*1 846 solely appealing disciplinary ings
lished as to which of Holman’s statements authorities, knowing without the substance the court considered untruthful would have encourage filing would complaint, preferable, been sepa- we have held that pur frivolous claims defendants for rate findings regarding of fact each ele- See United States v. poses delay. perjury ment of are not strictly necessary (4th Cir.1993). Burns, 1426, 990 1438 uphold justice an obstruction of en- conflict, without an actual Left Holman’s hancement long 3C1.1. As as the conflict of interest claim fails. trial court determined that the defendant lied to the judge jury about matters
Second,
argues
Holman
the level
question
crucial to the
of the defendant’s
used to calculate his sentence under the
guilt, that is sufficient. See United States
was
Sentencing
improperly
Guidelines
White,
(7th
v.
656,
Cir.2001).
240 F.3d
based on
not raised at trial.
facts
Since he
Here, the trial court found that Holman
objections
did not raise these
during his
lied
drugs
when he said that
planted
were
sentencing hearing,
plain
we review for
on him
in his car. We consider this
Davis,
and/or
error. United States v.
15 F.3d
sufficient to describe a
(7th
give
“failure to
1393,
Cir.1994).
1406-07
suggests
He
testimony
truthful
on material matters
reading Ap
expand
that we
should
our
designed
substantially
were
affect
prendi
Jersey,
v. New
466,
U.S.
case,”
United
v.
the outcome of the
States
2348,
(2000),
S.Ct.
di. statutory Because the maximum sen possession base,
tence for of cocaine with
out regard quantity, is 240 months and
Holman was sentenced to 188 months for offenses, Apprendi these apply does not ENERGIES, INC., DERSCH uphold and we his sentence. See Talbott Plaintiff-Appellant, Indiana, v. (7th 226 F.3d Cir. 2000). Equilon SHELL OIL COMPANY and Holman’s final claim that Enterprises, Inc., Defendants- trial judge failed to proper make findings Appellees. when imposing two-level enhancement No. 01-2495. justice for obstruction of under Sentencing Guideline 3C1.1. attorney objected His United States Court Appeals, general principle of the enhance Seventh Circuit. ment, but did not any objection make Argued Nov. 2001. findings of fact the judge during made Decided Dec. the sentencing hearing, so our review is plain error. See United States v. Dan ser, Cir.2001).
Though agree we specific more find-
MANION, Judge. Circuit Shell Energies, purchases Inc. Dersch and resells Company products them Oil In December retail distributors. began negotiating with Shell Dersch relationship, of their renewal fall expire of 1998. which was set negotiation process, Throughout concerns to Shell about expressed provisions that deemed several contract *4 negoti- months of objectionable. After ten (now ations, as operating Equilon Shell merger) in- L.L.C. due to Enterprises, signed that unless formed Dersch agreement within proposed franchise would issue days, quilon few next Shell/E the parties’ of nonrenewal of formal notice relationship. signed Dersch protest,” agreement “under new franchise later, and, year filed an approximately one Shell declaratory against relief action for seeking a declaration of Equilon, and agreement rights under the corporation’s Marketing to the Petroleum pursuant Act, §§ 15 U.S.C. 2801-2806. Practices par- wrangling, the After some procedural summary judg- for filed cross-motions ties granted court the de- The district ment. motion, timely filed a and Dersch fendants’ judgment, amend the to alter or motion appeals Dersch the court denied. which granting decisions court’s the district summary judgment for motion defendants’ summary for motions and its denying judg- amend the to alter or judgment and ment. We affirm. I. Taylor & (argued), Taylor L.
