Siegel v. Shell Oil Co.

In the

United States Court of Appeals

For the Seventh Circuit

No. 09-3451

M ICHAEL SIEGEL,

Plaintiff-Appellant,

v.

S HELL O IL C OMPANY,

a Delaware corporation, et al.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 1:06-cv-00035—Amy J. St. Eve, Judge.

A RGUED A PRIL 19, 2010—D ECIDED JULY 30, 2010

Before B AUER and S YKES, Circuit Judges, and G RIESBACH,

District Judge.Œ

B AUER, Circuit Judge. Michael Siegel, like many Ameri-

cans, didn’t like the price he was paying for gasoline.

So he sued five of the eight largest oil companies. Siegel

Œ

Hon. William C. Griesbach, District Judge for the Eastern

District of Wisconsin, is sitting by designation.

2 No. 09-3451

moved for class certification, seeking relief under both

the Illinois Consumer Fraud and Deceptive Business

Practices Act (“ICFA”), 815 Ill. Comp. Stat. 505/2, and the

common law doctrine of unjust enrichment. The district

court denied class certification and entered summary

judgment for the defendants. We affirm.

I. BACKGROUND

Siegel initiated this consumer class action on behalf

of himself and all others similarly situated, asserting

that the defendants acted in concert by manipulating

refinery margins and capacity to reduce the nation’s

supply of gasoline, and that this manipulation caused

him to purchase the defendants’ branded gasoline at

artificially inflated prices. Siegel testified at his deposi-

tion that he purchased gasoline out of necessity, and that

when he needed to make his purchase, he looked to

pricing, location, quality, and convenience as factors

to consider in deciding where to go, with convenience

being the number one factor in his determination. He

also testified that he continued to purchase the defen-

dants’ gasoline after he believed the defendants were

engaging in unfair conduct and that he could (and did)

purchase gasoline from non-defendants.

Instead of bringing suit under antitrust law, Siegel

brought suit under ICFA, contending the defendants’

purported manipulation of the nation’s supply of

gasoline constituted an unfair practice that resulted in

artificially inflated prices at the pump. Siegel also sought

recovery under the common law theory of unjust enrich-

No. 09-3451 3

ment, arguing that the defendants’ intentional restriction

of the nation’s supply of gasoline unjustly inflated the

price of gasoline throughout Illinois.

After first moving for certification of a nationwide

class and multi-state classes or subclasses of retail gaso-

line purchasers (which the district court denied), Siegel

moved for certification of a class comprising only Illinois

retail purchasers of gasoline, which the district court

also denied. In denying class certification, the district

court concluded that Siegel could not establish through

common proof that the allegations against the defen-

dants proximately caused harm to each member of the

putative class. This court then denied Siegel’s Fed. R. Civ.

P. 23(f) Petition for Leave to Appeal.

Then, the district court granted the defendants’ motion

for summary judgment.

Specifically, the district court held that Siegel could

not prevail under his unfair practices claim because he

failed to set forth sufficient evidence that but for the de-

fendants’ purportedly unfair conduct, he would not

have purchased their gasoline. The district court reached

its conclusion based on Siegel’s deposition testimony,

where he testified that many factors affected his gaso-

line purchases, including necessity, price, location,

quality of gasoline, convenience, and environmental

concerns, and that during the relevant time period, he

purchased gasoline from non-defendants. Further, Siegel

testified that he did not change his gasoline purchasing

habits but continued to purchase the defendants’ gasoline

even after he believed they were engaging in unfair

conduct.

4 No. 09-3451

The district court also ruled that Siegel could not

prevail on his unjust enrichment claim based on the defen-

dants’ conduct under ICFA, reasoning that because

he could not establish a private cause of action under

ICFA, unjust enrichment could not serve as the basis

for liability.

Finally, the district court entered judgment in favor of

the defendants on Siegel’s deceptive practices claim under

ICFA, his unjust enrichment claim sounding in quasi-

contract, and his civil conspiracy claim. Siegel does not

appeal these rulings.

II. DISCUSSION

ICFA “is a regulatory and remedial statute intended

to protect consumers, borrowers, and business persons

against fraud, unfair methods of competition, and other

unfair and deceptive business practices.” Robinson v.

Toyota Motor Credit Corp., 775 N.E.2d 951, 960 (Ill. 2002).

The elements of a claim under ICFA are: (1) a deceptive

or unfair act or practice by the defendant; (2) the defen-

dant’s intent that the plaintiff rely on the deceptive or

unfair practice; and (3) the unfair or deceptive practice

occurred during a course of conduct involving trade or

commerce. See id. at 960; see also Rickher v. Home Depot,

Inc., 535 F.3d 661, 665 (7th Cir. 2008).

