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Claxton v. Kum & Go, L.C.

United States District Court, W.D. Missouri, Southern Division

June 11, 2015

COLTON CLAXTON, individually and on behalf of all others similarly situated, Plaintiff,
v.
KUM & GO, L.C. d/b/a KUM & GO, Defendant.

ORDER

DOUGLAS HARPOOL, District Judge.

Before the Court is Plaintiff's "Unopposed Motion for Approval of Class Action Settlement and Award of Attorneys' Fees, Costs and Expenses, Incentive Award, and Suggestions in Support." (Doc. 44). Plaintiff informs the Court that, through mediation and other negotiation, the parties have reached a settlement agreement. The Settlement Agreement is filed as an exhibit to Plaintiff's motion. Plaintiff now moves the Court to conditionally certify a settlement only class, to appoint class counsel, to preliminarily approve the parties' settlement, to approve the proposed notice plan, and to set a fairness hearing.

The Court deferred ruling on Plaintiff's unopposed motion until such time as Plaintiff provided additional briefing on the issue of class certification under Federal Rule of Civil Procedure 23, as required by Amchem Products, Inc. v. Windsor, 521 U.S. 591, 619-22 (1997). Plaintiff provided such briefing and the Court held a hearing on Plaintiff's motion. Following the hearing, the parties filed a joint report addressing several concerns expressed by the Court. The matter is now ripe for review. Upon full and careful consideration, the Court hereby GRANTS Plaintiff's unopposed motion (Doc. 44).

BACKGROUND

On July 23, 2014 an investigator from the Missouri Division of Weights and Measures responded to a complaint of regular unleaded and number two diesel fuel cross-contamination at Kum & Go store number 473 (ID# 1889) located at 620 North National, Springfield Missouri 65802. The investigator interviewed employees from Kum & Go and Broyles Petroleum Equipment, and his investigation turned up the following information. On July 17, 2014 at approximately 1:49 p.m., Kum & Go received a product delivery from Solar Transport including approximately 4, 001 gallons of regular unleaded fuel and 4, 004 gallons of undyed ultra low sulfur number two diesel fuel. At some point thereafter, Kum & Go began receiving complaints of cross contaminated fuel. Kum & Go contacted Broyles Petroleum Equipment and Solar Transport to pump out the tanks and flush out the product lines. During the process of removing the product from the diesel tank, the product level in the unleaded tank also began dropping. It was determined that an old 2" "siphon bar manifold" piping system existed between the regular unleaded and number two diesel fuel tanks. The siphon appears to have been "activated" when the regular unleaded tank was filled nearly to capacity, which allowed the unleaded product to migrate to the diesel tank creating a siphon effect; as the unleaded product level in the tank lowered, the siphon reversed and allowed the number two diesel and unleaded mixture to then migrate to the regular unleaded tank.

Discovery shows that suspected "cross-drops" occurred on one occasion in May of 2014 and on another occasion in July of 2014. During the incident in May, three consumers came forward with drivability issues/damages. During the July incident, there were approximately 326 purchases[1] of regular unleaded fuel between the time of the fuel drop and the shutdown of the tank, and 35 consumers came forward with drivability issues/damages. Following the July incident, Defendant's agents performed substantial remediation efforts including jack hammering up the tank apparatus to remove the siphon bar manifold. After the siphon bar manifold was removed, the cross contamination problem did not recur. Defendant provided an initial claims process that it advertised through local media outlets to provide reimbursement for consumers who suffered certain losses from the contaminated fuel.

Plaintiff Colton Claxton was one of the individuals who allegedly purchased contaminated fuel. He sued Kum & Go in the Circuit Court of Green County, Missouri on behalf of himself and all other similarly situated, alleging a variety of causes of action including:

(1) violation of the MMPA, (2) breach of implied warranty of merchantability, (3) negligence, (4) strict products liability, (5) breach of the warranty of fitness for a particular purpose, and (6) breach of contract. Plaintiff alleges the unleaded fuel that he purchased from Kum & Go store number 473 on or around July 18, 2014 caused his truck to experience problems that required an engine replacement as well as catalytic converter and oxygen sensor replacement. The case was removed to federal court and, after filing various motions and conducting some discovery, the parties reached a proposed settlement.

The parties' Settlement Agreement proposes a settlement-only class. The settlement class is defined as:

All individuals and entities that purchased, from May 1, 2014 through July 31, 2014 (the "Class Period"), fuel from Defendant's Kum & Go store number 473 that, because it contained a mixture of different fuel types, did not meet specifications for sale as advertised ("affected fuel"). Excluded from the proposed class are: (1) all individuals and entities who made claims for damages caused by affected fuel and were compensated on or before February 27, 2015 as a result of the Kum & Go Original Claim Procedure that pre-dates this settlement; (2) Defendant and its officers, directors, and employees, as well as employees of any of Defendant's subsidiaries, affiliates, successors or assignees, and the immediate family members of any of these persons; (3) counsel and members of the immediate families of counsel for Plaintiff; and (4) any trial judge who may preside over this case and members of the judge's immediate family.[2]

Under the terms of the proposed Settlement Agreement, Colton Claxton is to be appointed settlement class representative, Craig Heidemann and Nathan Duncan are to be appointed settlement class counsel, and Creative Risk Solutions is to be approved as the claims administrator. The proposed Settlement Agreement provides that, in consideration for a full, complete, and final settlement of the litigation, including dismissal of the litigation with prejudice and release of the claims included therein, Defendant agrees to pay: (1) Plaintiff $14, 145 for his actual damages and an incentive award, (2) each settlement class member in an amount equal to his/her actual damages supported by documentary evidence (i.e. cost of fuel, cost of repairs, cost of vehicle rental), (3) attorney fees in the amount of $45, 119, (4) court costs not to exceed $2, 000, and (5) mediator fees.

ANALYSIS

I. Conditional Certification of Settlement Only Class

When confronted with a request for settlement-only class certification, the reviewing court should give Rule 23's class certification requirements "undiluted, even heightened, attention[.]" Amchem Products, Inc. v. Windsor, 521 U.S. 591, 620 (1997). Although settlement is a relevant factor to consider, "[s]ettlement... does not inevitably signal that class-action certification should be granted more readily than it would be were the case to be litigated." Id. at 620 n. 16. In fact, due to special problems encountered with settlement only classes, "proposed settlement classes sometimes warrant more, not less, caution on the question of certification." Id. (citing the discussion in Georgine v. Amchem Products, Inc., 83 F.3d 610, 626-35 (3d Cir. 1996)). With this standard in mind, the Court turns to Rule 23(a) and (b).

A. Rule 23(a) Requirements

Rule 23(a) requires a party seeking to maintain a class action to affirmatively demonstrate numerosity, commonality, typicality, and adequacy of representation. Fed.R.Civ.P. 23(a). The moving party must do more than plead these requirements; he must be prepared to present evidentiary proof to show these requirements are, in fact, satisfied. See Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013). "[C]ertification is proper only if the trial court is satisfied, after a rigorous ...


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