William VA, Alexandria, Plaintiff-Ap- Powell, for (“Dersch”) is a Inc. Energies, Dersch pellant. reselling motor fuel business family-owned Shell-branded and sold purchased that has Becker, Heyl, Royster, Voelk- J. William role years. fifty over motor fuels for Edwardsville, IL, Douglas C. Allen, er & middleman, Shell-branded Dersch sells Crone, Tribler, & Orpett (argued), Crone of southeastern portions motor fuels IL, Defendants-Appellees. Chicago, for av- Indiana. On Illinois and southwestern ten million purchases over FLAUM, erage, Dersch Judge, Chief Before annu- motor fuels of Shell-branded MANION, Judges. gallons Circuit CUDAHY ally, which it then sells to jobber service stations in the country has this new contract commercial, agricultural, and other in- in effect. Please return ASAP.” March On 4, 1998, dustrial businesses. Since responded by John Dersch advis- purchased Shell, ing motor fuels from Shell in writing, Oil that the 1982 Con- (“Shell”) pursuant Co. of supply to series tract was set until expire not December (drafted “jobber” Shell), 29, 1998, contracts May On Shell notified the last of which became effective on jobbers Janu- Dersch that all “Shell wants 1, 1982, ary and was to remain effect their new contract. only job- You are the (“1982 Contract”). until December signed. ber not legal [department] Our The 1982 Contract provided year-to- says you right have the to hold off signing year expiration renewals at the of the ini- until ... December 1998. If do you three-year term, tial unless terminated that, prior return the contract your within party ninety either of the an- days contract with Shell will terminate.” nual parties operated renewal date. The 15, 1998, July representatives On from under these annual Septem- renewals until parties both met to discuss the terms and ber when a new agreement proposed conditions of the Agree- Renewal *5 parties. was entered into During ment. the course of the meeting, 1997,
In to ensure national uniformity, Thomas Dersch voiced concerns over the Shell decided to revise its fran- existing (1) Agreement’s: Renewal indemnification agreements jobbers chise with and whole- (2) provisions; provisions; release of claims 1997, In salers.1 December Shell sent a (3) (4) assignment provisions; pricing pro- (“Renewal new agreement franchise (5) vision; description and of Dersch’s new Agreement”) sign. for Dersch to In the defined territory. He also told the Shell accompanying correspondence, high- Shell representatives that he considered the cor- lighted the differences between the Re- responding security personal and guaranty Agreement Contract, newal and the 1982 agreements seeking Shell was re- to —that and informed Dersch that the 1982 Con- quire Dersch to in conjunction execute 31, was expire tract set to on March 1998. Agreement with the Renewal “on- be—to Shell advised also Dersch it had until erous.” days Two after meeting, 22, 1997, December to the Renew- execute Dersch received a facsimile from Zum- al Agreement. dome advising that require Shell would not 25, 1998, February Zumdome,
On Ken Dersch to execute the new security manager Shell’s area personal guaranty agreements, Dersch’s territo- noting but ry, sent a facsimile message to John the Renewal Agreement would now Dersch, president, require and Thomas an addendum reflecting the fact Dersch, John Dersch’s son joined Texaco, and Dersch’s that Shell had Inc. (“Texaco”) vice president, advising them that a “[n]ew to Equilon form Enterprises, jobber contract you was sent to before L.L.C. (“Equilon”) and acknowledging that only jobber Christmas. You are the who Equilon would be Dersch’s new supplier- has not returned Every [the contract]. franchisor under Agreement.2 the Renewal defendants, According 1. "uniform con- jobbers/wholesalers between various might important put tracts are jobbers all subject in a applica- [them] claims of selective position prevent jobbers similar so as to discriminatory practices.” tion and gaining advantage from an unfair over other jobbers which could result if part the terms and joint agreement As of a venture be- Texaco, conditions of each individual contract were tween Shell certain assets of the negotiated.” separately companies The defendants also Equilon, were transferred to effec- presence 1998, believe that "the July of different including terms tive Dersch's franchise time. sign if I do not it at this a 1998, Dersch received mid-August protest it Accordingly, signing the Renewal I am under version revised slightly Shell, challenge letter it.” along rights with a all and reserve from Agreement asserting that that, mistakenly Agreement the Renewal Equilon signed after August 30,1998. on expired had September Contract on day the next appropriate “the advised Dersch 21, 1999, operating September after On and returned be executed must documents for almost Agreement the Renewal under 3, 1998.” August than not later Shell year, filed an for declar- one Dersch action Dersch, respond not it did According to relief, to 15 U.S.C. atory pursuant believed, based on letter because 2805(e) 2201, requesting and 28 U.S.C. it had correspondence, prior Shell’s rights the Re- of its declaration 31, 1998, to execute until December pursuant to Petrole- Agreement newal Agreement. Renewal (“PMPA”). Marketing Practices Act um 29, 1998, John September or about On declaration sought Dersch Specifically, call from telephone received Dersch (collectively “Equi- Equilon that Shell if Dersch Zumdome, him that informing defendants) violated 15 U.S.C. lon” or the