Oklahoma Supremes Hold Class Action Should Be Dismissed Where Defendants Had No Legal Duty to Speak
The Oklahoma Supremes recently held that a group of defendants who had no statutory duty to reveal the presence of additives in their products could not be sued in a class action for breach of warranty, breach of contract, and violation of the state's Consumer Protection Act for not posting the amount of ethanol in their gasoline. See Rogers v. QuickTrip Corp., 2010 WL 175073 (Okla. Jan 19, 2010).
The defendants in Rogers sold gas at retail. They initially moved to dismiss, challenging the court's jurisdiction to hear the case. The Oklahoma Corporation Commission is charged with setting public energy policy and regulating the sale of gas, the defendants argued, and thus a court could not, in a class action, take actions that effectively impose upon the entire retail gas industry a duty contrary to what the Commission had decided. The court rejected this argument, noting that the Corporation Commission has no ability to award damages to individuals in private disputes. Accordingly, the court was unwilling to dismiss for lack of jurisdiction.
But the court held that the trial court erred in failing to grant the defendant's motion to dismiss on the merits. The court began by observing that a statute in effect when the suit was filed expressly stated that "retail facilities that sell motor fuel shall not be required to post information regarding fuel additives . . ." A subsequent regulation had allowed retailers to post such information about ethanol content if they wanted to.
Subsequent to plaintiffs' filing of the lawsuit, a statute required retailers to post a sign indicating "contains Ethanol" for gasolines containing more than one percent ethanol.
The Oklahoma Supremes determined that because the statutory scheme expressly allowed retailers to sell gasoline without posting its ethanol content prior to the lawsuit's filing, there could be no legal duty -- not in contract, warranty law, or in connection with the Consumer Protection Act -- that required such disclosure. The Oklahoma statute effectively preempted Oklahoma common law.
Consumer fraud claims often are premised on a failure to inform consumers of a particular fact about a product. The decision in Rogers demonstrates that where a statute gives a seller the freedom to refrain from disclosing that particular fact, the statute can trump disclosure duties that plaintiffs may assert arise from the common law or consumer protection statutes.
