’ own 9 concession—the relevant inquiry is objective, and not subjective, bad faith. See infra 10 Section III.B. “Expert testimony that is based on an erroneous understanding or 11 application of the law cannot meet the requirements of Rule 702 because it cannot 12 logically assist the trier of fact.” In re Katz Interactive Call Processing Pat. Litig., No. 13 07-2196 RGK (FFMX), 2009 WL 10676152, at *2 (C.D. Cal. Mar. 11, 2009); see also 14 Olin Corp. v. Lamorak Ins. Co., No. 84-CV-1968 (JSR), 2018 U.S. Dist. LEXIS 65446, 15 2018 WL 1901634, at *21 (S.D.N.Y. Apr. 18, 2018) (“Expert testimony also should be 16 excluded when it applies the wrong legal standard.”). Similarly, Mr. Maday’s opinions 17 that Circle K’s pricing is discriminatory and about Circle K’s cost of goods—including 18 the price Circle K pays for fuel and Circle K’s alleged “transfer price” to its own 19 COOPs—is subject to exclusion. As noted above, Plaintiffs’ price discrimination theory 20 fails as a matter of law for the reasons set forth infra Section III.B.2, and as Magistrate 21 Judge Butcher previously ruled in the context of a discovery dispute, “The price Circle K 22 pays for the fuel sold to Plaintiffs is not relevant to [ ] analysis [under § 2305(2)], and is 23 not necessary for Plaintiffs to prepare their case for trial.” Doc. No. 56 at 8. 24 Finally, Defendant urges that Mr. Maday’s opinion that Circle K’s retail pricing at 25 its own COOP is commercially unreasonable and “squeezes” and harms the dealers 26 should be excluded. See Doc. No. 123-1 at 16–18. The Court agrees. As described in 27 more detail infra Section III.B, the relevant inquiry is whether Circle K’s prices fall 28 within the range of prices charged by other competitors. 1 In sum, the Court finds that while Mr. Maday is qualified to testify as a petroleum 2 industry expert, his testimony as to the above is impermissible. Accordingly, the Court 3 finds the proffered opinions inadmissible and GRANTS Defendant’s Daubert motion. 5 A. Legal Standard 6 Pursuant to Federal Rule of Civil Procedure 56, 7 A party may move for summary judgment, identifying each claim or 8 defense—or the part of each claim or defense—on which summary judgment 9 is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled 10 to judgment as a matter of law. 11 12 Fed. R. Civ. P. 56(a). The party seeking summary judgment bears the initial burden of 13 establishing the basis of its motion and of identifying the portions of the declarations, 14 pleadings, and discovery that demonstrate absence of a genuine issue of material fact. 15 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party has “the burden of 16 showing the absence of a genuine issue as to any material fact, and for these purposes the 17 material it lodged must be viewed in the light most favorable to the opposing party.” 18 Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970). A fact is material if it could 19 affect the outcome of the suit under applicable law. See Anderson v. Liberty Lobby, Inc., 20 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if there is sufficient 21 evidence for a reasonable jury to return a verdict for the non-moving party. See id. 22 The party opposing summary judgment cannot “‘rest upon the mere allegations or 23 denials of [its] pleading’ but must instead produce evidence that ‘sets forth specific facts 24 showing that there is a genuine issue for trial.’” Estate of Tucker v. Interscope Records, 25 Inc., 515 F.3d 1019, 1030 (9th Cir. 2008) (quoting Fed. R. Civ. P. 56(e)). Moreover, “a 26 party cannot manufacture a genuine issue of material fact merely by making assertions in 27 its legal memoranda.” S.A. Empresa de Viacao Aerea Rio Grandense v. Walter Kidde & 28 Co., Inc., 690 F.2d 1235, 1238 (9th Cir. 1982). 1 Where cross-motions for summary judgment are at issue, the court “evaluate[s] 2 each motion separately, giving the nonmoving party in each instance the benefit of all 3 reasonable inferences.” ACLU of Nev. v. City of Las Vegas, 466 F.3d 784, 790–91 (9th 4 Cir. 2006) (citations omitted). That said, “the court must consider each party’s evidence, 5 regardless under which motion the evidence is offered.” Las Vegas Sands, LLC v. 6 Nehme, 632 F.3d 526,532 (9th Cir. 2011). “When opposing parties tell two different 7 stories, one of which is blatantly contradicted by the record, so that no reasonable jury 8 could believe it, a court should not adopt that version of the facts for purposes of ruling 9 on a motion for summary judgment.” Scott v. Harris, 550 U.S. 372, 380 (2007). 10 B. Discussion 11 1. Evidentiary Issues 12 Defendant submits a number of objections to Plaintiffs’ evidence submitted both in 13 support of Plaintiffs’ motion for summary judgment and in opposition to Defendant’s 14 motion for summary judgment. See Doc. Nos. 148-2; 167-2. Plaintiffs did not respond 15 to Defendant’s objections. 16 “A trial court can only consider admissible evidence in ruling on a motion for 17 summary judgment.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002); 18 see also Fed. R. Civ. P. 56(c). However, courts will consider evidence with content that 19 would be admissible at trial even if the form of the evidence would be inadmissible. See 20 Celotex Corp., 477 U.S. at 324; Fraser v. Goodale, 342 F.3d 1032, 1036–37 (9th Cir. 21 2003) (admitting a diary in considering summary judgment where its contents were 22 within the author’s personal knowledge and could be admitted in several ways at trial 23 despite a hearsay objection). Authentication is a “condition precedent to admissibility.” 24 Orr, 285 F.3d at 773. Documents authenticated through personal knowledge must be 25 “attached to an affidavit that meets the requirements of [Federal Rule of Civil Procedure 26 56(c)] and the affiant must be a person through whom the exhibits could be admitted into 27 evidence.” Id. at 774 (emphasis added) (quotation omitted). Foundation does not require 28 personal knowledge where it can be based on the methods permitted by Federal Rules of 1 Evidence 901(b) or 902. Id. Furthermore, “‘objections to evidence on the ground that it 2 is irrelevant, speculative, and/or argumentative, or that it constitutes an improper legal 3 conclusion are all duplicative of the summary judgment standard itself’ and unnecessary 4 to consider here.” Holt v. Noble House Hotels & Resort, Ltd, 370 F. Supp. 3d 1158, 1164 5 (S.D. Cal. 2019) (quoting Burch v. Regents of Univ. of Cal., 433 F. Supp. 2d 1110, 1119 6 (E.D. Cal. 2006)). 