the Renewal forward sign did 2805(f)(1)by conditioning the renewal of in the next Shell/Equilon Agreement on relationship parties’ instruc- days, he was under to three two waiving rights claims and releasing Dersch of nonre- notice to issue an official tions both federal and state that it had Dersch’s franchise newal of law. 1, 1998, January to be effective October alleged that complaint, In its *6 Dersch that advised 1999.3 Zumdome defendants, discontinue by threatening to rescinded, and be would not relationship, forced it parties’ notice that had from the excerpts read rights, law waive six or state release companies’ by the already prepared been appeal. at on are issue three of which then requested Dersch attorneys Thomas indemnity First, that claimed Dersch copy of the him Zumdome send that i.e., Agreement, the Renewal provision of of non-renewal via facsimi- notice proposed 11.1, right its required it waive Article request, with this complied le. Zumdome joint from tortfeasors to contribution no- copy proposed faxing Dersch a 5/2-1117(a).4 Sec- 735 ILCS violation of reviewing day. After that same tice change of ond, that averred Dersch nonrenewal, ex- Dersch notice of proposed i.e., and Articles 5.1 delivery provisions, “under Agreement the Renewal ecuted 23-2-2.7-1(3) be- 5.4, Ind.Code violated following under- and protest,” typed allowed defendants they cause initials: signatures each of his neath product sold delivery point for “change the agreement, my objections to this “[d]espite (i.e., the origin point Dersch from the my with the I loss have been threatened 1213, 1217 Equilon operates as a Amoco Oil agreement Shell. with 1982). Cir. and marketer major company oil refiner fuels. Texaco-branded motor Shell— and both 5/2-1117(a) provides “a that 4. 735 ILCS only and liable severally is liable comport defendant presumably to 3. This was eco- proportion only of recoverable for that 1982 requirement under the ninety-day notice damages, any, if non-economic general rule nomic and § 2804's and U.S.C. Contract fault, if amount of that defendant's that the given a fran ninety days be before notice that aggregate of fault any, amount bears or nonrenews a franchise chisor terminates See, v. all other tortfeasors....'' relationship. e.g., Brach terminal) destination, back, fuel and of rights provision violated [the PMPA].” Third, option.”5 Dersch maintained In ruling on the defendants’ motion to joint liability provision and several dismiss, the district court also noted that personal obligations provisions and the and complaint was “not proceeding on clause, i.e., 21.2 and respec Articles 21.3 diversity grounds” and that: tively, person subverted the limitations on To relying the extent that Dersch is liability corporate al for officers and di independent as an source of rectors under both the laws of Illinois and jurisdiction, Dersch’s reliance is mis- See, Haas, e.g., Indiana. Davis v. Haas & placed. Section not pro- does Inc., Ill.App.3d 230 Ill.Dec. vide an independent basis for relief. In- (1998) (holding 694 N.E.2d 2805(a) stead, § is the PMPA section corporation legal entity is a which “[a] grants a district jurisdiction court exists from separate distinct its share- ... [and it] extends to situations holders, directors and officers. According- where there has been a termination or shareholders, ly, directors and officers are nonrenewal, actual or constructive.... generally not corporation’s liable for a obli- So to secure relief for a violation of (internal gations.”) omitted); citations 2805(f)(1), the franchisee must couch Indiana, Rights State Civil Comm’n [its] relief terms of a violation of Park, Inc., County Line 718 N.E.2d §§ 2802-03. (same). (Ind.Ct.App.1999) These con- subsequently Dersch amended its com- tract will hereinafter be re- plaint jurisdictional address the con- collectively ferred to as the “Disputed Pro- order, cerns raised the district visions.” court’s alleging that the defendants’ coerced re- 9, 1999, On December the defendants newal violated both complaint, moved to dismiss Dersch’s ar- 2805(f)(1). Thereafter, the parties filed actual, guing justiciable that there nowas cross-motions summary judgment. controversy that permit would the district separate offered two and distinct court to subject jurisdic- exercise matter legal theories in support of its PMPA tion, claiming litigation was *7 claim. primary argument Dersch’s was ripe not complaint only because Dersch’s that the state law waivers resulted in a actual, potential, raised not violations of constructive nonrenewal of parties’ the such, As the defendants as- franchise relationship. alternative, In the serted that the district court being was Dersch contended that even if the waivers asked improperly render an advisory did not constitute a constructive nonrenew- opinion. The district court denied the de- al of its relationship, franchise it dismiss, fendants’ was still motion to concluding authorized to sue the that defendants under the complaint alleged Dersch’s an actual because, PMPA because controversy provides “a fair fran- reading of the complaint that chisees with an controversy implied private reveals the in- right of the question volves of whether action to qui- provisions. enforce the statute’s Shell/E lon’s conditioning conduct of the franchise The defendants responded by asserting renewal on Dersch’s assent to the waiver that even if Dersch could meet the 23-2-2.7-1(3) provides Ind.Code provision] “[i]t in Indiana to contain ... [a [al- any is unlawful agreement franchise en- lowing substantial modification of the fran- tered into between franchisor and a fran- agreement by chise the franchisor without the chisee who is either a resident of Indiana or a writing consent in of the franchisee.” nonresident operating who will be a franchise and fran- if the franchisor the franchise of demonstrat- burden threshold PMPA’s agree to additions to the chisee fail relation- franchise of its a nonrenewal ing provided 2805(c), agreement, franchise existing could not it see 15 U.S.C. ship, additions Disputed proposes franchisor those the the claim because on its prevail faith, course of faith and in the normal good good in offered were Provisions business, renewal pursuant prevent and not the business course of normal the 2802(b)(3)(A). The defen- relationship. 