A plaintiff is entitled to recovery under ICFA when

there is unfair or deceptive conduct. Robinson, 775

N.E.2d at 960. A plaintiff may allege that conduct is

unfair under ICFA without alleging that the conduct

No. 09-3451 5

is deceptive. Saunders v. Mich. Ave. Nat’l Bank, 662

N.E.2d 602, 608 (Ill. App. Ct. 1996). While charging an

unconscionably high price generally is insufficient to

establish a claim for unfairness, whether a practice is

unfair depends on a case-by-case analysis. Id. Robinson

adopted the three-prong test used by the Connecticut

Supreme Court in Cheshire Mortgage Service, Inc. v.

Montes, 612 A.2d 1130, 1143 (Conn. 1992), to determine

unfairness and held a defendant’s conduct must: (1) vio-

late public policy; (2) be so oppressive that the consumer

has little choice but to submit; and (3) cause consumers

substantial injury. 775 N.E.2d at 961. A court may find

unfairness even if the claim does not satisfy all three

criteria. Id. Robinson did not discuss Montes’ analysis

regarding what constitutes a substantial injury, but we

find it instructive: the injury must: (1) be substantial;

(2) not be outweighed by any countervailing benefits

to consumers or competition that the practice produces;

and (3) be an injury that consumers themselves could not

reasonably have avoided. Montes, 612 A.2d at 1147.

In addition, to prevail under ICFA, a plaintiff must

demonstrate that the defendant’s conduct is the proxi-

mate cause of the injury. Oliveira v. Amoco Oil Co., 776

N.E.2d 151, 160 (Ill. 2002) (“Unlike an action brought by

the Attorney General under [ICFA], which does not

require that ‘any person has in fact been misled,

deceived or damaged[,]’ . . . a private cause of action

brought under [ICFA] requires proof of ‘actual dam-

age.’ . . . [and] proof that the damage occurred ‘as a result

of’ the deceptive act or practice.” (citations omitted));

Oshana v. Coca-Cola Co., 472 F.3d 506, 514-15 (7th Cir.

6 No. 09-3451

2006); Avery v. State Farm Mut. Auto. Ins. Co., 835 N.E.2d

801, 861 (Ill. 2005) (“Proximate causation is an element

of all private causes of action under the Act.”). So Siegel

must set forth sufficient evidence creating a genuine

issue of material fact that “but for” the defendants’

unfair conduct, he would not have been damaged, i.e.,

he would not have purchased the defendants’ gasoline

at artificially inflated prices.

A. Class Certification

Siegel appeals the district court’s ruling denying his

motion for certification of an Illinois consumer class (and

its ruling denying his motion for reconsideration). We

review the district court’s decision to deny class certi-

fication for abuse of discretion. Payton v. County of

Carroll, 473 F.3d 845, 847 (7th Cir. 2007).

A district court may certify a class of plaintiffs if the

putative class satisfies all four requirements of Federal

Rule of Civil Procedure 23(a)—numerosity, commonality,

typicality, and adequacy of representation—and any one

of the conditions of Rule 23(b). Oshana, 472 F.3d at 513.

Under Rule 23(b)(3), a district court must determine

whether “the questions or fact common to class mem-

bers predominate over any questions affecting only

individual members, and that a class action is superior

to other available methods for fairly and efficiently ad-

judicating the controversy.”

Here, Siegel sought certification of “[a]ll purchasers

who made retail purchases of any Defendants’ branded

No. 09-3451 7

gasoline in Illinois during the period from and including

December 2, 2000, through and including September 5,

2008.” Without needing to address the Rule 23(a) re-

quirements, the district court denied class certification

finding that Siegel failed to demonstrate that common

class issues predominated over individual issues under

Rule 23(b)(3). In reaching this decision, the district court

focused on the elements of an ICFA claim and con-

cluded that it would be required to make individual

determinations concerning why a plaintiff bought gaso-

line from a particular supplier (e.g., price, necessity,

convenience, location, or quality of gasoline) to discern

whether the defendants’ conduct proximately caused

each plaintiff’s injuries. Because of the need for individ-

ualized proof of causation, the district court held that

common class issues did not predominate.

On appeal, Siegel argues that the defendants’ unfair

conduct can readily be proven on a class-wide basis

without the need for individual determinations. He

asserts that inquiry into the circumstances surrounding

each individual class member’s gasoline purchases is not

necessary because he can establish proximate cause

through the following: “(1) Defendants conspired to

artificially raise the retail price of gasoline; (2) Plaintiff

and Class members purchased Defendants’ branded

gasoline; (3) Plaintiff and Class members had no mean-

ingful opportunity to avoid paying the higher retail price;

and (4) Plaintiff and Class members were damaged by

way of paying the higher retail gasoline prices

than they would have paid absent Defendants’ conduct.”

Pl. Br. at 18. He cites Windy City Metal Fabricators &

8 No. 09-3451

Supply, Inc. v. CIT Technical Fin., 536 F.3d 663, 672 (7th Cir.

2008), to support his argument that proximate cause is

established merely by asserting plaintiffs suffered a loss

as a result of a defendant’s conduct.