7 Accordingly, barring the exceptions below, the Court does not reach any objections 8 on the grounds that the evidence is irrelevant, speculative, that it constitutes hearsay or 9 inadmissible lay opinion, that it constitutes an improper legal conclusion, or that there is a 10 lack personal knowledge. See Burch, 433 F. Supp. 2d at 1122. This disposes of the 11 majority of Defendant’s objections. The Court addresses the remaining objections below. 12 In its tenth objection, Defendant argues that paragraph four of Adeeb Brikho’s 13 declaration, and the invoices attached to Plaintiffs’ motion for 14 summary judgment as Exhibit 19, should be excluded based upon Federal Rule of 15 Evidence 602 (personal knowledge) and Federal Rule of Evidence 901(b) 16 (authentication). See Doc. No. 148-2 at 5–6; Doc. No. 167-2 at 5–6. 17 In his declaration, Brikho states: 18 4. Attached to the motion as “Exhibit 19” are true and correct copies of 19 Circle K invoices that were sent to S&G Zavarao Inc., along with multiple 20 that I was provided copies of from Sam Zavaro of Zavaro Investments, Inc. S&G Zavaro was previously named as a party to 21 this action but has since been dismissed. During various times that I met with 22 Michael Bohnert to discuss my concerns about Circle K’s pricing, and with regards to issues that I had at my Windy Cove station, I would show and 23 provide Mr. Bohnert with copies of these invoices 24 showing that in the prices charged by Circle K to supply my Windy Cove station to the prices that was charging 25 for the same Mobil branded gasoline. 26 27 See Doc. No. 128-5 (“Brikho Decl.”) ¶¶ 3–4 (referring to Doc. No. 131-16 (“Circle K and 28 Invoices”) Ex. 19). Exhibit 19 includes invoices from Defendant and 1 from to S&G Zavaro. Co. Doc. No. 131-16. Defendant argues that Brikho 2 lacks personal knowledge of, and cannot properly authenticate, third-party invoices. See 3 Doc. No. 148-2 at 5–6; Doc. No. 167-2 at 5–6. 4 Based on the evidence before the Court, Brikho does not work for 5 See Brikho Decl. ¶ 2 (stating that Brikho is “an owner and officer of PTL5 Market, Inc., 6 which is a family owned and operated gasoline station[.]”). Accordingly, the Court 7 cannot say Brikho has the requisite personal knowledge to authenticate 8 Co.’s invoices or the pricing of any company outside of PTL5 Market, Inc. Moreover, 9 the Court notes that even the declaration Plaintiffs offer from , the 10 “Chief Executive Officer for Co.,” also does not purport to authenticate the 11 Co. invoices included as part of Exhibit 19. Doc. No. 155-13. 12 At the summary judgment stage, evidence need not be submitted in a form that 13 would be admissible at trial, but the content or substance of the evidence must be 14 admissible.” Tesone v. Empire Mktg. Strategies, 942 F.3d 979, 999 (10th Cir. 2019) 15 (citations and quotation marks omitted). “The requirement is that the party submitting 16 the evidence show that it will be possible to put the information, the substance or content 17 of the evidence, into an admissible form.” Id. at 999 n.15 (citations and quotation marks 18 omitted). Plaintiffs have not done so here. The Court therefore SUSTAINS Defendant’s 19 objections as to the Brikho’s Declaration at paragraph 4 and Exhibit 19. 20 In its eleventh objection, Defendant argues that Plaintiffs’ Exhibit 21, a May 24, 21 2021 email to Circle K’s counsel, should be excluded based on Federal Rule of Evidence 22 408 because it contains improper evidence of compromise offers and negotiations. Doc. 23 No. 148-2 at 6 (citing Doc. No. 155-17 at 12–16, Ex. 21); Doc. No. 167-2 at 6 (citing 24 same). The Court agrees and SUSTAINS the objection. See Fed. R. Evid. 408 advisory 25 committee’s note (2006 amend.) (“Rule 408 excludes compromise evidence even when a 26 party seeks to admit its own settlement offer or statements made in settlement 27 negotiations.”); see also Polk v. BP Amoco Chem. Co., 586 F. Supp. 2d 619, 621–22 28 (D.S.C. 2008) (concluding that a letter from the defendant outlining the defendant’s 1 || position was covered by Rule 408, even though the plaintiff never made any settlement 2 || offer of his own and never expressed any willingness to settle for less than the full 3 |}amount of his claim). 4 Finally, in its twelfth objection, Defendant argues that paragraphs 2—4 of the 5 Cohen Declaration as well as Tables 1—5 in Plaintiffs’ opposition brief, should be 6 || excluded based on Federal Rule of Evidence 602 (personal knowledge) and Federal Rule 7 Evidence 901(b) (authentication). Doc. No. 167-2 at 6. In his declaration, Stuart 8 Cohen, an attorney of record in this case, states: 9 10 2. Attached to as “Exhibit 36” to the evidence in support of the Dealers’ Opposition are true and correct copy of various Lundberg Survey reports that 11 support Tables | and 2 in the Dealers’ opposition for July 1, 2019, September 20, 2019, February 14, 2020, October 27, 2020, August 2, 2021, and September 7, 2021, and December 31, 2021. 13 14 3. On page 27 of the opposition is Table 3 which is a comparison (iim a and Average Rack Prices taken from data obtained for daily OPIS 15 reports that our office obtained from OPIS. I randomly selected dates from 16 the daily OPIS reports that our office obtained from OPIS as part of our OPIS subscription. I extracted the data from the OPIS reports on the dates reflected 17 and copied the data into Table 3 that I created. To the best of my knowledge, 18 I copied the data accurately from the daily OPIS report into Table 3. Attached to the evidence as “Exhibit 31” in support of the Dealers’ Opposition are true 19 and correct copies of the daily OPIS pricing reports that our office received from OPIS. 20 21 4. On page 28 of the opposition are Tables 4 and Table 5, which are 7 comparisons of Circle K’s prices t rices in San Diego County for regular unleaded before taxes, ani rices in San Diego County 23 for regular unleaded before taxes. The data was taken from invoices and price notifications that we received from our clients. I randomly selected dates from the documents, which are attached as Exhibits 19 and 28 to the opposition. 25 The data extracted from the documents was copied into Tables 4 and 5 that I 6 created. To the best of my knowledge, I copied the data accurately from the invoices and price notifications into Tables 4 and 5. 27 28 || Doc. No. 153-3 (“Cohen Decl.”) 4] 2—4 (referring to Doc. No. 155-16, Ex. 19; Doc.