15 U.S.C. Provi- Disputed argued the dants also evaluated each The district court then event, Dersch not, require in any did sions analyt- this using Provisions Disputed the under fed- that it had any rights to waive to the Re- respect framework. With ical the defendants Finally, law. state eral or indemnity and Agreement’s change newal district agreement with noted their the district court delivery provisions, to dismiss motion its court’s conclusion-in (1) were provisions that: sub- found “not an inde- was order-that provisions same as the on stantively the for relief jurisdiction source pendent subject contained matter the same PMPA.” (2) Contract; provi- if and even these 8, 2001, court the district March On terms, they new did were considered sions motion for sum- the defendants’ granted “[pro- because run afoul of not judg- its and rendered judgment, mary already-agreed-upon provision posing analyzing day. that same ment agreement would franchise existing the- nonrenewal a constructive claim showing good faith Defendants’ fulfill that: noted ory, the court 2802(b)(3)(A)],6 there is no and [under entirely with case deals Because reasons, For these contrary evidence.” Con- provisions [Renewal] specific that Dersch could court district held tract, a constructive successfully show constructive nonre- demonstrate Dersch nonrenewal, appears franchise vis-a-vis of its newal (1) that the Defen- to show would have provisions. contract these continue, reinstate, failed to dants also concluded The district court motor and respective [sic] extend defendants’ insistence obli- marketing or distribution fuel joint Agreement’s agreeing Renewal and responsibilities of itself gations personal liability provision and several prior under the clause did not obligations and franchi- affecting the adversely contract a constructive constitute (2) that, complained-of if see con- relationship. These parties’ substantially new provision contract in Article 21 are contained *8 provisions tract it must agreed-upon, previously and provide and as Agreement the Renewal and obligations adversely affect Dersch’s follows: franchise.... under the responsibilities JOINT ENTITY OR 21. BUSINESS showing, can make If the franchisee BUYER step. Under cer- additional is one there if apply article shall This 21.1 General. circumstances, may be a franchisor tain entity or com- Buyer is business re- a franchise nonrenewing justified in person than one of more posed may nonrenew A lationship. franchisor course good in the normal faith and re- chisor may a franchise 6. A franchisor nonrenew ” v. Marathon Petroleum agree to of business.' "to lationship if a refuses Duff Cir.1995) (quoting arrangement changes in the 2802(b)(3)(A)). made the fran- 'determinations from result (i.e., any combination of individu- far legally possible”), as is Article 21.3 was entities). and als business inapplicable rendered if any purported Liability. 21.2 Joint and Several If waiver contained in that provision violated Buyer composed of more than person, one im- obligations rejected The district court also posed joint hereunder shall be and 2805(f)(1) argument provided it with several as to each person, such an implied private right of action to en- obligations and all such shall be force the statute’s provisions, noting “[t]his to apply person deemed to each previously Court concluded though the same effect as only creates duties under the that person Buyer. were the sole PMPA and is not an independent source of Obligations
21.3 Personal and Provi- jurisdiction.... There [is] no indication Buyer sions. If is a business enti- that Congress intended to create an im- ty, obligations all provisions and plied federal cause of action in enacting personal hereof of a nature shall 2805(f).” The court then held that “if apply if entity such business does not implied create an individual, were and shall also cause of action ... Dersch [can] apply legally insofar as is possible maintain a cause of action gen- under the reasonably practicable and provision eral PMPA conferring federal those persons individual who have question jurisdiction onto federal courts.” management exercise responsi- timely Dersch filed a motion to alter or bility for such entity, business in- amend the district judgment, pur- court’s cluding limitation, officers, without 59(e), suant to Fed.R.Civ.P. which the agents directors or of corporations court denied. appeals Dersch the district partners and of partnerships. court’s granting decisions the defendants’ entity business shall manage summary motion for judgment, its affairs with respect per- deny- ing obligations sonal its motions for provisions summary judgment a manner give so as to full to alter or amend judgment. force and effect to same. II.
