Sunoco Class Action Over Fuel Rewards Allowed to Proceed

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A federal judge has rejected Sunoco’s bid to arbitrate a proposed class action stemming over allegations that the company falsely advertised its fuel rewards card benefits.

U.S. District Judge Paul S. Diamond of the Eastern District of Pennsylvania denied Sunoco’s request to compel arbitration by determining that Sunoco was not contractually entitled to arbitration because, although the cardholder agreement does provide for arbitration, it is only between the card issuer and the cardholder – not between Sunoco and the cardholder.

“Here it is apparent that the cardholder agreement was ‘entered into by the parties directly and primarily for the benefit of’ Citibank,” Judge Diamond said. “The agreement does not even mention Sunoco or the ­rewards program.”

He continued, “Rather, the record confirms that, like virtually all credit card contracts, this agreement sets out the terms and conditions by which the credit card provider (i.e. Citibank) makes credit available to the cardholder.”

Judge Diamond concluded that Sunoco alone is responsible for ensuring that the fuel rewards card discount it advertised was properly applied. He also found that the dispute with Sunoco was not intertwined in any way with Citibank, and therefore arbitration could not be compelled based on a separate agreement with the card issuer that Sunoco was not a party to nor had any mention in.

According to the class action lawsuit, plaintiff Donald White alleges that he was denied the five-cent-per-gallon discount offered by Sunoco through their fuel rewards card program. As a result, White claims to have overpaid for gasoline purchased at Sunoco locations with the Sunoco Rewards Credit Card.

Additionally, the plaintiff states that Sunoco’s promotional materials never specified that the fuel rewards card discount would not be provided at some independently owned and operated stations.

Sunoco prominently advertises its “Sunoco Rewards Credit Card” to consumers who frequent the company’s retail locations and website, enticing consumers to apply for the Sunoco Rewards Credit Card by representing that cardholders will receive “5¢ OFF EVERY GALLON” of fuel purchased at any Sunoco location, the lawsuit claims.

White asserts that Sunoco knew this advertisement to be misleading and intended for it to induce customers to sign-up for the fuel rewards card and only frequent Sunoco stations.

Sunoco markets motor fuels through more than 4,900 Sunoco-branded locations in 26 states, including Pennsylvania and Florida. The company reportedly sells more than 4.7 billion gallons of fuel per year.

White is bringing forth allegations that Sunoco actions arising from false and deceptive representations about the benefits of being a Sunoco Rewards Card cardholder constitute fraud, negligent misrepresentation, unjust enrichment, and violations of Florida’s Deceptive and Unfair Trade Practices Act.

He seeks to represented a nationwide Class of consumers who held a Sunoco Fuel Rewards Card within the applicable statute of limitations as well as a Florida subclass. The proposed Class is requesting restitution along with a injunction enjoining Sunoco from engaging in false adverstising of its fuel rewards card.

White is represented by Richard M. Golomb, Ruben Honik, Kenneth J. Grunfield, and David J. Stanoch of Golomb & Honik, P.C.

The Sunoco Fuel Rewards Card Class Action Lawsuit is White v. Sunoco Inc., Case No. 2:15-cv-04595, in the U.S. District Court for the Eastern District of Pennsylvania.