Alvarez v. Chevron Corporation

When a retailer’s gasoline pump conforms to relevant California consumer protection laws, the company is entitled to safe harbor from liability under the same laws.

Alvarez pursued a class action suit against the Chevron Corporation and several other oil companies in a dispute over the design of Defendants’ retail gasoline dispensers. Plaintiffs claimed that when purchasing premium grade fuel, they received between two-tenths and three-tenths of a gallon of residual fuel left in the hose from the previous transaction, and if the previous customer had purchased a lower grade of fuel, Plaintiffs would pay the premium price for the lower-grade. Plaintiffs filed claims under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL) as well as under the common law for breach of contract. Plaintiffs wanted Defendants to either post disclosures to customers or provide pumps with more accurate pricing technology. The district court granted Defendants’ 12(b)(6) motion and dismissed the case. On appeal, the Ninth Circuit agreed with the district court that Defendants had not committed any misdeeds that could be remedied in the courts. The Court noted that Defendants’ fuel pumps conform to California Department of Food and Agriculture’s Division of Measurement Standards design specifications. The fuel pumps also meet the California Environmental Protection Agency’s mandates that all retail gasoline facilities installed after 2003 use single-hose dispensers. Because Defendants’ gasoline dispensers conform to California law, they are entitled to “safe harbor” under the consumer protection statutes. The Court also dismissed Plaintiffs’ breach of contract claims because they failed to provide Defendants with reasonable notice. AFFIRMED.