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HILL v. SHELL OIL CO.

October 29, 1999

DARON HILL, TYSON PARKS, CHRISTOPHER M. LAWSON, AND CARLTON REIVES, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
SHELL OIL COMPANY AND EQUILON ENTERPRISES, LLC; SHAHID HASAN, INDIVIDUALLY AND D/B/A ASHLAND AND DIVERSEY SHELL; BEYER ENTERPRISES, INC., D/B/A RIDGE DEVON SHELL; CLARK DEVON SHELL, INC.; MOHAMMED ANJAD UMER, INDIVIDUALLY AND D/B/A PETERSON WESTERN SHELL; JOHN ZYUNG, INDIVIDUALLY AND D/B/A ROSELLE SHELL; AND GIO, INC. D/B/A WESTCHESTER SHELL AND CAR WASH, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, DEFENDANTS.



The opinion of the court was delivered by: Moran, Senior District Judge.

  MEMORANDUM AND ORDER

Plaintiffs bring this lawsuit as a purported class action on behalf of all African-American customers of Shell-brand gas stations. They allege that, in Chicagoland and across the nation, Shell-brand gas stations require African-Americans to pre-pay for gasoline while allowing white customers to pay after pumping gas. Plaintiffs claim that this pattern or practice of racial discrimination violates their federally-protected civil rights. Defendants move to dismiss the complaint on a variety of grounds. For the reasons set forth below, defendants' motions are granted in part and denied in part.

BACKGROUND

I. Factual Background

Daron Hill ("Hill"), Tyson Parks ("Parks"), and Christopher M. Lawson ("Lawson") (collectively "plaintiffs") are African-American customers of Shell-brand gasoline.*fn1 Most Shell-brand gas stations are equipped with gas pumps that can be turned on or off from a console inside the service station. Customers can be viewed by the operator of the station through a window or video camera. Plaintiffs allege that they were required to pay in advance for gasoline before the operator of the station would turn on the pump ("pre-pay"). White customers arriving within minutes of such incidents, however, were allowed to pump their gas first and then pay ("post-pay"). Plaintiffs claim that this racially discriminatory treatment violated their rights under 42 U.S.C. § 1981, 1982, and 2000a.

Defendant Shell Oil Company ("Shell") is a Delaware corporation doing business in this district. Until 1998, Shell owned approximately 8,500 gas stations located throughout the United States. On or after January 1, 1998, Shell transferred ownership of the approximately 8,500 stations and related assets to defendant Equilon Enterprises, LLC ("Equilon"). Approximately 10 percent of the stations are owned and operated directly by Shell or Equilon ("corporate stations"). The remaining 90 percent of the stations are owned by Shell or Equilon but operated by individual contract dealers ("dealer stations"). The dealer stations operate under a dealer agreement ("agreement") with-Shell and Equilon, and lease the stations from Shell and Equilon under a "Motor Fuel Station Lease" ("lease"). The Agreement requires dealer stations to maintain corporate standards in the operation of Shell-brand stations (agrmt, ¶ 2). The agreement and the lease also provide for termination by Shell or Equilon if a dealer station knowingly fails "to comply with federal, state or local laws or regulations relevant to the operation of [the station]" (agrmt, ¶ 18.1(c)(11); lease, ¶ 10.1(c)(10)).

Based on these Illinois incidents, plaintiffs name as defendants in this lawsuit Shell, Equilon and the six dealer stations identified above. Unless otherwise noted, we shall refer to the six dealer stations collectively as "dealer defendants," and individually as Ashland Diversey Shell, Irving Sheridan Shell, Ridge Devon Shell, Clark Devon Shell, Peterson Western Shell, and Roselle Shell.