1 No. 155-23, Ex. 28; Doc. No. 155-24, Ex. 31; Doc. No. 155-27, Ex. 36). 2 Statements in legal memoranda are not evidence. Estrella v. Brandt, 682 F.2d 814, 3 819–20 (9th Cir. 1982). Similarly, Mr. Cohen’s efforts to lay the foundation for Exhibits 4 19, 28, 31, and 36, and his explanation for the contents of Tables 1–5 are not evidence; 5 Mr. Cohen is an attorney in this case and not a percipient witness. See Cohen Decl. ¶¶ 2– 6 4. Accordingly, the Court OVERRULES Defendant’s objection. The Court notes it 7 does not consider the Co. invoices included in Exhibit 19 because the Court 8 sustains the objection to that exhibit supra.6 9 2. Claim 1 10 The parties agree that California Commercial Code § 2305(2) governs Plaintiffs’ 11 first cause of action for “Breach of Contract – Breach of Covenant of Good Faith and Fair 12 Dealing.” See Doc. No. 131-1 at 18, 25–28; Doc. No. 119 at 17. Section 2305 provides 13 that parties “can conclude a contract for sale even though the price is not settled.” Cal. 14 Comm. Code § 2305(1). Pursuant to § 2305(2), “[a] price to be fixed by the seller or by 15 the buyer means a price for him to fix in good faith.” Cal. Comm. Code § 2305(2). 16 “Open-price-term contracts are commonly used in the gasoline refining and marketing 17 industry due to price volatility.” Two Bros. Distrib. v. Valero Mktg & Supply Co., 270 F. 18 Supp. 3d 1112, 1120 (Ariz. 2017) (quoting Shell Oil Co. v. HRN, Inc., 144 S.W.3d 429, 19 431 (Tex. 2004) (alteration omitted). 20 Undisputedly, all three Gasoline Agreements contain an open price fuel term. In 21 particular, the Gasoline Agreements contain the following clause regarding the open price 22 fuel term: 23 24 6. Price. The price per gallon to be paid by Purchaser shall be the Seller’s price in effect at the time and place of delivery to dealers of the same class and in 25 26 27 6 Exhibit 19 submitted in support of Plaintiffs’ motion for summary judgment is identical to Exhibit 19 submitted in support of Plaintiffs’ opposition to Defendant’s motion for summary judgment. Compare 28 1 the same trade area as Purchaser. . . .

2 PSS at No. 10; see also Windy Cove Commodity Schedule at 30–31 ¶ 6; Kalhor 3 Commodity Schedule at 2 ¶ 6; Bahour Commodity Schedule at 26 ¶ 6. 4 Official Comment No. 3 to of the Uniform Commercial Code § 2305 states: 5

6 Subsection (2), dealing with the situation where the price is to be fixed by one party rejects the uncommercial idea that an agreement that the seller may fix 7 the price means that he may fix any price he may wish by the express 8 qualification that the price so fixed must be fixed in good faith. Good faith includes observance of reasonable commercial standards of fair dealing in the 9 trade if the party is a merchant. (Section 2–103). But in the normal case a 10 “posted price” or a future seller’s or buyer’s “given price,” “price in effect,” “market price,” or the like satisfies the good faith requirement. 11

12 UCC § 2305 cmt. n.3. The last sentence of this comment creates a safe harbor. See Two 13 Bros. Distrib. Inc., 270 F. Supp. 3d at 1123. In the “normal case,” evidence that a seller 14 charged the regularly posted price will place the seller in the safe harbor and satisfy the 15 requirement of good faith. Id. at 1123 (citing U.C.C. § 2-305 cmt. n.3); see also Flagler 16 Automotive, Inc. v. Exxon Mobil Corp., 582 F. Supp. 2d 367, 374 (E.D.N.Y. 2008) 17 (“Stated differently, comment 3 interprets the UCC to create a “price in effect 18 presumption”—i.e., a presumption that in the ‘normal case,’ the ‘price in effect’ is in 19 good faith as a matter of law.”). The UCC does not define the “normal case” as 20 contemplated by comment 3. Courts have split on what is required to overcome the 21 presumption of good faith created by the safe harbor: 22 On the majority side of the split, a claimant may push a case out of the safe 23 harbor only by showing that a posted price was set with objective bad faith — 24 that the price was either discriminatory or not commercially reasonable. See HRN, Inc., 144 S.W.3d at 434 (“the majority of decisions suggest that a 25 commercially reasonable [fuel] price, that is, one within the range of [fuel] 26 prices charged by other refiners in the market, is a good faith price under section 2.305 absent some evidence that the refiner used pricing to 27 discriminate among its purchasers.”) (citing cases). A minority of courts 28 holds that a case falls outside the safe harbor if a claimant shows the posted 1 price was set with subjective bad faith in the form of improper motive. See Marcoux v. Shell Oil Prods. Co. LLC, 524 F.3d 33 (1st Cir. 2008), aff’d in 2 part, rev'd in part and remanded sub nom. Mac’s Shell Serv., Inc. v. Shell Oil 3 Prods. Co. LLC, 559 U.S. 175, 130 S. Ct. 1251, 176 L. Ed. 2d 36 (2010) (applying Massachusetts law); Allapattah Servs., Inc. v. Exxon Corp., 61 F. 4 Supp. 2d 1308 (S.D. Fla. 1999) (Allapattah II) (applying Florida law). 5 6 Two Bros. Distrib., 270 F. Supp. 3d at 1123. 7 Here, the parties agree that an objective bad faith standard, as recognized by the 8 majority of courts, applies to the instant dispute. See Doc. No. 155 at 18; Doc. No. 119 at 9 18–24. However, the parties dispute what evidence is appropriate under this standard, 10 and whether this is a “normal case” such that the price set by Defendant Circle K enjoys a 11 presumption that the good faith requirement is satisfied. Defendant claims that its prices 12 were commercially reasonable and non-discriminatory. See Doc. No. 119-1 at 17–25. 13 Plaintiffs argue that Defendant’s prices, pricing methodology, and price discrimination 14 take this case outside of the “normal case,” and that the safe harbor provision of 15 Comment 3 therefore does not apply. See Doc. No. 131-1 at 18–27. 16 The parties have offered, and the Court has found, little relevant authority from the 17 Ninth Circuit or California state courts that addresses good faith in price setting pursuant 18 to an open price term contract. California has adopted UCC § 2-305(2) without 19 amendments. Compare Cal. Com. Code § 2305(2) with UCC § 2-305(2). Other states 20 have also adopted UCC § 2305(2) without amendments. Accordingly, the Court looks to 21 other jurisdictions that have adopted UCC § 2305 for guidance. See, e.g., A.R.S. § 47- 22 2305 (Arizona); M.C.L.A. § 440.2305 (Michigan); N.J. Stat § 12A:2-305 (New Jersey); 23 S.D. Codified Laws § 57A-2-305(2) (South Dakota); Tex. Bus. & Com. Code Ann. 24 § 2.305 (Texas). 