KATHRYN H. VRATIL, District Judge.
This matter is before the Court on
Defendants move to exclude evidence and argument related to the sale of fuel at retail outside Kansas. Under Federal Rules of Evidence 401 and 402 they argue that such evidence is irrelevant. Under Rule 403, they argue that the danger of prejudice substantially outweighs any probative value.
Plaintiffs do not intend to offer into evidence data showing or establishing the volume, temperature or price of motor fuel sold at retail outside Kansas. But they do intend to offer evidence relating to the manner in which defendants sell fuel in other states. This evidence, they argue, is relevant to defendants' knowledge of the effect of temperature on motor fuel, which in turn is relevant to two elements of plaintiffs' claims under the Kansas Consumer Protection Act ("KCPA"): (1) whether temperature is material to motor fuel transactions and (2) whether defendants acted willfully.
To the extent that the manner in which a defendant sold fuel in another state is relevant to that defendant's knowledge or intent, it is relevant to plaintiffs' KCPA claims. Because the Court does not have before it all of the evidence which plaintiffs may attempt to offer on these issues, it reserves judgment with respect to whether any particular piece of evidence is admissible. The Court will make evidence-specific rulings as needed at trial. The Court therefore sustains Omnibus § II.A. with respect to data regarding out-of-state sales, but overrules the motion with respect to the manner in which defendants sell fuel in other states.
Defendants move to exclude testimony and evidence relating to the conduct, actions, activities, records or data of non-defendants, including defendants who have settled and therefore will not participate in trial. They argue that this evidence is irrelevant under Federal Rules of Evidence 401 and 402, and otherwise inadmissible under Rule 403.
Plaintiffs do not intend to offer evidence related to non-defendants or settling defendants who will not participate in trial. The opinions of their experts, however, rely on data related to non-defendants. Plaintiffs argue that such evidence can be the basis for expert testimony even if it would not be independently admissible. Federal Rule of Evidence 703 states as follows:
Neither party, however, has identified specific evidence which is otherwise inadmissible but which an expert will present to the jury. Without knowing which experts and what evidence are at issue, it would be premature to make a blanket determination regarding admissibility. The Court therefore overrules Omnibus § II.B.
Defendants seek to exclude evidence and argument regarding the manner in which fuel is sold at wholesale. They argue that wholesale practices are (1) irrelevant,
The fact that defendants buy fuel one way — on a temperature-adjusted basis — and sell it another — without adjusting for temperature or disclosing the effect of temperature — tends to show that temperature is a material factor in motor fuel sales, that defendants knew that temperature is material and what they intended in not disclosing the temperature or adjusting the price.
Under Rule 404(b), evidence of a prior act is not admissible "to show that on a particular occasion the person acted in accordance with the character." But prior acts are admissible for other purposes, including to prove motive, intent and knowledge. Fed. R. Evid. 404(b). Rule 404(b) therefore does not exclude evidence of the sale of fuel at wholesale to prove that defendants knew the effect of temperature on motor fuel and their intent in not disclosing that information. Defendants argue that this evidence is nevertheless inadmissible because the sale of fuel at wholesale is not substantially similar to the sale of fuel at retail. For example, different regulations apply to wholesale motor fuel sales, wholesale transactions involve larger volumes of fuel across different markets and Kansas has a lot more retail stations than wholesale terminals. Notwithstanding these differences, the sale of fuel at wholesale is substantially similar to the sale of fuel at retail in that both transactions involve the same commodity — fuel — and similar interests by the buying and selling parties. The differences defendants point out therefore go to the weight of the evidence, not its admissibility.
Defendants describe evidence regarding the sale of motor fuel at wholesale as "complex and collateral," and claim that it will "create jury confusion and distract the jurors from their charge."
Defendants move to exclude certain provisions of Handbook 130. Handbook 130 contains uniform laws and regulations in the areas of legal metrology and engine fuel quality. The National Conference of Weights and Measures adopts the contents of the handbook, and the National Institute of Standards and Technology publishes it. Kansas has not adopted all of Handbook 130 and the parties agree that the provisions of Handbook 130 that are not the law in Kansas are not relevant to this case.