II. History of Proceedings

Plaintiffs have made numerous submissions to the Illinois Department of Human Rights ("IDHR") complaining of these discriminatory pre-pay incidents. As we will discuss below, the substance and chronology of these filings are important. On February 24, 1998, plaintiff Hill filed a charge with the IDHR against Shell for the September 21, 1997 pre-pay incident at the corporate station in Skokie. In that submission to the IDHR, Hill also described the pre-pay incidents he suffered at the five dealer stations with which he had dealings. Shell responded to the charge on April 15, 1998. On June 11, 1998, plaintiff Parks filed an IDHR charge against Roselle Shell based on the pre-pay incident he suffered there on June 7, 1998. On August 18, 1998, Hill filed amended charges, identifying with more specificity the five dealer stations that required him to pre-pay for gas. On September 16, 1998, plaintiff Hill withdrew his IDHR charges and filed a complaint, naming Shell and five dealer stations as defendants. On September 23, 1998, Hill filed the first amended complaint, which added Parks as a plaintiff and Equilon and Roselle Shell as defendants.

Plaintiffs filed a new round of IDHR charges on December 10, 1998. In addition to the charges of Hill and Parks against Shell and the six dealer defendants, Lawson filed charges against Equilon for the January 10, 1998 pre-pay incident he suffered at the corporate station in Lombard. The December 10, 1998, filings were formal IDHR charges, naming as respondents each of the eight defendants. In a letter to plaintiffs' counsel dated December 28, 1998, an IDHR investigator informed plaintiffs that their charges were filed more than 180 days after the alleged incidents and therefore were untimely under Illinois law. On January 27, 1999, plaintiffs filed the second amended complaint ("complaint") against Shell, Equilon and the six dealer defendants.

In the complaint, plaintiffs purport to bring a bilateral class action on behalf of "all African-American persons who have purchased gas at or will in the future seek to purchase gas from Shell and Equilon corporate locations or contract dealers" (cplt, ¶ 13) They name Shell, Equilon and the six dealer stations as defendants, along with a defendant class consisting of "all Shell and Equilon contract dealers operating under Shell and Equilon's Lease and Dealer Agreement" (cplt, ¶ 18). Plaintiffs raise two counts in their complaint, both based on the same discriminatory pre-pay incidents. Count I is brought under Sections 1981 and 1982 of the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991. 42 U.S.C. § 1981 and 1982. Count II is brought under Title II of the Civil Rights Act of 1964. 42 U.S.C. § 2000a. Plaintiffs allege that defendants have maintained a pattern or practice of requiring African-American customers, but not white customers, to pre-pay for gas purchases. Plaintiffs allege that Shell and Equilon are liable for the misconduct of their corporate stations, and of the dealer stations, over whom they have actual or apparent authority. Plaintiffs seek monetary damages, injunctive relief, attorneys' fees, and a declaration against defendants establishing that Shell and Equilon have the power under the agreement and the lease to terminate any dealer station discovered to have violated federal civil rights laws against members of the plaintiff class.

All eight defendants have moved to dismiss the complaint. Defendants primarily argue that 1) Count II should be dismissed because plaintiffs have failed to satisfy the jurisdictional prerequisites of Title II, and 2) both counts should be dismissed for failure to state a claim. In addition, various defendants advance a number of other grounds for full or partial dismissal, including arguments of vicarious liability, mootness, standing, and misjoinder. As discussed below, the motions to dismiss are granted in part and denied in part.

DISCUSSION

I. Subject Matter Jurisdiction Over Title II Claim

Defendants move to dismiss plaintiffs' Title II claims under Rule 12(b)(1) for lack of subject matter jurisdiction. Where a Rule 12(b)(1) motion challenges the sufficiency of the allegations of subject matter jurisdiction, the court must accept as true all well-pleaded factual allegations and construe them favorably to the pleader. Rueth v. EPA, 13 F.3d 227, 229 (7th Cir. 1993). Dismissal is proper only if it appears beyond doubt that the plaintiff cannot prove any set of facts consistent with the complaint that would entitle him to the relief requested. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

Defendants claim that plaintiffs have failed to satisfy Title II's jurisdictional requirements before filing this lawsuit. See 42 U.S.C. § 2000a-3(c). First, defendants argue that plaintiffs failed to meet the 30-day state notice requirement contained in § 2000a-3(c). Second, defendants argue that plaintiffs failed to initiate IDHR proceedings within the 180-day state filing period allotted under Illinois law (see 775 ILCS 5/7A-102(A)(1)), and therefore their Title II claims are barred. Both of these arguments fail.