25 Defendant offers evidence that the price term for Plaintiffs was the “price in effect 26 at the time and place of delivery to dealers of the same class and in the same trade area as 27 Purchaser.” See DSS at No. 7 (citing Doc. 119-47 ¶ 11 (“Dunten Decl.”); Doc. 119-49 28 ¶ 16 (“Fry Decl.”)); DSS at No. 10 (citing Dunten Decl. ¶ 12; Fry Decl. ¶ 16). Plaintiffs 1 purport to dispute these facts on the basis that these facts “lack[ ] foundation” and 2 “assume[] facts not in evidence.” DSS at Nos. 7, 10. However, in light of the discussion 3 below regarding the bases of Ms. Fry’s and Ms. Dunten’s assertions regarding Circle K’s 4 pricing practices, and because Plaintiffs have otherwise not objected to Ms. Fry’s or 5 Ms. Dunten’s declarations, the Court concludes that Plaintiffs do not provide a valid basis 6 for disputing these facts. 7 In her declaration, Stephanie Fry states, “[s]ince 2017, I have been the Director of 8 Fuels for the West Coast Business Unit of Circle K. Stores Inc. [,]” that “[f]rom 2007 9 through 2017, I worked for Circle K in the West Coast Business Unit as a Fuel Analyst 10 and Fuel Manager”, and that “[a]mong other things, from 2011 to the present my team 11 and I set Circle K’s price for wholesale fuel sales in Southern California.” Fry Decl. 12 ¶¶ 2–3. She also states that “[d]uring all times relevant to the allegations in this lawsuit, 13 Circle K charged all of its independent dealers in Los Angeles (“LA”) and Orange 14 County, including Mr. Kalhor and Mr. Bahour and their affiliates, the same wholesale 15 price for fuel. Circle K also charged all of its independent dealers in San Diego County, 16 including Windy Cove, the same wholesale price for fuel.” Id. ¶ 16. Additionally, she 17 states that “Circle K also keeps a database that electronically records all wholesale prices 18 Circle K charges to its dealers (including Plaintiffs)”, which are attached as Exhibits 39, 19 40, and 41 to Defendant’s motion for summary judgment. Id. ¶ 15. Similarly, in her 20 declaration, Gena Dunten states that she is “currently the Director of North America 21 Facilities Category Management at Circle K Stores Inc. (“Circle K”)[,]” and that 22 “[p]reviously, from November 14, 2011 to April 30, 2020, I held the titles of (a) 23 Manager-Administrator at National Wholesale Fuels (“NWF”), which is a division of 24 Circle K, and later (b) Director of Programs & Administration for NWF[,which] is and 25 was responsible for the administration of Circle K’s wholesale fuel sales contracts in the 26 United States.” Dunten Decl. ¶ 2. Ms. Dunten also states that she “previously reviewed 27 the contracts and records for Plaintiffs Staffing and Management Group Inc. [] (and its 28 predecessor in interest Mohammad Bahour [], HB Fuel, Inc. [] (and its predecessor in 1 interest Hamid Kalhor [], and Windy Cove, Inc. [] regarding their related stations and 2 agreements” and has personal knowledge of the following: 3 4 11. Windy Cove began to purchase Mobil branded fuel from Circle K in February 2012. Circle K delivered the fuel and charged Windy Cove the 5 standard delivered price for fuel that Circle K charged to all of its other dealers 6 in San Diego County for Mobil branded fuel. Windy Cove paid Circle K for the fuel. 7

8 …

9 12. In June 2013, before Mr. Bahour (Staffing’s principal) and Mr. Kalhor 10 (HB Fuel’s principal) purchased their stations, Circle K began to sell Mobil branded fuel to both franchisees (as ExxonMobil was no longer doing so). 11 Circle K has continued to sell Mobil branded fuel to those dealers, and later 12 to their related entities Staffing and HB Fuel, to the present day. Circle K delivered the fuel and charged Mr. Bahour and Mr. Kalhor (or their related 13 entities, Staffing and HB Fuel, respectively) the standard price for delivered 14 fuel that Circle K charged to all of its other dealers in Los Angeles and Orange counties. Mr. Bahour and Mr. Kalhor paid Circle K for the fuel Circle K 15 delivered. . . . 16 17 Id. ¶¶ 6, 11–12. Plaintiffs provide no evidence to the contrary. The Court concludes no 18 genuine dispute exists over whether the price term for Plaintiff was the “price in effect.” 19 See Cal. Comm. Code 2305(2). 20 Accordingly, Defendant Circle K is entitled to a presumption that its prices were 21 set in good faith. See Citgo Petroleum Corp. v. U.S. Lubes, LLC, 2014 WL 3887773, at 22 *4 (E.D. Penn. 2014) (finding that because there was no dispute that the defendant 23 charged the plaintiff its price in effect on the date of shipment, the defendant’s price was 24 presumed to be a good faith price). The question, then, is whether there is evidence that 25 Defendant Circle K’s prices were not “commercially reasonable” or that Defendant 26 engaged in price discrimination, such that Plaintiff can rebut the safe harbor presumption 27 that Defendant’s prices were set in good faith. Plaintiffs challenge the presumption on 28 both grounds. See Doc. No. 131-1. 1 i. Commercially Reasonable Prices 2 As to whether Defendant Circle K’s prices were commercially reasonable, 3 [A] plaintiff bears the burden of establishing that a seller defendant set a 4 commercially unreasonable price term. Tom-Lin Enters. v. Sunoco, Inc., 349 5 F.3d 277, 282 (6th Cir. 2003). In a Section 2-305 action, evidence of how the seller defendant’s prices compared with other sellers in the same market is 6 critical to determining commercial unreasonableness. Schwartz v. Sun Co., 7 276 F.3d 900, 905 (6th Cir. Mich. 2002). A plaintiff who fails to produce such evidence has failed to establish a prima facie case on the point. Id. In 8 order to survive summary judgment then, Ashwood must produce evidence of 9 Exxon’s competitor’s prices in the relevant market. See id.; Atl. Autocare, Inc. v. Shell Oil Prods. Co. LLC, 605 F. Supp. 2d 463, 472 (S.D.N.Y. 2009). 10