Defendants specifically argue that plaintiffs' experts' testimony regarding temperature-related sales of other retail commodities under Handbook 130, such as packaged goods or vehicle tank meters, should be excluded. These provisions, defendants argue, are not substantially similar to fuel transactions made through liquid measuring devices and plaintiffs have laid no foundation as to why such a comparison would be relevant. In response, plaintiffs ask the Court to either exclude Handbook 130 entirely or to admit all portions of Handbook 130 that Kansas has adopted — including the Uniform Packaging and Labeling Regulation ("UPLR"). In support of the latter, plaintiffs contend that their experts should be allowed to testify regarding provisions of the UPLR that relate to temperature regulation of all sorts of packaged liquids sold by liquid measure, including milk, frozen orange juice, soda, beer, liquor, motor fuel, etc. Plaintiffs argue that these provisions of Handbook 130 show the materiality and importance of temperature in making a price and quantity comparison of a liquid.
Neither party directs the Court to particular expert opinions or provisions of Handbook 130. Defendants reference two of plaintiffs' experts, Richard Suiter and Constantine Cotsoradis, but have not attached their reports or pinpointed the portions of the opinions which they would like to exclude. And it is unclear whether defendants want to prevent plaintiffs' experts from opining regarding the legal effect of Handbook 130, or whether they object to the experts referencing the fact that motor fuel is just one of many liquids that Kansas law regulates in terms of temperature. Without specifics regarding what exactly the parties want to exclude, and why, the Court overrules Omnibus § II.D.
According to plaintiffs, defendants pay federal and state motor fuel excise taxes based on the number of temperature-adjusted gallons they buy at wholesale. But they pass the taxes on to consumers based on the number of non-temperature-adjusted gallons consumers purchase at retail. Defendants seek to exclude evidence and argument regarding this practice because it is irrelevant,
Plaintiffs do not intend to offer evidence of the amount of fuel taxes which each defendant paid and collected. To this extent, the Court sustains Omnibus § II.E.
Plaintiffs argue that such evidence may become relevant if defendants open the door. Specifically, plaintiffs anticipate that defendants may attempt to discredit the opinions of plaintiffs' expert Robert Reynolds because he thought that temperature adjustment and disclosure were not important while he worked in the motor fuel retail industry. If defendants do so, plaintiffs argue that they should be allowed to offer evidence that industry practices have changed,
Defendants seek to exclude evidence and argument that some former and settling defendants have placed decals on fuel dispensers which state that the pumps dispense fuel by volume, measured in gallons, and that the pumps do not adjust for variations in fuel temperature. They argue that such decals are subsequent remedial measures under Federal Rule of Evidence 407 and that their probative value is substantially outweighed by the danger of prejudice and jury confusion,
Rule 407 provides as follows:
Plaintiffs argue that Rule 407 does not exclude the decals because it does not apply to subsequent remedial measures taken by non-parties and because they anticipate that defendants will dispute whether it is legal or feasible to post decals. Rule 407 does not apply to subsequent remedial measures taken by non-parties.
Plaintiffs do not intend to offer evidence of the decals unless defendants dispute the legality or feasibility of remedial measures. Defendants do not contest that decals are feasible. It is therefore unclear whether, or under what circumstances, plaintiffs may offer the decal evidence at trial. On this record, the Court overrules Omnibus § II.F. as moot.
Defendants seek to exclude testimony by plaintiffs' rebuttal expert James Melvin, an expert in retail point-of-sale software systems, because his opinions do not rebut any of defendants' experts' opinions. Plaintiffs contend that Melvin will rebut the testimony of defendants' expert Steven Malone regarding the feasibility of implementing pumps with automatic temperature compensation ("ATC") at retail through a point-of-sale system.
According to plaintiffs, Malone has opined that no existing equipment adjusts the volume or price of motor fuel at retail, and that the cost of developing such technology would outweigh any benefits associated with it. Melvin opines that ATC equipment exists and that it is easy and inexpensive to design a point-of-sale system that adjusts the price of fuel based on changes in temperature. Thus Melvin's testimony is proper rebuttal, in that it contradicts Malone's testimony regarding the feasibility and cost of implementing ATC through a point-of-sale system.
