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Standard Petroleum Co. v. Faugno Acquisition, LLC

Supreme Court of Connecticut

August 28, 2018


          Argued December 14, 2017

          Mary E. R. Bartholic, with whom was Thomas W. Witherington, for the appellant (plaintiff in Docket No. SC 19874 and defendant in Docket No. SC 19875).

          John J. Morgan, for the appellees (named defendant in Docket No. SC 19874 and plaintiffs in Docket No. SC 19875).

          Palmer, McDonald, Robinson, D'Auria, Mullins and Kahn, Js. [*]

         Procedural History

         Action, in the first case, to recover damages for breach of contract, and for other relief, brought to the Superior Court in the judicial district of Fairfield and transferred to the judicial district of Stamford-Norwalk, where the defendants filed a counterclaim, and action, in the second case, to recover damages for, inter alia, breach of contract, and for other relief, brought to the Superior Court in the judicial district of Stamford-Nor-walk, where the cases were consolidated; thereafter, the court, Heller, J., granted the motions for a determination of denial of class certification filed by the plaintiff in the first action and the defendant in the second action and denied the motions for class certification filed by the named defendant in the first action and the plaintiffs in the second action; subsequently, the court, Heller, J., granted the motions for class certification filed by the named defendant in the first action and the plaintiffs in the second action, and the plaintiff in the first action and the defendant in the second action appealed; subsequently, the case was transferred to the judicial district of Hartford, Complex Litigation Docket. Affirmed.


          McDONALD, J.

         Standard Petroleum Company, the counterclaim defendant and the defendant, respectively, in the two cases that comprise this consolidated action (defendant), appeals from the trial court's orders certifying class actions against it. The class actions are premised on allegations that the defendant overcharged service station operators and franchisees for gasoline products.[1] Generally, the defendant claims that the trial court abused its discretion in certifying the class[2]because it failed to apply the ‘‘rigorous analysis'' that is required before such a certification may be granted. In particular, the defendant claims that the trial court's error is most clearly evidenced by its failure to address various elements of the causes of action and the special defenses when it determined that common issues predominated. We conclude that the defendant has failed to establish that the trial court abused its discretion in ordering class certification.

         The record reveals the following facts, assumed to be true by the trial court for purposes of the certification issues or otherwise undisputed, and procedural history. Kennynick, LLC, and Faugno Acquisition, LLC (Faugno)[3] (collectively, plaintiffs), [4] are service station operators and were franchised dealers for gasoline products supplied by the defendant, which is a wholesale supplier. In 2009, the plaintiffs commenced an action against the defendant, purportedly on behalf of themselves and other persons who had been supplied with gasoline products by the defendant. The complaint alleged that the proposed class members had been overcharged in two respects. First, it alleged that the defendant had charged class members the federal gasoline tax at a rate of 18.4 cents per gallon without applying a federal tax credit that would have had the effect of reducing that rate and that had been effective between January 1, 2005 and December 31, 2011.[5] Second, it alleged that, at all relevant times since September 27, 2004, the defendant had charged class members the Connecticut gross receipts tax on the basis of the price of gasoline as delivered, and thus had improperly charged for state tax on the defendant's profit (including the federal tax overcharge) and delivery. In reliance on these allegations, the six count complaint set forth claims of (1) breach of contract, (2) unjust enrichment, (3) violation of the Connecticut Petroleum Franchise Act, General Statutes § 42-133j et seq., (4) violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., (5) violation of the good faith requirement under the Uniform Commercial Code, General Statutes § 42a-2-305 (2), and (6) misrepresentation.[6] The plaintiffs sought relief including money damages for past losses, injunctive relief prohibiting the defendant from conduct that would cause future losses, and punitive damages.

         Shortly thereafter, the defendant commenced a separate action against one of the plaintiffs, Faugno, alleging breach of contract.[7] In response, Faugno filed a counterclaim, also styled as a proposed class action, which in all material respects mirrored the plaintiffs' complaint in the earlier action. Pursuant to the plaintiffs' motions, and in the absence of objection from the defendant, the trial court consolidated the two actions.[8]

         In 2015, after the plaintiffs had obtained compliance with discovery requests, they moved for orders certifying the action as a class action pursuant to Practice Book § 9-9.[9] The defendant filed an opposition, which included a supporting affidavit by its vice president. The trial court held a hearing on the motion and reserved decision. Thereafter, the trial court issued orders certifying a class action on all counts. The orders defined the class as ‘‘all entities or persons who: (i) purchased gasoline from [the defendant] during the period September 27, 2004 to date; (ii) were charged federal gasoline tax at a rate of 18.4 cents per gallon on such gasoline purchases; (iii) did not receive the federal . . . tax credit, while it was in effect, on such gasoline purchases; and (iv) were charged state gross receipts tax on such gasoline purchases based on the price of gasoline, as delivered.'' The orders also approved the plaintiffs as class representatives and their counsel as class counsel. The orders indicated that further articulation would follow.