11 JOC Inc. v. ExxonMobil Oil Corporation, No. 08-5344 (SRC), 2013 WL 12159044, at 12 *19 (D.N.J. Jan. 22, 2013). 13 Plaintiff argues that “[w]here there is evidence that those in same class of trade are 14 pricing differently (here wholesale distributors) from [Defendant]’s pricing formula, then 15 [Defendant]’s practices do not fit within the “normal case” requirement for application of 16 the “safe harbor.” Doc. No. 131-1 at 25 (citations omitted). Defendant argues that the 17 relevant inquiry is whether Defendant’s prices fall within the range of prices charged by 18 other distributors, see Doc. No. 119 at 19 (citation omitted), and not the manner in which 19 the prices charged were determined, see Doc. No. 167 at 4–6. 20 As noted above, Plaintiffs acknowledge that an objective bad faith standard applies 21 to the instant dispute. Doc. No. 155 at 18. Nevertheless, Plaintiffs urge that Defendant’s 22 Circle K’s pricing methodology is relevant to a commercial reasonableness inquiry under 23 an objective bad faith standard. See Doc. No. 131-1 at 18–25. As support, Plaintiffs cite 24 Allapattah Servs., Inc. v. Exxon Corp., 61 F. Supp. 2d 1308 (S.D. Fla. 1999); Wayman v. 25 Amoco Oil Co., 923 F. Supp. 1322, 1348–49 (Kans. 1996), aff’d, 145 F.3d 1347 (10th 26 Cir. 1998); Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283, 290 (4th Cir. 1998); 27 Bapasn, Inc. v. Equilon Enterprises, 2014 WL 4087227, at *3 (N.D. Ill. Aug. 19, 2014); 28 ConSeal Int’l, Inc. v. Neogen Corp, 488 F.Supp.3d 1257, 1277 (S.D. Fla. 2020). 1 Outside of Allapattah, these cases do not support Plaintiffs’ argument that pricing 2 methodology is relevant to an objective bad faith inquiry. And Allapattah considered 3 pricing methodology in the context of a subjective bad faith analysis under UCC § 2305. 4 See Allapattah Servs., 61 F. Supp. 2d. at 1324 (concluding there was a triable issue of 5 fact as to whether Exxon’s prices were commercially reasonable because “Plaintiffs 6 specifically claim that Exxon exercised bad faith based on Exxon’s plan to double charge 7 for the purpose of running the “non-keeper” dealers out of business. Courts have 8 considered whether a contracting party implemented a policy as an underhanded attempt 9 to drive an individual dealer out of business to determine if that party acted in bad faith 10 contrary to well-established tenets of contract law”). 11 Allowing pricing methodology to form the basis of an objective bad faith inquiry 12 would “eviscerate the safe harbor in any action in which the plaintiff alleges 13 circumstantial evidence of an improper motive, leading to drawn-out litigation ‘even if 14 the prices ultimately charged were undisputedly within the range of those charged 15 throughout the industry.’” See Casserlie v. Shell Oil Co.,121 Ohio St. 3d 55, 59 (2009) 16 (quoting HRN, 144 S.W.3d at 435; then citing Berry, Byers, & Oates, Open Price 17 Agreements: Good Faith Pricing in the Franchise Relationship (2007), 27 Franchise L.J. 18 45, 49)). The Court finds the Eleventh Circuit’s unpublished opinion in Autry Petroleum 19 Co. v. BP Products North America, Inc., 334 Fed. App’x 982 (11th Cir. 2009) instructive: 20 Although the UCC provides no definition of the “normal case” contemplated 21 by comment 3, we accept that the draftsmen of the UCC intended that the safe 22 harbor created by the normal case good faith presumption apply broadly lest every price set pursuant to an open-price term be vulnerable to attack and 23 subject to litigation. See Walter D. Malcolm, The Proposed Commercial 24 Code: A Report on Developments from May 1950 through February 1951, 6 Bus. Law. 113, 185–186 (1950–51). 25

26 The draftsmen sought to avoid imposing on the open-price-term setter the burden of establishing the reasonableness of the price set; the open-price 27 term provision was crafted to insulate posted prices and the like from 28 reasonableness review provided the price imposed was not discriminatory. 1 See id.; Wayman v. Amoco Oil Co., 923 F. Supp. 1322, 1346–47 (D. Kan. 1996) (“It is abundantly clear . . . that the chief concern of the UCC Drafting 2 Committee in adopting § 2–305(2) was to prevent discriminatory pricing— 3 i.e., to prevent suppliers from charging two buyers with identical pricing provisions . . . different prices for arbitrary or discriminatory reasons.”) 4 (emphasis in original). 5 6 Autry Petroleum Co. v. BP Products North America, Inc., 334 Fed. App’x 982, 985 (11th 7 Cir. 2009). With this in mind, the Court concludes that pricing methodology is not 8 relevant to an objective bad faith inquiry; the relevant inquiry for assessing commercial 9 reasonableness under § 2305(2) is whether Circle K’s prices fall in the range of prices 10 charged by other competitors. 11 The next question, then, is what competitors constitute the appropriate comparators 12 to Defendant Circle K. Plaintiffs urge that only those in the “same class of trade” as 13 Defendant—that is, other distributors—should be considered in price comparisons. See 14 Doc. No. 131-1 at 7. Defendant argues that the appropriate range includes all sellers in 15 the market, including wholesale distributors and refiners. See Doc. No. 119 at 20–25. 16 Even assuming arguendo that the appropriate comparison is only between Defendant’s 17 prices and the prices of other wholesalers, Plaintiffs’ evidence regarding Defendant 18 Circle K’s prices and the prices of other wholesalers is not sufficient to create a genuine 19 issue of material fact. 20 As to whether Defendant’s prices were “in the range” of other competitor’s prices, 21 Plaintiffs rely on Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283, 290 (4th Cir. 1998) 22 for the proposition that “in the range” means “competitive with other wholesalers . . . 23 being in the ‘middle of the pack’ of all [gasoline] wholesalers in the area.” Doc. No. 131- 24 1 at 21. But nowhere did the court in Havird state that pricing must be “in the middle of 25 the pack” in order to satisfy the “in the range” standard. And Plaintiffs do not offer, and 26 the Court has not found, any case extrapolating that rule from Havird. Nor has the Court 27 found any other case law that supports Plaintiffs’ “middle of the pack” rule statement. 