It is unclear, however, how or when plaintiffs plan to use Melvin. They argue that "obvious case law" allows them to call a rebuttal witness in their case-in-chief. But the only case they cite on this point affirmed that a district court did not abuse its discretion in excluding rebuttal evidence that was available to plaintiff during her case in chief.
Although plaintiffs argue that they should be able to use Melvin's testimony in their case in chief, they also state that they should be allowed to use Melvin's testimony only to the extent defendants introduce evidence regarding the costs, benefits, legality or illegality of potential remedies.
Under Federal Rules of Evidence 401, 402 and 403, defendants move to exclude receipts that plaintiffs produced after the deadline for supplemental disclosures. They argue that plaintiffs disclosed the receipts too late, that the receipts are irrelevant and that they would unduly prejudice defendants.
Defendants specifically target three sets of receipts: (1) a receipt which Matthew Cook produced on September 20, 2011 for a fuel purchase at QuickTrip on October 21, 2010; (2) receipts which Zachary Wilson produced on September 20, 2011 for fuel purchases from various defendants in 2010 and 2011; and (3) receipts which Cook produced on April 11, 2012 for fuel purchases from various defendants in 2010 and 2011. Most of these receipts contain handwritten temperatures. They reflect instances where plaintiffs took the temperature of the fuel which they purchased. On October 25, 2011, plaintiffs supplemented their response to defendants' interrogatory which asked plaintiffs to admit that they did not know the temperatures of the fuel which they had purchased. The supplemental response stated that some plaintiffs had taken the temperatures of the motor fuel which they purchased.
The parties dispute whether the receipts are relevant to show that defendants have engaged in deceptive or unconscionable practices in violation of the KCPA. Defendants stress that, if plaintiffs took the temperature of the fuel when they bought it, they cannot claim that they were deceived as to the temperature of fuel which they purchased. They also argue that the receipts are irrelevant because plaintiffs produced them too late. Plaintiffs broadly argue that defendants' alleged deceptive and unconscionable practices are a continuing harm and that every fuel purchase creates a separate actionable KCPA violation. With respect to the specific receipts, plaintiffs argue more narrowly that the receipts show that the fuel which defendants sell varies in temperature.
Defendants argue that the Court should exclude the receipts under Rule 403 to prevent undue prejudice. They contend that any probative value the receipts might have would be far outweighed by the prejudice to defendants because defendants have not had a chance to conduct discovery on even the most basic aspects of the receipts, including who took the temperature, how they took it and when they took it. While this may be the basis for a motion under Federal Rule of Civil Procedure 37(c), defendants have not sufficiently explained why the late disclosure would unduly prejudice them under Federal Rule of Evidence 403. The Court therefore overrules Omnibus § II.H. based on the narrow issue that the receipts are relevant to show the temperature of motor fuel defendants sell at retail.
Defendants seek to exclude a survey by the National Institute of Standards and Technology ("NIST"), which summarizes responses to questions which NIST sent to all 50 states regarding state law. Among other things, the survey asked state regulators whether temperature compensation was permitted on retail motor fuel dispensers.
Defendants argue that to the extent the survey references conduct allowed by laws of states other than Kansas, it is inadmissible. Plaintiffs have agreed to redact the survey to exclude all information not related to Kansas.
Defendants also argue that the survey is inadmissible because it is double hearsay and consists entirely of legal conclusions. Hearsay is an out-of-court statement offered for the truth of the matter asserted.
Defendants move to exclude a staff report by the majority staff of the Domestic Policy Subcommittee of the Oversight and Government Reform Committee chaired by Representative Dennis Kucinich. The report is titled "American Consumers will pay a Hot Fuel Premium of 1.5 Billion Dollars on Regular Gasoline Purchased during the Summer 2007." Defendants contend that the report is inadmissible double hearsay and inherently untrustworthy given the obviously political nature of Congress. Plaintiffs agree. They concede that defendants' "points are well-taken; reports from political bodies are inherently susceptible to improper influence and can lack indicia of reliability."
