United States District Court, S.D. California
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
[DKT. 16]
HONORABLE LARRY ALAN BURNS CHIEF UNITED STATES DISTRICT
JUDGE.
Currently
before the Court is Defendant Airgas USA's Motion to
Dismiss. Dkt. 16. For the reasons below, that motion is
GRANTED.
BACKGROUND
Defendant
Airgas USA, LLC (“Airgas”) is a Delaware
corporation, headquartered in Pennsylvania, that manufactures
and distributes commercial gas cannisters nationwide. First
Am. Compl. (“FAC”) at ¶¶ 8-9. For at
least the past four years, Airgas has charged its customers,
including Plaintiff Lit'l Pepper Gourmet, Inc.
(“Lit'l Pepper”), a “Fuel Surcharge,
” which it lists on every invoice and delivery receipt.
Id. at ¶¶ 16, 21. Lit'l Pepper filed
this complaint on behalf of itself and all other California
Airgas customers, alleging that Airgas's decision to
impose these fuel surcharges constitutes breach of contract
and a violation of various California consumer protection
laws. Lit'l Pepper claims that the fuel surcharges bear
no relation to Airgas's actual fuel costs and are not
used to offset an increase in the cost of fuels. Instead,
according to Lit'l Pepper, the fuel surcharges are simply
a hidden rate increase designed to generate profit. Airgas
now moves to dismiss, arguing that the terms of sale found on
its website permit it to impose these fuel surcharges.
ANALYSIS
A.
Legal Standard
A Rule
12(b)(6) motion tests the sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
While a plaintiff need not give “detailed factual
allegations, ” a plaintiff must plead sufficient facts
that, if true, “raise a right to relief above the
speculative level.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 545 (2007). “To survive a
motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 547). A claim is facially
plausible when the factual allegations permit “the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. The
Court need not accept legal conclusions couched as factual
allegations. See Twombly, 550 U.S. at 555.
B.
Threshold Issue: Which Set of Terms Controls?
Before
analyzing the sufficiency of Plaintiff's complaint, the
Court must first determine which set of contractual terms
governs the party's relationship when the terms conflict.
The key dispute in this case concerns a provision in the
website's terms of sale that allows Airgas to impose a
fuel surcharge not only if the company encounters
extraordinary or emergency circumstances, but also in the
face of “unanticipated increases in the cost of
manufacturing, supplying or distributing.” The
corresponding provision on the invoices contains no such
carve out, but instead permits the company to impose a fuel
surcharge only in extraordinary or emergency
circumstances. Naturally, Plaintiff claims that the terms on
the invoices control, while Airgas maintains that the terms
on its website supersede those on the invoices. As relevant
here, the language on the invoices provided:
Terms of Sale. Each sale of Goods
or services . . . is and shall be governed by the terms and
conditions on this Disclosure, the Terms of Sale affixed to
the Account Application (if one has been completed), and the
Terms of Sale found at http://www.airgas.com/terms-of-sale
(collectively the “Terms of Sale”).
Surcharges. Upon notice and receipt
of underlying documentation, Buyer shall pay to Seller a
surcharge in the event of any extraordinary or emergency
increases in the cost of (a) power and/or raw materials used
in the production of Products and/or (b) fuel.
FAC, Ex. A at 9. The language on the delivery orders-which
were signed by a Lit'l Pepper representative at the time
Lit'l Pepper accepted a delivery from Airgas-contained no
information about surcharges but similarly directed customers
to Airgas's website for the full terms governing the
transaction:
AIRGAS TERMS AND CONDITIONS OF SALE. Each
sale of Products by Airgas USA, LLC, or one of its affiliates
(“Seller”), shall be governed by the terms and
condition below and the terms of sale found at
http://www.airgas.com/terms-of-sale (collectively, the
“Terms”). If you do not have access to the
internet, you may request a copy of the terms of sale from
your Airgas customer service representative.
Id. at 6. Finally, the online terms provide, in
relevant part:
TERMS OF SALE. Except as provided in a
separate written agreement, such as a Product Sales
Agreement, negotiated by the parties and executed by
authorized representatives of Seller and Buyer, each sale of
Products or Services shall be governed by these Terms and
Conditions of Sale (“Terms”). . . . Seller's
acceptance of any order is expressly subject to Buyer's
assent to each and all of the terms and conditions set forth
herein. These Terms represent the entire agreement with
respect to the sale or rental of Products and Services and,
except as provided in a separate written agreement as set
forth above, supersede all prior or contemporaneous
written/oral communications between the parties and
information in any Seller literature, website or catalog, and
override and exclude any other terms and conditions
stipulated, incorporated or referred to by Buyer, including
without limitation any Buyer purchase order, and any prior
course of dealing between the parties.
ITEMIZED CHARGES. The total amount due from
Buyer may include various itemized charges, including:
charges for the handling of hazardous materials and for
compliance with laws and regulations concerning hazardous
materials; charges for handling, delivery, and shipping;
and/or charges for energy or fuel. None of the charges
represents a tax or fee paid to or imposed by any
governmental authority and all of the charges are retained by
Seller. Seller has not specifically quantified the
relationship between the charges and the actual costs
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