28 The Court has scoured case law regarding open price term contracts and has found 1 no authority purporting to offer a precise definition of what “in the range” means in the 2 context of a UCC § 2-305 commercial reasonableness inquiry. This is unsurprising given 3 that “in the range” is part of a reasonableness standard, which is, by design, a fact- 4 intensive inquiry specific to each case. In any event, the Court is satisfied that Plaintiffs’ 5 proposed definition is too narrowly drawn. The Court follows the majority of decisions, 6 which suggest a commercially reasonable price is one within the range of prices charged 7 by other competitors in the relevant market. See HRN, Inc.,144 S.W. 3d at 434 (“[The 8 majority of decisions suggest that a commercially reasonable DTW price, that is, one 9 within the range of DTW prices charged by other refiners in the market, is a good faith 10 price under section 2.305 absent some evidence that the refiner used pricing to 11 discriminate among its purchasers.”) (first citing Tom-Lin Enters., Inc. v. Sunoco, Inc., 12 349 F.3d 277, 281–83 (6th Cir. 2003); then citing Havird Oil Co., 149 F.3d at 290–91; 13 Richard Short Oil Co. v. Texaco, Inc., 799 F.2d 415, 422 (8th Cir. 1986); then citing 14 Wayman, 923 F. Supp. at 1332, aff’d mem., 145 F.3d 1347 (10th Cir. 1998); then citing 15 T.A.M., Inc. v. Gulf Oil Corp., 553 F. Supp. 499, 509 (E.D. Pa. 1982)); then citing Adams 16 v. G.J. Creel & Sons, Inc., 320 S.C. 274, 465 S.E.2d 84, 86 (S.C. 1995)); see also HRN, 17 144 S.W.3d at 437 (“Good faith under [U.C.C. § 2-305] does not mandate a competitive 18 price for each individual Dealer, nor could it. The competitive circumstances of each 19 Dealer in the same pricing zone may vary from station to station, and yet Shell must treat 20 them all the same.”); Citgo Petroleum Corp., 2014 WL 3887773, at *4 (citing HRN, Inc., 21 144 S.W.3d at 437) (“Evidence of difficulty competing is not sufficient to show that a 22 price is not within the range of commercially reasonable prices.”). 23 With this in mind, the Court turns to the evidence offered by Plaintiffs. In this 24 Section 2305 action, Plaintiffs bear the burden of establishing that Defendant set a 25 commercially unreasonable price term. JOC Inc., 2013 WL 12159044, at *19 (citing 26 Tom-Lin Enters., 349 F.3d at 282). “In order to survive summary judgment then, 27 [plaintiffs] must produce evidence of [defendant’s] competitor’s prices in the relevant 28 market. JOC Inc., 2013 WL 12159044, at *19 (first citing Schwartz v. Sun Co., 276 F.3d 1 900, 905 (6th Cir. 2002); then citing Atl. Autocare, Inc. v. Shell Oil Prods. Co. LLC, 605 2 F. Supp. 2d 463, 472 (S.D.N.Y. 2009)). Plaintiffs have not done so here. 3 Plaintiffs point to the following: “[a]s part of her analysis, Ms. Luna compared the 4 prices of to the prices of [Defendant], and also compared the prices of to 5 the prices of [Defendant]” and concluded that Defendant’s “prices were around 6 per gallon.” Doc. No. 131-1 at 22–24 (citing PSS at No. 61–63 (itself citing Doc. 7 No. Doc. No. 131-19 (“Luna Report”)).7 Plaintiffs also urge, regarding the tables 8 prepared by Plaintiffs’ counsel as part of the brief in opposition to Defendant’s motion 9 for summary judgment, “As shown in Tables 1 through 5, whether comparing 10 [Defendant]’s prices to all majors, average rack prices in OPIS, or the prices of other 11 Mobil Fuel distributors, [Defendant]’s prices are not in the middle of the pack in order to 12 be ‘in the range.’” Doc. No. 155 at 29. 13 As noted above, the tables in Plaintiffs’ opposition brief to Defendant’s motion for 14 summary judgment are not evidence. See Estrella, 682 F.2d at 819–20. But even if the 15 Court relies on the tables in Plaintiffs’ brief to help understand the evidence upon which 16 the tables are based, Dr. Luna’s price comparison and the exhibits upon which Plaintiffs’ 17 Tables 1–4 rely upon are not sufficient to create a genuine issue of material fact. First, 18 Dr. Luna is not a liability expert; she is a damages expert who does not opine on whether 19 Defendant’s prices were commercially reasonable. Doc. No. 122-5 (“Luna Report”) at 6 20 (“For the purposes of my assignment, I am assuming that the Defendants will be found 21 liable for the claims alleged herein and, unless otherwise specified, I offer no opinion 22 regarding Defendants’ liability. My report and analysis focus on Plaintiffs’ damages 23 relating to CK’s pricing of Mobil brand gasoline to the Plaintiff.”). 24 Next, while the Court has reviewed the Exhibits that seemingly contain pricing 25 26 27 7 The Court notes that, regarding Plaintiffs’ Fact 61, Defendant responds, “disputed as written in that the cited evidence does not show an actual calculation and conclusion of per gallon. Doc. 28 1 data, Plaintiffs provide no evidence regarding the import of the exhibits. Understanding 2 and extrapolating information from the data in these exhibits are precisely the realm of 3 the expert: Exhibit 28 is 143 pages of “price details” emails, Doc. 155-23; 4 Exhibit 31 is 718 pages of OPIS pricing reports, Doc. No. 155-24; and Exhibit 36 is 28 5 pages of Lundberg Survey reports, Doc. No. 155-27. The exhibits require expertise to 6 understand their meaning and relevancy to this case; phrases such as “OPIS GROSS 7 CARFG ETHANOL (10%) PRICES WITH CAR COST”, “CAP-AT-THE-RACK”, and 8 “OPIS GROSS CARB ULTRA LOW SULFUR DISTILLATE PRICES WITH CAR 9 COST” are meaningless without an expert to interpret them, to say nothing of the 10 expertise required to meaningfully analyze years of pricing information contained in 11 hundreds of pages of information. See Doc. No. 155-24 at 2; see also Doc. No. 155-27 at 12 4 (containing columns labeled “unleaded change”, “percentage oxygenate” and “vapor 13 pressure”). Moreover, by Plaintiffs’ own argument, the ultimate summation of this 14 evidence is that Defendant’s prices were not “in the middle of the pack.” See Doc. 15 No. 131-1 at 20–24; Doc. No. 155 at 23–30. But, as noted