Plaintiffs contend that if the Court excludes the staff report it should also exclude the California Energy Commission ("CEC") report titled "Fuel Delivery Temperature Study." They argue that the CEC report is also the work of a political body and that evidence suggests improper influence and questionable dealings related to the report. The Court agrees that if the CEC report is similar to the House staff report, then they should be treated similarly. Because plaintiffs' request to exclude the CEC report is not properly before the Court in this motion, the Court declines to rule on the CEC report at this time.
Under Federal Rule of Evidence 403, defendants seek to prohibit plaintiffs from using the term "standard gallon." Plaintiffs define the term as 231 cubic inches of motor fuel at 60 degrees Fahrenheit. They derive it from a technical definition of "standard" in Appendix B of Handbook 44, which provides the origin and development of units and systems of measurement.
Appendix B defines a "standard" as "a physical realization or representation of a unit." Handbook 44 (2010), App. B at B-1. A standard, "[i]n general, is not entirely independent of physical conditions, and it is a representation of the unit only under specified conditions. For example, a meter has a standard length of one meter when at some definite temperature and supported in a certain manner."
Defendants cite several cases which have excluded the use of certain terms at trial under Rule 403 because they would prejudice one of the parties or mislead the jury.
Each of the cases, however, dealt with pejorative terms which the court found had little relation to the claims or charges, or were offered to improperly inflame the jury or disparage a party's character. That is not the case here. Defendants basically object to the use of the term "standard" as shorthand for "temperature-adjusted." Defendants do not seem to dispute the technical accuracy of the term. Rather they argue that a jury may confuse the technical use of the term "standard,"
Thus defendants have not shown that the use of the term "standard gallon" would lead the jury to make a decision on an improper basis. On this record, the probative value of the term "standard gallon" is not substantially outweighed by a danger of unfair prejudice, confusing the issues or misleading the jury. Omnibus § II.J. is overruled.
Defendants seek to exclude references to the jurors as victims of defendants' conduct or as beneficiaries of the litigation. They argue that referring to jurors as victims would constitute an impermissible "Golden Rule" appeal by asking the jurors to put themselves in plaintiffs' position.
Golden Rule appeals are most closely scrutinized in the context of awarding damages.
Defendants ask the Court to exclude evidence and argument regarding alleged economic benefits to Kansas motor fuel consumers based on the damages or injunctive relief which plaintiffs seek. Their argument focuses on excluding appeals to the economic interest of jurors.
The "implied bias doctrine is not to be lightly invoked, but must be reserved for those extreme and exceptional circumstances that leave serious question whether the trial court subjected the defendant to manifestly unjust procedures resulting in a miscarriage of justice."
The Court agrees that neither party should attempt to undermine the neutrality of the jury by appealing to a potential interest in the outcome of the trial. Without a concrete question regarding particular evidence or argument, or a particular juror, the Court declines to rule on defendants' abstract concern regarding potential jury bias. The Court therefore overrules Omnibus § II.K.
Under Federal Rule of Evidence 401, defendants seek to exclude evidence and argument referring to the "oil industry," the "petroleum industry," "Big Oil," or "the like" because these terms are irrelevant to plaintiffs' claims. Defendants argue that such terms have no probative value and that plaintiffs would only use the terms to prejudice the jury. Plaintiffs agree to use the term "Big Oil" only to the extent that defendants use it. But they argue that "oil industry" and "high gasoline prices" are directly relevant to their case. For example, the oil industry's practice of using ATC at wholesale shows that temperature is material in motor fuel sales. And "high gasoline prices" are relevant because as the price of gas increases so does the cost of consumers buying warmer fuel. On this record, these terms seem relevant to plaintiffs' case and the Court finds no reason to find these terms would be unduly prejudicial.
Under Federal Rule of Evidence 401, defendants move to exclude references to defendants' financial condition or wealth because it is irrelevant. Plaintiffs counter that defendants may make their wealth an issue by arguing that the cost of injunctive relief would be too high for motor fuel retailers to bear. Thus it seems that plaintiffs intend to offer evidence of defendants' wealth only if defendants open the door.