R61,19. This court reviews the district court’s argued that Articles 21.2 and grant novo, of summary judgment de con 2805(f)(1), 21.3violated constituting thus struing Dersch, all facts favor of a constructive nonrenewal of its franchise nonmoving party. Commercial Under relationship, because the could Services, writers Ins. Co. v. Aires Envtl. be used per- defendants to impose Ltd., (7th Cir.2001). liability sonal on John Dersch and other Summary judgment is proper when the officers, managers, and directors of the “pleadings, depositions, answers to inter corporation. rejected The district court rogatories, file, and admissions on together argument, however, concluding that affidavits, with the if any, provision neither show there could serve aas basis for *9 is no genuine any issue as to material constructive fact theory (1) because: and that moving party Article 21.2 only applied if is entitled to a “Buyer” comprised judgment was of more than as matter of “one law.” Fed. 56(c). person,” Thus, and the “Buyer” to R.Civ.P. “[s]ummary the Re- judg Agreement Dersch, newal was corpora- if, ment is appropriate on the record aas tion; (2) (i.e., by whole, its very terms “inso- a rational trier of fact could not find
855 non-moving party.” Commercial renewal of parties’ franchise relation- Underwriters, 259 F.3d at Thus, 795. We will ship. very heart of this case 59(e) reverse the denial of a Rule motion 2805(f)(1) § is the role plays within the judgment only to alter or amend a for an rubric of the PMPA. The issues before abuse discretion. Britton i.e., 2805(f)(1) whether contains an Swift us— Co., Inc., (7th Transp. 616, 127 F.3d implied private right of action or may Cir.1997). serve as the basis of a constructive nonre- newal claim under the PMPA —are issues appeal, argues
On
Dersch
that the dis-
of first
impression for our circuit. We
trict
in granting
court erred
the defen-
questions
review
statutory
construction
dants’ motion for summary judgment be-
de novo. Miller Aviation v. Milwaukee
analysis
cause the
used
the court failed
County
Supervisors,
Bd.
722,
to give any
consideration
whatsoever
(7th Cir.2001).8
requirements of
substantive
15 U.S.C.
2805(f)(1),7
which provides that:
A. The
Marketing
Petroleum
No franchisor shall
Prac-
require,
a condi-
as
§§
tices
tion
Act—15
entering into
U.S.C.
renewing
or
2801-2806
relationship,
a franchisee to
Before
addressing
the merits
waive-(A)
release or
any right that the Dersch’s arguments, it is necessary
give
franchisee has under
subchapter
or
a brief overview of the scope and structure
(B)
law;
other Federal
any
or
right that
of the PMPA. The PMPA governs fran-
may
have under
valid
sale,
chise arrangements for the
consign-
and applicable State law.
ment, or distribution of motor
“in
fuel
Id.
commerce,”
protects
franchisees from
Dersch,
According to
the district
arbitrary or discriminatory termination or
2805(f)(1)
analysis
court’s
prem
was
nonrenewal of their motor fuel franchises.
ised on “a misunderstanding of the
Co.,
basic Beachler
v. Amoco Oil
112 F.3d
procedural preconditions”
for interpreting
Cir.1997);
Beck Oil
Inc. v.
the Petroleum Marketing
Inc.,
Practices Act
Mktg.,
Texaco
&
Ref.
