On May 31, 2018, in Scharfstein v. BP West Coast Products, LLC, the Oregon Court of Appeals upheld a 2014 Multnomah County jury verdict (as amended by the trial court judgment) awarding $409 million dollars in statutory damages to a previously certified class of millions of Oregon consumers that were the victims of BP’s unlawful trade practices at its affiliated gas stations in Oregon. 292 Or. App. 69 (2018).
More specifically, the class claims against BP stemmed from BP’s violations of Oregon’s Unlawful Trade Practices Act (UTPA) for overcharging consumers for gas at its affiliated stations in Oregon. BP’s signage advertised the cost of its gas per gallon as a certain amount, but when consumers filled their tanks at BP’s ARCO and ampm stations, and then paid with their debit cards, they were charged an additional unlawful and undisclosed $.35 fee on top of each transaction. The false representations about the true cost of BP’s gas violated ORS 646.608(1)(u) of the UTPA, which provides that a “person engages in an unlawful practice if in the course of the person’s business, vocation or occupation the person * * * [e]ngages in any other unfair or deceptive conduct in trade or commerce.”
Pursuant to ORS 646.608(4), a private cause of action for violating the “catch all” provision of ORS 646.608(1)(u) must incorporate an associated violation of an administrative rule adopted by the Oregon Attorney General. Relevant to BP’s unlawful conduct in this case, the Attorney General had adopted numerous rules, set forth in OAR chapter 137, division 20, regulating the advertising, and mandating specific notification and display, of gas prices (Gasoline Price Advertising). At the trial stage, pursuant to ORS 646.638(1), the class plaintiff opted for statutory damages of $200 for each class member, rather than the $.35 illegal fees per transaction as actual damages. As required under ORS 646.638(8) to award statutory damages in a class case, the jury found that the class members’ ascertainable loss ($.35 card transaction fee) resulted from BP’s reckless UTPA violation.
Previously, in BP W. Coast Prods., LLP v. Ore. DOJ, 284 Or. App. 723, 725, 396 P.3d 244, 246 (2017), the Oregon Court of Appeals rejected BP’s challenge to the validity of Oregon’s Gasoline Price Advertising Rule (“Rule”).
Broadly stated, BP’s chief assignments of error were that (1) the $.35 card transaction fee did not violate the Rule because the Rule does not prohibit a flat fee that is not part of the price per gallon of gas, (2) in accordance with the Oregon Supreme Court’s holding in Pearson v. Philip Morris, Inc., 358 Or. 88, 90, 361 P.3d 3 (2015) the class should not have been certified (or should have been decertified) because ascertainable loss would have to be proven on an individualized basis through each class member proving that they acted in reliance upon BP’s gas price advertising, and (3) the award based upon $200 statutory damages per class member violated the federal Due Process Clause as it was unconstitutionally excessive.
Essentially, the Court rejected the first grouping of BP’s assignments of error because the Rule was validly enacted as previously decided by the Court in its 2017 decision regarding the Rule, and because the trial court correctly interpreted the Rule and its application to BP’s unlawful fee. The Court rejected BP’s second grouping of assignments of error because the class members’ ascertainable loss of the payment of the unlawful fees does not require that the class members prove reliance on any representation made by BP. The Court dismissed BP’s Due Process Clause challenge to the award of statutory damages as “excessive” because BP did not object to the claim for statutory damages until after the verdict had been rendered and the jury had been discharged.
In a press release after the Court of Appeals ruling was released, BP vowed to appeal the ruling in the Oregon Supreme Court: http://www.oregonlive.com/portland/index.ssf/2018/05/court_upholds_portland_jurys_4.html.
The over $409 million award is thought to be the second-largest jury verdict in Oregon history: https://lcbportland.claims/attorneys.