above, the law does not 16 require Defendant’s prices to be “in the middle of the pack.” 17 Based on the foregoing, the Court finds that Plaintiffs have not met their burden of 18 “produc[ing] evidence of [defendant’s] competitor’s prices in the relevant market” such 19 that there is a genuine issue of material fact as to whether Defendant’s prices were “in the 20 range” of prices charged by competitors in the relevant market. JOC Inc., 2013 WL 21 12159044, at *19 (citations omitted).8 22 23 24 25 8 The Court notes that even if the Court considered the invoices provided in Exhibit 19 26 and related Table 5 in Plaintiffs’ brief in opposition to Defendant’s motion for summary judgment, the outcome would not change. Exhibit 19 shares the same problem as Exhibit 28, 31, and 36; it is fifty- 27 four (54) pages of years of data without expert evidence purporting to interpret it. Doc. No. 131-16. And even viewing these documents in Plaintiffs’ favor, they only tend to show that Defendant’s prices 28 1 ii. Price Discrimination 2 Plaintiffs argue that California Business and Professions Code § 21200, “sets forth 3 what constitutes price discrimination.” Doc. No. 155 at 20. Section 21200 states, in 4 relevant part: 5 It is unlawful for any refiner, distributor, manufacturer, or transporter of motor 6 vehicle fuels or oils engaged in business in this state, either directly or 7 indirectly, to discriminate in price between different purchasers of motor vehicle fuels or oils of like grade and quality, where the effect of such 8 discrimination is to lessen competition, or to injure, destroy, or prevent 9 competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customer of either of them. 10

11 Cal. Bus. & Professions Code § 21200 (emphasis added). 12 Plaintiffs urge that price discrimination takes this case outside of the “normal 13 case.” See Doc. No. 131-3 at 26–27. Specifically, Plaintiffs argue Defendant Circle K 14 engaged in price discrimination because Defendant set a “sales price” or transfer price” 15 for its own COOPs that was lower than the price charged to Plaintiffs. See id. at 26. 16 However, Defendant Circle K presents evidence it never sold gas to its own 17 stations. In particular, Defendant Circle K provides a Declaration from George Wilkins, 18 “Vice President for Circle K Stores Inc’s [ ] West Coast Business Unit which is 19 responsible for Circle K’s operations in Southern California, including the operation of 20 Circle K’s company operates stores in Southern California.” Doc. No. 119-53 (“Wilkins 21 Decl.”) ¶ 2. In his Declaration, Wilkins states, 22

23 3. . . . Circle K sells fuel to dealers and also operates its own company 24 operated (“COOP”) stores in Southern California. The COOP stores are not separate entities or companies from Circle K. Rather Circle K operates the 25 COOP stores using its own employees and acquires land either by buying or 26 leasing them from third parties.

27 4. There are no contracts or leases between Circle K and the COOP stores 28 concerning the purchase and sale of fuel. Again, Circle K and the COOP 1 stores are not different entities. Specifically, Circle K does not sell or transfer fuel to the COOP stores. Instead, for its retail operations Circle K uses the 2 fuel it buys and then Circle K sells that fuel using its employees at the stations 3 Circle K operates (i.e., the COOP stores).

4 5 Wilkins Decl. ¶¶ 3–4. 6 Plaintiffs offer no evidence to the contrary. See Doc. No. 171-1 (“P. Resp to 7 DSS”) at No. 3.9 But by the plain language of this statute, there must be “different 8 purchasers of motors fuels or oils of like grade and quality.” See Cal. Bus. & Prof. Code 9 § 21200 (emphasis added). Thus, Plaintiffs cannot prevail on this claim because they 10 offer no evidence regarding the prices charged to different purchasers of motor fuels or 11 oils. 12 iii. Conclusion 13 For the reasons stated above, the Court GRANTS Defendant’s motion for 14 summary judgment and DENIES Plaintiffs’ cross-motion for partial summary judgment. 15 See HRN, Inc., 144 S.W.3d at 436 (citing Tom-Lin Enters., Inc., 349 F.3d at 281–83; 16 Havird Oil Co., 149 F.3d at 290–91; Richard Short Oil Co., 799 F.2d at 422; Wayman, 17 923 F. Supp. at 1332; T.A.M., Inc., 553 F. Supp. at 509 (E.D. Pa. 1982); Adams, 465 18 S.E.2d at 86) (“Here the Dealers’ claim of bad faith appears to be inextricably tied to the 19 amount of the price set by Shell. We agree with those decisions that have upheld the 20 posted price presumption against similar attacks. Applying that presumption, these 21 courts have generally rendered judgment as a matter of law on similar claims under 22

23 9 In Defendant’s Fact 3, Defendant states, “The COOP stores are not separate entities or companies from 24 Circle K. Rather Circle K operates the COOP stores using its own employees and acquires land either 25 by buying or leasing them from third parties.” DSS at No. 3 (first citing Doc. No. 120-51 (“Wilkins Decl.”) ¶¶ 3–4; then citing Doc. No. 148-14 (“Fry Decl,”) ¶¶ 6–7)). Plaintiffs dispute the fact on the 26 basis that it is “Irrelevant. Whether COOP stores are separate entities or not is irrelevant to whether Circle K sets its prices in a commercially reasonable manner, nor does this fact establish that Circle K 27 was not a wholesale distributor of the same fuel that it sold to the Dealers and which Circle K sold at its own company owned and operated stations.” Doc. No. 171-1 (“P. Resp to DSS”) at No. 3. This is not a 28 1 section 2-305 where the refiner used a posted price which it fairly applied to similarly- 2 situated purchasers.”); see also Wayman, 923 F. Supp. at 135 (“So long as this is a 3 ‘normal case’--and the court has determined that it is—[the defendant’s] ‘price in effect’ 4 satisfies its good faith obligations under UCC § 2-305(2).”). 