(“PMPA”
“Act”),
(7th Cir.1994).
15 U.S.C.
2801-
Both the text and struc-
2806. Dersch contends that
the district
ture of the Act indicate that Congress
2805(f)(1)
court
in ruling
erred
does
enacted the PMPA dispari-
address the
provide
an implied private right
ty
in bargaining power then existing be-
action to enforce the statute’s provisions.
tween
(typically major
franchisors
oil com-
Furthermore, Dersch
panies)
asserts that even if
petroleum
franchisees
Oil,
does not contain
implied industry,
Beck
25 F.3d at
and “to
private
action,
right of
it is still entitled to
level the playing field on which
par-
these
maintain a claim under the
Beachler,
PMPA because
ties interact.”
856 Cir.1995) (7th (citing Co., 744 51 F.3d of and nonrenewal franchises petroleum 2805(c)). principles foregoing the § With relationships. See franchise petroleum merits of mind, now turn §§ we 2801-2806. 15 U.S.C. generally from termi franchisors lawsuit. prohibits Dersch’s a fran discontinuing franchise or nating a 2805(f)(1) § 15 U.S.C. B. Dersch’s 2802(a), un § 15 relationship, U.S.C. chise claim one to pursuant does so the franchisor less Act, 15 in the enumerated grounds ap the argument of first 2803(c), 2802(b)(2)-(3) or §§ U.S.C. franchi provides § that peal is con requirements notification meets the of action right implied private an with sees Thus, 2804. U.S.C. 15 tained in provisions. to enforce statute’s between a balance PMPA strikes is no “there this is so because claims fran rights of franchisors and of rights legislative or language in the suggestion important chisees, affording franchisees by 2805(f)(1)” a fran history of Section at the while rights, procedural but limited the nonrenewal demonstrate must chisee sig with franchisors providing same time relationship, pursuant franchise of its changing respond latitude nificant 2805(c), maintaining a suit before Beachler, at 112 F.3d market conditions. franchisor’s violation for a the PMPA F.2d Oil 677 904-05; v. Brach Amoco meaning of plain While the statute. Cir.1982). (7th 1213, 1220 2805(f)(l)’s clearly important, text is or a franchise terminates aIf franchisor con be must still statutory subsection a franchise renew fails to Smith v. context. in its proper strued PMPA, the franchisee with the accordance (7th Cir.2001), 446, 448 F.3d Zachary, 255 civil action under may maintain denied, S.Ct. cert. U.S. (b). 2805(a) Lippo v. Mo U.S.C. and/or (2002) (holding “[t]he 152 L.Ed.2d (7th 706, 720 Cir. Corp., bil Oil when meaning applicable is rule plain 1985). prevail, franchisee order to clear, unambiguous, is statutory language matter, a termi a threshold as prove, must act parts other controlled and not or the nonrenewal its franchise nation of “A subject.”). same acts on the or other mean relationship within the its franchise not a whole and passed is statute (“the 2805(c) Act. 15 U.S.C. ing of the by one is animated or sections and parts prov have the burden shall franchisee Consequent intent. purpose and general or the franchise ing the termination be con should ly, part or section each relationship.”); of the franchise every part other in connection strued (“It Beachler, is at 905 course harmonious produce so as or section burden under initial the franchisee’s Thus, to confine proper it whole. is that its establish PMPA to section to be to the one interpretation if ... and not renewed been terminated J. Suth Singer, 2A construed.” Norman burden, is our satisfy inquiry fails it § 46:05 Statutory Construction erland end.”).9 only then that It is ed.2000). going for has “the burden franchisor in the is contained Section establishing that is entitled [and] ward along provisions” “enforcement PMPA’s forth defenses set the affirmative to one of 2805(a), which entitled 15 U.S.C. 2802(b), with §§ [i.e., 15 U.S.C. in the Act action “maintenance civil 2803(c) Petroleum Marathon ].” Duff agreement. See right expiration of gives franchisees The PMPA 2805(b)(2)(A)-(B). prior to U.S.C. injunction preliminary seek a
857
franchisor; jurisdiction
venue;
against
franchisor’s
statutory
violation
this
sub-
action,” id.,
time for commencement of
and section.
