708 F.3d 106
2d Cir.2013Background
- Lehigh Gas Corp. appeals a district court judgment awarding Jimico Enterprises and Brownson Enterprises damages under the PMPA for terminating franchises without proper notice.
- This case centers on whether a franchisor may be liable under the PMPA for failing to notify a trial franchisee before termination of the franchise.
- Jimico and Brownson operated five stations along the New York Thruway and entered into trial-franchise relationships with Lehigh on June 1, 2006.
- Lehigh terminated the five trial franchises between July 2006 and April 2007 without providing the statutorily required notice.
- The district court granted summary judgment for plaintiffs on notice violations, then awarded compensatory and punitive damages, fees, costs, and interest; Lehigh appealed the amended judgment.
- The PMPA provides a private right of action for enforcement of its notice provisions, and the court addresses damages and appellate fees on review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PMPA provides a private right of action for notice violations against trial franchises | Jimico/Brownson contend §2805 authorizes action for notice failures by §2804. | Lehigh argues §2805(a) does not include §2804, thus no action for notice violations. | Yes; trial franchisees may sue for notice violations under §2805. |
| Whether notice violations support damages and related fees | Damages, fees, and interest are recoverable under §2805 for PMPA violations. | The district court erred in damages, fees, or interest awards if PMPA does not authorize notice-based actions. | District court’s damages, punitive damages, fees, and interest awards were proper. |
| Whether trial franchisees are covered by PMPA notice provisions | Trial franchises fall within PMPA notice requirements before termination. | Trial franchises might be exempt from certain notice provisions by §2803. | Trial franchisees are within the PMPA notice regime; §2802/§2804 apply to termination of trial franchises. |
Key Cases Cited
- Mac's Shell Serv. v. Shell Oil Prods. Co., 130 S. Ct. 1251 (U.S. 2010) (termination/nonrenewal notice required under PMPA; strict compliance)
- Ceraso v. Motiva Enterprises, LLC, 326 F.3d 303 (2d Cir. 2003) (strict compliance with PMPA notice provisions; written notice required)
- Mobil Oil Corp. v. Karbowski, 879 F.2d 1052 (2d Cir. 1989) (PMPA objective to prevent arbitrary termination in franchise relationships)
- Shukla v. BP Exploration & Oil, Inc., 115 F.3d 849 (11th Cir. 1997) (trial franchise framework and notice considerations)
- Razavi v. Amoco Oil Co., 41 F.3d 1549 (D.C. Cir. 1994) (trial franchise notice provisions after incorporation by §2803)