Siegel’s arguments are not persuasive. 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. How-

ever, Siegel cannot establish that the plaintiffs pur-

chased gasoline for the same reason. Indeed, Siegel

himself has named a number of factors he considers in

determining where to purchase his gasoline. And absent

proof as to why a particular plaintiff purchased a par-

ticular brand of gasoline, Siegel cannot establish that the

defendants’ conduct caused him or her to make that

purchase. See Robinson, 775 N.E.2d at 962 (oppression

not proved because plaintiffs could have “gone else-

where” to lease a car and avoid defendant’s penalty

provisions). Siegel’s own testimony that he could—and

did—purchase gasoline from non-defendants under-

mines his claim that he “had no meaningful opportunity

to avoid paying the higher retail price,” and thus,

whether or not a class member could have avoided the

defendants’ conduct is an individualized question of

fact. Windy City is distinguishable because there we

reversed the district court after it had erroneously dis-

missed an ICFA claim under a heightened pleading

standard.

We conclude that the district court did not abuse

its discretion in determining that questions of fact com-

No. 09-3451 9

mon to class members did not predominate over any

questions affecting only individual members.

B. Unfair Practices and Unjust Enrichment

We now proceed to analyze the district court’s entry

of summary judgment against Siegel on his individual

ICFA unfair practices claim and unjust enrichment

claim sounding in tort. On appeal, Siegel does not con-

tend that the defendants’ conduct was deceptive,

does not dispute that the price he paid was clearly ad-

vertised at the gasoline station, and does not argue that

he had to purchase the defendants’ branded gasoline.

But, Siegel maintains that the defendants engaged in

unfair practices by manipulating gasoline prices and

that, as a result of the defendants’ conduct, he paid

too much for their gasoline.

Summary judgment is the “put up or shut up” moment

in a lawsuit. Johnson v. Cambridge Indus., Inc., 325 F.3d 892,

901 (7th Cir. 2003), reh’g denied. Once a party has made

a properly-supported motion for summary judgment,

the nonmoving party may not simply rest upon the

pleadings but must instead submit evidentiary mate-

rials that “set forth specific facts showing that there is

a genuine issue for trial.” Fed. R. Civ. P. 56(e). The non-

moving party must do more than simply show that there

is some metaphysical doubt as to the material facts.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.

574, 586-87 (1986). The mere existence of a scintilla of

evidence in support of the nonmoving party’s position

will be insufficient to survive a summary judgment

10 No. 09-3451

motion; there must be evidence on which the jury

could reasonably find in favor of the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). We

review the grant of summary judgment de novo. Priebe

v. Autobarn, Ltd., 240 F.3d 584, 587 (7th Cir. 2001).

We can sympathize with Siegel’s contention that gaso-

line is expensive. No one likes to pay high prices for

gasoline. Or for any commodity. But absent proof that

but for the defendants’ conduct, he would not have pur-

chased the defendants’ gasoline, he is not entitled to

relief under ICFA. While it is true that Siegel need not

establish all three criteria of unfairness under Robinson

to establish his ICFA claim, he must prove causation, i.e.,

that he was harmed and that the defendants’ conduct

caused his harm.

We conclude that Siegel does not satisfy either prong

of proximate causation: he fails to show that he was

harmed and he fails to demonstrate that the defendants’

conduct caused him harm. Even if Siegel could establish

that the defendants’ conduct was unfair, in order to

establish harm under Montes, Siegel must still show that

he suffered substantial injury, and that he could not

avoid this injury. 612 A.2d at 1147. Siegel cannot estab-

lish harm because he testified that he could (and

did) purchase gasoline from stations owned by non-

defendants, and that he continued to purchase gasoline

from the defendants even after he brought this lawsuit.

And Siegel cannot show that the defendants’ conduct

caused him to purchase their gasoline, because many

factors contributed to Siegel’s gasoline purchasing deci-

No. 09-3451 11

sion; his claim that the defendants’ conduct caused him

to purchase their gasoline at “artificially inflated prices”

is therefore undermined.

His unjust enrichment claim carries similar short-

comings. To state a cause of action based on a theory of

unjust enrichment, a plaintiff must allege that the defen-

dant has unjustly retained a benefit to the plaintiff’s

detriment, and that defendant’s retention of the benefit

violates the fundamental principles of justice, equity, and

good conscience. HPI Health Care Servs., Inc. v. Mt. Vernon

Hosp., Inc., 545 N.E.2d 672, 679 (Ill. 1989). A claim of

unjust enrichment “is not a separate cause of action that,

standing alone, will justify an action for recovery.”

Martis v. Grinnell Mut. Reinsurance Co., 905 N.E.2d 920, 928

(Ill. App. Ct. 2009). Here, Siegel’s theory of unjust enrich-

ment is based on the defendants’ conduct which he

deemed unfair under ICFA. We rejected his ICFA claim.

And absent that the defendants engaged in an unfair

practice, Siegel’s unjust enrichment claim is not viable.

See Ass’n Ben. Servs., Inc. v. Caremark RX, Inc., 493 F.3d

841, 855 (7th Cir. 2007).

III. CONCLUSION

For the reasons stated above, the denial of class cer-

tification and judgment in favor of the defendants are

A FFIRMED.

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