Franchising & Distribution Law Blog

As energy companies and convenience retailers continue to adapt in a transitioning energy industry, the 2022 Petroleum Marketing Attorneys’ Meeting highlighted important developments including those related to electric vehicles, privacy laws and antitrust considerations. The following are five key takeaways from the conference, which explores issues affecting energy companies and distributors.

In a case pending in the Northern District of Illinois, a court granted a motion to dismiss Petroleum Marketing Practices Act (PMPA) claims brought pertaining to two unbranded motor fuel stations. The court, however, refused to dismiss claims on the question of the validity of termination pursuant to the PMPA as to a third station. All three stations were supplied motor fuel by Lehigh Gas Wholesale, LP pursuant to supply agreements executed with each of the locations. One station sold Marathon-branded fuel and it was undisputed that the PMPA applied to that supply agreement. The two other stations were supplied unbranded motor fuel and did not have authorization to sell under any third-parties’ trademark.

In 2010, the United States Supreme Court famously ruled that in cases under the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. § 2801 et seq., a franchisee could not state a claim for constructive termination unless the franchisor’s actions actually caused the franchisee to abandon its franchise. Mac's Shell Service v. Shell Oil Prods. Co., 559 U.S. 175 (2010). Earlier this month, relying on this rule from Mac’s Shell, a federal district court in New Jersey ruled that two urgent care franchisees likewise could not state a claim for constructive termination under the New Jersey Franchise Practices Act where their franchisor’s challenged conduct did not actually cause them to abandon their franchises. See Pai v. DRX Urgent Care, LLC, Nos. 13–4333, 13–3558, 2014 WL 837158 (D. N.J. March 4,2014).

Emmanuel Joseph was a franchised gasoline retailer for Chicago-area fuel distributor Sasafrasnet, LLC, who operated a BP-branded gasoline station in Chicago. In November 2010, Sasafrasnet notified Mr. Joseph that it was going to terminate his franchise under the Petroleum Marketing Practices Act (“PMPA”) because, on three separate occasions, it had been unable to electronically debit Mr. Joseph’s account to pay for fuel deliveries because his bank account did not have sufficient funds. Mr. Joseph filed suit and sought a preliminary injunction under the PMPA to enjoin Sasafrasnet from terminating him, but the district court denied the motion.

Last month, the Fourth Circuit affirmed a ruling that North Carolina’s Ethanol Blending Statute is not preempted by the Petroleum Marketing Practices Act (“PMPA”) or federal renewable fuel program. The case was remanded for findings on whether the statute is preempted by the Lanham Act.

The Second Circuit held that two trial franchisees properly asserted an action under the PMPA when their franchisor failed to comply with the notice provisions under the Petroleum Marketing Practices Act (“PMPA”) prior to terminating their franchises.

On December 3, 2012, the Eighth Circuit reversed a district court’s decision that a Missouri state law claim was completely preempted by the Petroleum Marketing Practices Act (PMPA).

A Missouri plaintiff filed a class action against gasoline station operators, including MFA Petroleum, Casey’s General Stores, and QuikTrip, regarding the grade of motor fuel dispensed with single hose dispensers. The case was filed in state court alleging a claim under the Missouri Merchandising Practices Act (MMPA). Casey’s General Stores removed to federal court on two grounds: (1) the claim was preempted by the PMPA and (2) there was diversity jurisdiction under the Class Action Fairness Act. The district court in the Western District of Missouri, relying on a similar Ninth Circuit case, denied the plaintiff’s motion to remand concluding that the state law claim was completely preempted by the PMPA.