A. Title II's State Notice Requirement

Defendants claim that plaintiffs failed to satisfy Title II's jurisdictional prerequisites because they did not file written notice with the IDHR at least 30 days before bringing this lawsuit. Title II contains a state notice requirement, set forth in § 2000a-3(c):

  In the case of an alleged act or practice prohibited
  by this subchapter which occurs in a State, or
  political subdivision of a State, which has a State
  or local law prohibiting such act or practice and
  establishing or authorizing a State or local
  authority to grant or seek relief from such practice
  or to institute criminal proceedings with respect
  thereto upon receiving notice thereof, no civil
  action may be brought under subsection (a) of this
  section before the expiration of thirty days after
  written notice of such alleged act or practice has
  been given to the appropriate State or local
  authority.

Because the requirements of § 2000a-3(c) are jurisdictional, failure on the part of plaintiffs to satisfy the 30-day state notice rule would warrant dismissal of their Title II claim for lack of subject matter jurisdiction. See Stearnes v. Baur's Opera House, Inc., 3 F.3d 1142, 1145 (7th Cir. 1993).

Plaintiffs raise two arguments in response to this claim. First, they argue that this action falls under § 2000a-3(d), which does not contain any state notice requirement. Second, they contend that even if § 2000a-3(c) applies to their action, they have satisfied the state notice requirement set forth therein. We address each of these arguments in turn.

1. Section 2000a-3(d)

Plaintiffs emphasize that § 2000a-3(c) applies only where there is "a State or local law prohibiting such act or practice and establishing or authorizing a State or local authority to grant or seek relief from such practice." They argue that the IDHR does not have the authority to grant or seek the interstate class remedy they pursue in this lawsuit. Therefore, they argue, § 2000a-3(c) does not govern this action. Instead, plaintiffs claim to proceed under § 2000a-3(d), which applies to alleged acts or practices occurring in a state "which has no State or local law prohibiting such act or practice," and consequently does not contain any requirement to notify a state agency prior to filing a federal action.

Plaintiffs' position would circumvent § 2000a-3(c)'s state notice rule in all cases in which a plaintiff anticipates seeking interstate, classwide relief. Indeed, under plaintiffs' theory, § 2000a-3(c) would not apply whenever an individual seeks relief from multiple defendants who do not reside in the same state. This would vitiate § 2000a-3(c), which is meant to provide a state agency the opportunity to invoke its remedies. See Harris v. Ericson, 457 F.2d 765, 766 (10th Cir. 1972). If a plaintiff is not satisfied with the relief available from the state agency, he may proceed with his federal lawsuit after 30 days. This requirement is not an onerous one.

Plaintiffs supply no authority supporting their position that the notice requirement is not applicable when interstate, classwide relief is sought. The only case cited by plaintiffs is Robinson v. Power Pizza, Inc., 993 F. Supp. 1458 (M.D.Fla. 1998). In Robinson, the court held that § 2000a-3(c) did not require plaintiffs to notify the Florida Commission on Human Relations prior to filing a federal action because plaintiffs sought a preliminary injunction and the Florida Commission provided no mechanism for obtaining such relief. Id. at 1460-61. The court's holding in Robinson, however, was based on unique concerns of urgency — the court emphasized the injustice of forcing a plaintiff in need of immediate injunctive relief to file a futile notice with the state agency and then wait 30 days before initiating a federal action. Id. at 1461. Those considerations of urgency do not exist here, and Robinson has little bearing on this case.

Nothing in ยง 2000a-3(c) indicates that it does not apply in the circumstances presented here, and there is no persuasive case law suggesting otherwise. Indeed, Illinois has established a state agency, the IDHR, to investigate and prosecute just the sort of acts of racial discrimination plaintiffs allege in this lawsuit. Accordingly, we ...


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