Gonzaga
Doe,
See
Univ. v.
536
all
statutory
delineates
require-
273,
2268,
U.S.
2275-76,
S.Ct.
ments for maintaining a
cause
action
(2002)
L.Ed.2d 309
(holding that “even
the PMPA. See also 15 U.S.C. where a statute
phrased
in such explicit
2805(b)
(outlining statutory
require-
terms,
rights-creating
a plaintiff suing un-
obtaining
ments for
equitable relief under
der an implied right of action still must
Act).
2805(a)
provides
Section
show that the statute manifests an intent
a
“[i]f
franchisor fails to
with
comply
just
‘to create not
a private right but also a
requirements of section 2802 or 280310 of private remedy.’”). As we recently em-
title,
this
may
franchisee
maintain a phasized in Miller Aviation v. Milwaukee
”
civil action against such franchisor....
County Bd.
Supervisors,
into it.” Transamerica Mortgage Advis
Id.
729-30 (quoting Alexander v. Sando-
ors,
(TAMA)
Lewis,
Inc.
444 U.S.
val,
275, 286-87,
532 U.S.
121 S.Ct.
19-20,
100 S.Ct.
supported by if
even
different
compromised
diminished,
or
in any manner
grounds
from the
upon by
relied
whatsoever,
dis
its ability
prem-
to lease retail
”) (citation omitted).
trict court.’
Instead,
ises
sell branded motor fuel.13
fact,
Dersch has continued to sell
litigation pursuant
Shell-
this
to the terms of the
throughout
branded motor
fuel
Agreement.
course of
Renewal
”
15 U.S.C.
relationship,
a franchise
offer of
that the
argues
2801(14)
added),
required
basis,”
(emphasis
“take-it-or-leave-it
on a
renewal
2802(a)(2), it must demonstrate
2805(f)(1),
a “fail- by
constitutes
§of
violation
compo-
PMPA,
essential
even
one of
three
at least
renew”
ure to
has been
“franchise”
statutory
petroleum
nents of
franchisee’s
when a
interde-
principle
fact,
renewed. The
This
has,
been
discontinued.
—which
of our
certain
than a restatement
more
nothing
between
pendence
un-
however,
argument
PMPA,
whether
applies
make
holding in Beachler —
claim
tenable.
constructive
franchisee’s
of its franchise
assignment
is based
petroleum
aof
composition
alleged violation
or of a franchisor’s
*14
in
precision
with
delineated
franchise is
not ar-
does
Because Dersch
§
and
for “franchise”
definitions
the Act’s
alleged violation
the defendants’
gue
de
The PMPA
relationship.”
“franchise
2805(f)(1)
nonrenewal
§
resulted
of
relationship”
“franchise
fines the term
fuel
motor
premises,
retail
a lease of
of
or
marketing
fuel
motor
respective
“the
contract,
to use
or the contract
supply
responsibilities
and
obligations
distribution
with retail
in connection
Shell trademark
which
a franchisee
franchisor and
of a
the nonrenew-
sales, it
demonstrate
cannot
fuel
of motor
marketing
from the
result
”
2801(2)
within the
§
al of
franchise
15 U.S.C.
a
under
franchise.
added).
PMPA.
meaning
“franchise”
of the
The term
(emphasis
franchisor,
between a
any contract
means
with Dersch’s
problem
central
2801(3),
§
and a
by 15 U.S.C.
as defined
district
with the
and indeed
argument,
U.S.C.
franchisee,
15
as defined
below,
it pre
is that
reasoning
court’s
au
2801(4),
the franchisor
§
under which
only
can
enforce
a franchisee
sumes
use,
“to
franchisee
permits
or
thorizes
2805(f)(l)’s
prohibi
waiver
§
release and
sale, consignment,
connection
claim.
a PMPA
context
tion in the
fuel,
trademark
of motor
a
or distribution
a
for
possible
certainly
is
While
[fran
controlled
such
or
which is owned
2805(f)(1)
in the non-
result
violation to
permits
or
authorizes
... which
chisor]
relationship,
a
renewal of
franchise
2801(1)(A). A
15
such use.”