         The trial court thereafter issued a memorandum of decision setting forth that articulation, which we explore in fuller detail later in this opinion. In that decision, the trial court noted that the plaintiffs had identified at least eighty-one of the defendant's gasoline customers during the relevant time period as potential members of the proposed class: forty-four had supply contracts with the defendant and thirty-seven had purchased gasoline on an as invoiced basis. With regard to those with written contracts, there were four subclasses with varied arrangements, but all contracts contained an identical provision stating that the ‘‘prices include taxes . . . which [the defendant] may be required to collect or pay pursuant to any present or future laws . . . .'' The court pointed to the fact that all of the potential class members had received invoices from the defendant. The court noted that the plaintiffs had reviewed ‘‘a ‘substantial sampling' of the more than 14, 000 invoices produced by [the defendant] in discovery'' and had represented that ‘‘the invoices appear to be almost identical to the invoices that the [plaintiffs] received for payment.'' The court addressed separately each requirement for class certification under Practice Book § 9-7, concluding that each had been satisfied. Largely in reliance on the facts and legal issues cited in that analysis, the court also concluded that each of the policy considerations under Practice Book § 9-8 weighed in favor of allowing the action to proceed as a class action.

         The defendant appealed from the orders certifying the class. See footnote 1 of this opinion. After the court issued its memorandum of decision, the defendant did not seek any further articulation.

         On appeal, the defendant contends that the trial court abused its discretion in granting class certification because it failed to apply the requisite ‘‘rigorous analysis'' to each class certification requirement. Instead, the defendant contends, the trial court merely required ‘‘ ‘some showing' '' to support each requirement, engaged in a ‘‘cursory review of the claims and evidence, '' and disregarded certain evidence, elements, and defenses. We conclude that, in light of the claims and arguments advanced to the trial court, its grant of class certification was not an abuse of discretion.


         Given the nature of the defendant's claims, a discussion of the applicable standards that guide our review takes on heightened significance. Therefore, clarifying certain aspects of these standards must be our starting point.

         ‘‘[T]he rules of practice set forth a two step process for trial courts to follow in determining whether an action or claim qualifies for class action status. First, a court must ascertain whether the four prerequisites to a class action, as specified in Practice Book § 9-7, are satisfied. These prerequisites are: (1) numerosity- that the class is too numerous to make joinder of all members feasible; (2) commonality-that the members have similar claims of law and fact; (3) typicality-that the [representative] plaintiffs' claims are typical of the claims of the class; and (4) adequacy of representation-that the interests of the class are protected adequately. . . .

         ‘‘Second, if the foregoing criteria are satisfied, the court then must evaluate whether the certification requirements of Practice Book § 9-8 [3] are satisfied. These requirements are: (1) predominance-that questions of law or fact common to the members of the class predominate over any questions affecting only individual members; and (2) superiority-that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.'' (Internal quotation marks omitted.) Neighborhood Builders, Inc. v. Madison, 294 Conn. 651, 658, 986 A.2d 278 (2010).

         It is the class action proponent's burden to prove that all of the requirements have been met. Id., 656-57. To determine whether that burden has been met, we have followed the lead of the federal courts; see General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982); directing our trial courts to undertake a ‘‘ ‘rigorous analysis.' '' Neighborhood Builders, Inc. v. Madison, supra, 294 Conn. 656; Marr v. WMX Technologies, Inc., 244 Conn. 676, 680, 711 A.2d 700 (1998); see also Collins v. Anthem Health Plans, Inc., 275 Conn. 309, 322-23, 880 A.2d 106 (2005) (‘‘[b]ecause our class certification requirements are similar to those embodied in rule 23 of the Federal Rules of Civil Procedure, and our jurisprudence governing class actions is relatively undeveloped, we look to federal case law for guidance in construing the provisions of Practice Book §§ 9-7 and 9-8'' [footnote omitted]).

         We have not previously articulated with any specificity what a ‘‘rigorous analysis'' by the trial court necessarily entails. Although some of the defendant's specific concerns are addressed in the sections that follow, there are certain overarching parameters that can be gleaned from the case law and other authoritative sources. ‘‘[A] ‘rigorous analysis' ordinarily involves looking beyond the allegations of the plaintiff's complaint. The rigorous-analysis requirement means that a class is not maintainable merely because the complaint parrots the legal requirements of the class-action rule. . . .

         ‘‘In applying the criteria for certification of a class action, the [trial] court must take the substantive allegations in the complaint as true, and consider the remaining pleadings, discovery, including interrogatory answers, relevant documents, and depositions, and any other pertinent evidence in a light favorable to the plaintiff. However, a trial court is not required to accept as true bare assertions in the complaint that class-certification prerequisites were met. . . . Class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'' (Footnotes omitted.) 59 Am. Jur. 2d 542-43, Parties § 89 (2012); accord Comcast Corp. v. Behrend, 569 U.S. 27, 33-34, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013); General Telephone Co. of the Southwest v. Falcon, supra, 457 U.S. 160-61; Collins v. Anthem Health Plans, Inc., supra, 275 Conn. 321.