5 3. Claim 2 6 Defendant moves for summary judgment as to Plaintiffs’ Claim 2 for declaratory 7 relief. Doc. No. 120-1 at 25. Both parties agree that Claim 2 depends on Claim 1. See 8 id.; Doc. No. 155 at 30. Accordingly, because the Court has found Defendant is entitled 9 to summary judgment as to Claim 1, the Court GRANTS Defendant’s motion for 10 summary judgment on Claim 2 11 4. Claim 3 12 Defendant moves for summary judgment as to Plaintiffs’ Claim 3 for unfair 13 business practices in violation of California Business and Professions Code § 17200, et 14 seq. See Doc. No. 120-1 at 25–26. Defendant argues that Plaintiffs’ third cause of action 15 “depend[s] upon Plaintiffs being able to establish that they have terminated their 16 contracts ‘due to’ a material breach of contract by Circle K (here as to its fuel prices).” 17 Doc. No. 119 at 26. 18 In their First Amended Complaint, Plaintiffs allege that “Defendant, ExxonMobil, 19 and each authorized Distributor of ExxonMobil branded gasoline in California have 20 agreed expressly and/or impliedly and conspired among each other, to divide and allocate 21 Dealers selling ExxonMobil branded gasoline among ExxonMobil branded Distributors 22 in California.” FAC ¶ 36. To the extent Plaintiffs’ UCL claim hinges upon Defendant’s 23 material breach of contract, the claim must fail as Plaintiffs’ only claim for breach of 24 contract (Claim 1) has not survived summary judgment. 25 In their opposition to Defendant’s motion for summary judgment, Plaintiffs urge 26 that “the facts are in dispute regarding which party or parties need to provide consent 27 before a change of distributor is approved, and since the facts are in dispute regarding 28 policies and statements made to the Dealers when they tried to terminate the Gasoline 1 Agreements and secure a new distributor, it would be improper to grant partial summary 2 judgement on the unfair business practices claim.” Doc. No. 155 at 30–31. However, 3 Plaintiffs present no evidence regarding these purported factual disputes. See id. at 30. 4 Accordingly, the Court GRANTS Defendant’s motion for summary judgment. 5 5. Defendant’s Counterclaim 6 Defendant moves for summary judgment on its counterclaim for declaratory relief 7 pursuant to 28 U.S.C. § 2201 against Plaintiffs Windy Cove, Staffing, Mohammad 8 Bahour, Hamid Kalhor, and HB Fuel. See Doc. No. 119 at 28 & 28 fn.17; see also Doc. 9 No. 116 ¶¶ 69–75. In particular, Defendant seeks a judgment declaring that Circle K is 10 setting its price in good faith. Id. ¶ 75. Plaintiffs and Counterclaim-Defendants did not 11 address Defendant’s counterclaim in their briefing. 12 The Declaratory Judgment Act provides that “[i]n a case of actual controversy 13 within its jurisdiction,” federal courts “may declare the rights and other legal relations of 14 any interested party seeking such declaration, whether or not further relief is or could be 15 sought.” 28 U.S.C. § 2201(a). An actual case or controversy must exist, ripe for 16 determination, and thus lie within the court’s jurisdiction under Article III of the 17 Constitution. See Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 669 (9th Cir. 2005). 18 The court must then decide whether to exercise jurisdiction over the dispute. See Am. 19 States Ins. Co. v. Kearns, 15 F.3d 142, 143–44 (9th Cir. 1994). Here, Plaintiffs and 20 Counterclaim-Defendants do not challenge the reviewability of Defendant’s 21 counterclaim. Moreover, the Court finds the contract dispute between the parties to be an 22 actual dispute “that is sufficiently immediate to warrant the issuance of a declaratory 23 judgment,” Principal Life Ins. Co., 394 F.3d at 672, and finds it appropriate to entertain 24 Defendant’s counterclaim. 25 The Ninth Circuit determined that “[d]eclaratory relief is appropriate (1) when the 26 judgment will serve a useful purpose in clarifying and settling the legal relations in issue, 27 and (2) when it will terminate and afford relief from the uncertainty, insecurity, and 28 controversy giving rise to the proceeding.” Eureka Federal Sav. & Loan Asso. v. 1 American Cas. Co., 873 F.2d 229, 231 (9th Cir. 1989). The Court finds those elements 2 have been met here. Consistent with the above analysis, the Court concludes that there is 3 no genuine issue of material fact as to whether the safe harbor presumption applies. 4 Accordingly, the Court GRANTS Defendant’s motion for summary judgment as to its 5 counterclaim and DECLARES that, with respect Plaintiffs and Counterclaim-Defendants 6 Windy Cove, Staffing, and HB Fuel and Counterclaim-Defendants Mohammad Bahour 7 and Hamid Kalhor, Circle K has set its pricing in good faith.10 9 In light of the foregoing, the Court ORDERS as follows: 10 • The Court GRANTS Defendant’s motion for summary judgment as to Claims 11 1, 2, and 3, and Counterclaim 1; 12 • The Court DENIES Plaintiffs’ motion for partial summary judgment; 13 • The Court DENIES Plaintiffs’ Daubert motion as to Dr. Umbeck; 14 • The Court GRANTS Defendant’s Daubert motion as to Mr. Maday; 15 • The Court DECLINES to rule on Defendant’s Daubert motions as to Dr. Luna 16 and Mr. Boedeker. 17 • The Court DIRECTS the Clerk of Court to enter judgment in Defendant’s 18 favor and close this case. 19 The Court further DIRECTS the Clerk of Court to file this Order under seal.11 20 “Unless a particular court record is one ‘traditionally kept secret,’ a ‘strong presumption 21 in favor of access is the starting point.” Kamakana v. City and Cnty. of Honolulu, 447 22 F.3d 1172, 1178 (9th Cir. 2006) (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 23 F.3d 1122, 1135 (9th Cir. 2003)). The Court finds that compelling reasons do not justify 24 25

26 10 The Court concludes that, on this record, Defendant is not entitled to summary judgment on its thirty- 27 first affirmative defense and is also not entitled to summary judgment on the additional requests declaratory relief. See Doc. No. 116 ¶¶ 31, 75. 28 1 || maintaining the entirety of the Order under seal. See Ctr. for Auto Safety v. Chrysler 2 || Grp., LLC, 809 F.3d 1092 (9th Cir. 2016). □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ 3 || HexetennemthenQudes, 4 5 || □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□ tres □□□□□□□ 6 || □□□□□□□□□□□□□□□□□□□□□□□□□□ casa eisai eHOSG Oi CRSE OHHEREOM, 7 8 10 Dated: September 7, 2023 : Mihuh! MM (hills 12 HON. MICHAEL M. ANELLO 13 United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28