As a general rule, evidence of a party's financial condition is inadmissible, unless it is necessary to determine damages.
Here, the parties basically dispute whether defendants will open the door to evidence of their financial condition. That is yet to be seen. The Court overrules Omnibus § II.M.
Defendants seek to exclude any representations, communications or documents between defendants represented by the same counsel or parties to a joint defense agreement. They argue that such evidence is protected by the joint-defense privilege and/or the common interest privilege, and is inadmissible under Federal Rule of Evidence 403. Defendants, however, have not identified any documents from plaintiffs' exhibit lists that are representations, communications or documents between defendants that should be excluded under the joint-defense privilege.
Plaintiffs do not anticipate the need to introduce any joint defense agreement between defendants. They do expect defendants, which are jointly represented, to make inconsistent objections to plaintiffs' evidence. For example, 7-Eleven has stipulated that certain of its business records are authentic, and only objects to the exhibits based on relevance and confidentiality. Kum & Go has raised additional objections to these same documents, including that they lack foundation and have not been authenticated. Plaintiffs argue that they should be able to reference the fact that the defendants are jointly represented, and that 7-Eleven's stipulation supersedes Kum & Go's objection. Although plaintiffs cite no authority to support their argument, it appears that defendants' joint representation could become relevant.
Defendants also argue that the Court should prohibit plaintiffs from introducing evidence of defendants being represented by the same law firm. They suggest that the only reason for doing so would be to suggest that defendants and/or their counsel conspired or otherwise engaged in improper conduct. Defendants do not cite a single case for the proposition that evidence of joint representation is inadmissible because it would permit an inference of impropriety. Moreover, the fact of joint representation will be patently obvious at trial. Defendants' suggestion that acknowledging this fact in court will interfere with their right to choose their own counsel is unsupported and frivolous.
Under Federal Rules of Evidence 403 and 408(a), defendants seek to exclude evidence of settlement negotiations or settlement agreements between plaintiffs and other defendants. Plaintiffs do not anticipate offering such settlement agreements into evidence. Recognizing that defendants could open the door to such evidence in a number of ways, the Court overrules Omnibus § II.O.
Under Federal Rules of Evidence 401 and 403, defendants seek to exclude collateral disputes and debates between counsel during discovery. They do not specify which discovery dispute or disputes they have in mind. Plaintiffs contend that it may be necessary for them to reference a discovery dispute to explain why they did not present certain evidence, but were unable to respond any more specifically given the lack of specificity in defendants' motion. Without more, the Court declines to exclude a whole category of evidence. Omnibus § II.P. is overruled.
Under Federal Rules of Evidence 403 and 404(a)(1), defendants seek to exclude evidence of awards which plaintiffs have received or contributions they have made. Plaintiffs counter that such evidence could be relevant if plaintiffs engaged in charitable work that required them to drive their vehicles and purchase motor fuel. They also argue that it could be relevant if defendants attack plaintiffs' motivation for bringing the lawsuit.
With respect to plaintiffs' charitable work, it is unclear how such evidence could be relevant. Whether plaintiffs engaged in charitable work that required them to drive their vehicles and purchase motor fuel does not make it more or less likely that defendants engaged in deceptive or unconscionable practices in violation of the KCPA. Evidence that plaintiffs used motor fuel while engaging in charitable work is therefore inadmissible. If defendants attack plaintiffs' motivation for bringing the lawsuit, the Court will determine at that time whether evidence of plaintiffs' awards and contributions is admissible. The Court sustains Omnibus § II.Q. in part.
In summary, the Court excludes the following evidence: data regarding motor fuel sales outside Kansas; information regarding the amount of motor fuel taxes each defendant paid and collected; the staff report by the majority staff of the Domestic Policy Subcommittee of the Oversight and Government Reform Committee titled "American Consumers will pay a Hot Fuel Premium of 1.5 Billion Dollars on Regular Gasoline Purchased during the Summer 2007"; and plaintiffs' participation in charitable work. The Court otherwise overrules defendants' motion.