         Consequently, a rigorous analysis ‘‘frequently entail[s] overlap with the merits of the plaintiff's underlying claim.'' (Internal quotation marks omitted.) Comcast Corp. v. Behrend, supra, 569 U.S. 33-34; accord In re Initial Public Offerings Securities Litigation, 471 F.3d 24, 41 (2d Cir. 2006). ‘‘In determining the propriety of a class action, [however] the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of [the class action rules] are met.'' (Internal quotation marks omitted.) Collins v. Anthem Health Plans, Inc., supra, 275 Conn. 321.

         For purposes of the present case, it is important to emphasize that although a rigorous analysis of these requirements may entail consideration of various factors, such an analysis ‘‘does not require the court to assign weight to any of the criteria listed, or to make written findings as to each factor, but merely requires the court to weigh and consider the factors and come to a reasoned conclusion as to whether a class action should be permitted for a fair adjudication of the controversy.'' 59 Am. Jur. 2d, supra, § 89, p. 543. ‘‘The trial court, [well positioned] to decide which facts and legal arguments are most important to each [rule's] requirement, possesses broad discretion to control proceedings and frame issues for consideration under [the rule]. . . . But proper discretion does not soften the rule: a class may not be certified without a finding that each . . . requirement is met.'' (Citation omitted.) In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, 310 (3d Cir. 2008).

         ‘‘Although no party has a right to proceed via the class mechanism . . . doubts regarding the propriety of class certification should be resolved in favor of certification.'' (Internal quotation marks omitted.) Collins v. Anthem Health Plans, Inc., supra, 275 Conn. 321. Even if certification is granted, ‘‘the trial court is authorized to monitor developments bearing on the propriety of its class certification orders, and to amend those orders in light of subsequent developments. . . . In the event that evidence later demonstrates that [an] alleged conflict exists, the trial court may then revisit the issue.'' (Citations omitted.) Collins v. Anthem Health Plans, Inc., 266 Conn. 12, 40, 836 A.2d 1124 (2003).

         Having clarified the standards that govern the trial court's class certification decision, we note that the standards that govern our review of that decision are well settled. ‘‘We apply an abuse of discretion standard both [to] the lower court's ultimate determination on certification of a class as well as to its rulings that the individual [class certification] requirements have been met. . . . While our review of the legal standards applied by the [trial] court and the court's other legal conclusions is de novo . . . the [trial] court's application of those standards to the facts of the case is again reviewed only for abuse of discretion . . . . This standard means that the [trial] court is empowered to make a decision-of its choosing-that falls within a range of permissible decisions, and we will only find abuse when the [trial] court's decision rests on an error of law . . . or a clearly erroneous factual finding, or . . . its decision . . . cannot be located within the range of permissible decisions.''[10] (Citations omitted; emphasis in original; internal quotation marks omitted.) Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010), cert. denied, 565 U.S. 930, 132 S.Ct. 368, 181 L.Ed.2d 234 (2011). Moreover, we afford ‘‘even greater deference when reviewing a [trial court's] decision to certify a class than when reviewing a decision declining to do so.'' (Internal quotation marks omitted.) Collins v. Anthem Health Plans, Inc., supra, 266 Conn. 23-24.

         With this legal backdrop in mind, we turn to the defendant's claims.


         Although a secondary argument by the defendant, we first dispose of the defendant's broad contention that the trial court's grant of class certification is improper under all of the prerequisites found in Practice Book § 9-7: numerosity; commonality; typicality; and adequacy of representation.[11] We are largely in agreement with the plaintiffs that the defendant's analysis of these requirements is an ‘‘unfocused, scattershot attack'' on the trial court's decision, effectively seeking de novo review. As this court previously has observed, ‘‘such wholesale attacks rarely produce results, tend to cloud the real issues, and in themselves cast doubts on the appellants' claims.'' Scribner v. O'Brien, Inc., 169 Conn. 389, 391, 363 A.2d 160 (1975). Moreover, adequate briefing requires more than conclusory assertions untethered to any specific claim. See State v. Buhl, 321 Conn. 688, 726, 138 A.3d 868 (2016) (concluding that Appellate Court properly determined that claim was inadequately briefed because ‘‘the briefing of the defendant's claims was not only short, but confusing, repetitive, and disorganized''). Nonetheless, insofar as we can glean specific arguments directed at specific requirements, we address them and conclude that none merits reversal of the trial court's decision.


         As noted previously, the requirement in Practice Book § 9-7 (1) is met where ‘‘the class is so numerous that joinder of all members is impracticable . . . .'' The defendant appears to contend that the trial court should have excluded from the certified class those customers who have arbitration or jury waiver clauses in their contracts. It contends that these customers either will be barred from participating in the action by ...

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