St. Eve upheld by 7th Circuit in dismissing Shell gas class

Steve Korris Aug. 12, 2010, 3:45am

St. Eve

CHICAGO – U.S. District Judge Amy St. Eve of Chicago correctly denied a class action over gasoline prices, Seventh Circuit appeals judges ruled on July 30.

Three judges affirmed St. Eve, formerly of Belleville, in granting summary judgment to Shell, BP North America, Citgo, Marathon and Exxon Mobil.

St. Eve and the Seventh Circuit rejected claims of Cook County resident Michael Siegel that defendants conspired since 2000 to deceive buyers and inflate prices.

Circuit Judge William Bauer wrote that Siegel failed to show he was harmed and failed to show defendants caused him harm.

"Siegel does not contend that the defendants' conduct was deceptive, does not dispute that the price he paid was clearly advertised at the gasoline station, and does not argue that he had to purchase the defendants' branded gasoline," Bauer wrote.

"We can sympathize with Siegel's contention that gasoline is expensive," he wrote.

"But absent proof that but for the defendants' conduct, he would not have purchased the defendants' gasoline, he is not entitled to relief," he wrote.

He wrote that in a deposition, Siegel said many factors affected his purchases, including necessity, price, location, quality, convenience and environmental concerns.

He wrote that Siegel bought gasoline from defendants and others, and continued buying from defendants after he believed they engaged in unfair conduct.

"According to Siegel, proof that plaintiffs purchased gasoline during a specified time period is sufficient to prove that they suffered harm based on the defendants' conduct," he wrote.

"However, Siegel cannot establish that the plaintiffs purchased gasoline for the same reason," he wrote.

Circuit Judge Diane Sykes agreed, and so did District Judge William Griesbach of Wisconsin, sitting by designation.

Siegel sued in 2005, in Cook County, proposing a national class action on conspiracy and two national class actions on unjust enrichment under tort and contract laws.

He also sought a 45 state action on deception by omission, a 21 state action on excessive pricing, and an 11 state action on unconscionable conduct.

He claimed artificial controls, not free markets, determined prices.

His complaint relied on an article that University of Wisconsin economics professor Donald Nichols wrote for the LaFollette School of Public Affairs.

It also quoted a Bill O'Reilly interview with former energy secretary Bill Richardson.

Defendants removed the suit to federal court in Chicago and moved to dismiss, arguing Siegel fell short of federal standards for pleading fraud.

St. Eve dismissed it, Siegel amended it, and defendants again moved to dismiss.

St. Eve struck allegations of misrepresentations in 2007, finding Siegel didn't explain who made them, what they were, or when, where, and how they happened.

"Plaintiffs' faint sketch of fraud is insufficient," she wrote.

She allowed allegations that defendants controlled the supply, purposely limited it, and decreased production in periods of peak demand and disruption.

She denied class certification in 2008, finding that elements of unjust enrichment and consumer fraud vary from state to state.

She wrote that "nuance in the law is important and must be respected."

She declined to apply the Illinois Consumer Fraud Act nationwide, finding that the place of purchase would govern each claim.

Siegel bounced back with a motion for class action in Illinois only, and St. Eve disposed of it last year.

"Siegel's own deposition testimony demonstrates that establishing causation for his ICFA deceptive and unfair practice claims would require the Court to make individual inquiries into the putative class members' reactions to defendants' alleged unfair and deceptive conduct," she wrote.

"Siegel stated that no one believed in the gas industry's advertising that explained their profits were not exorbitant and that he himself did not personally believe them," she wrote.

He admitted convenience was his number one factor in purchasing gasoline, she wrote.

Siegel moved for reconsideration, and St. Eve denied it last September.

Siegel appealed, and he lost.

"Siegel's own testimony that he could – and did – purchase gasoline from non-defendants undermines his claim that he had no meaningful opportunity to avoid paying the higher retail price," Bauer wrote.

Larry Drury and William Harte of Chicago filed the complaint.

The district court docket shows Ben Barnow, Blake Strautins, Erich Schork, Ilan Chorowsky, James Rowe and Sharon Harris also representing Siegel.

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