U.S.C.
a fran
When
always be
case.
will not
contracts
the essential
covers
“franchise”
2805(f)(1)
not
does
chisor’s violation
a
franchisee—
a franchisor
between
fran
parties’
in a nonrenewal
result
trade
supplier’s
i.e.,
to use
contract
resort
a
must
relationship,
franchisee
chise
sales, con
with retail
mark in connection
vindi
PMPA
outside of the
to remedies
fuel to be sold
supply of
tract for
We
rights under
statute.
cate its
for
trademark,
of premises
a lease
reasons.
for several
reach this conclusion
2801(1).
A
15 U.S.C.
of fuel.
the sale
with,
repeatedly em
as we have
begin
To
entity
“an
then
relationship”
is
“franchise
designed
PMPA is
phasized, the
from,
by, the ‘fran
but
separate
defined
petroleum
aspect
narrow
regulate a
existing
chise,’
arrangement
or contractual
relationships
termination
franchise
Corp. v.
—the
parties.”
Unocal
between
franchise
franchises
(9th
n. 6
764
177 F.3d
Kaabipour,
§§ 2801-
generally
See
relationships.
added).
Cir.1999)
also Han
See
(emphasis
it is
While
true
(9th
872, 876
73 F.3d
Corp.,
v. Mobil Oil
disparity of
to address
was enacted
Cir.1995). Therefore,
when a
fran
existing between
power
bargaining
“failed to
that a
alleges
franchisor
the termi
outside
franchise
chisors and
relationship,
franchise
parties’
renew”
context, i.e., during the
continue,
“reinstate,
extend the
i.e.,
nation/non-renewal
negotiation
thereto)
process for entering into or
any such
relation-
renewing a
relationship,14
there
ship unless such provision of such law or
nothing
in the
suggesting
regulation is the same as the applicable
Congress intended for franchisees to sue
provision of.this subchapter.
franchisors under the
provi-
Act’s remedial
2806(a)(1)
15 U.S.C.
added).
(emphasis
sions
violations of
when
By specifying with such precision when
termination or nonrenewal is not at issue.
the States must stand aside in favor of
As previously explained, “even where a
federal
regulation, Congress
implicitly
phrased
statute is
explicit
such
rights-
marked
outer bounds of the power it
terms,
ereating
plaintiff
suing
an
intended
exercise.15 Geib v. Amoco Oil
implied right of action
must
still
show that Co.,
(6th
29 F.3d
Cir.1994);
the statute manifests
intent
‘to create
Continental Enterprises,
Inc. v. Am. Oil
just
private right
but
private
also a
Cir.1986);
Esso
”
remedy.’
Univ.,
Gonzaga
S.Ct
Standard Oil Co. v. Dept.
Consumer
(citation omitted).
2275-76
By not amend- Affairs,
(1st Cir.1986).
ing the PMPA’s
remedial
in-
Beyond
limits,
those
“state regulation may
*15
clude a private right of action to enforce
claim full federal approbation.” Continen
2805(f)’s
provisions, Congress made
tal Enterprises,
To the extent that any provision this of mind that regulation petroleum applies subchapter to the termination franchise (or relationships has traditionally furnishing of notification with been a matter of local concern in which the thereto) respect franchise, any or to parties frame their (or relationships with ref the nonrenewal the furnishing of erence to State law. Hanes v. thereto) Mid-Amer notification with respect any Petroleum, Inc., ica 637, 577 F.Supp. 644 no relationship, any State or franchise (W.D.Mo.1983). 2805(f)(2); political subdivision may Lippo, thereof adopt, Cf. enforce, 776 or F.2d at 712 (holding petroleum continue any in effect provi- sion any agreements law or franchise regulation are (including interpreted ac any remedy or penalty applicable cording law); Brach, to state any contract 677 thereof) (same). violation F.2d respect with at 1217-18 Congress termi- enacted (or nation the furnishing of the PMPA to notification federalize the standards thereto) with respect any such which petroleum franchises are terminated fran- (or chise or to the nonrenewal fur- petroleum franchise relationships are nishing of notification with respect nonrenewed, not to create com- federal 2805(f)(2), See 15 also U.S.C. pro- application which 15. This is an of the familiar canon "interpretation statutory vides expressio that the construction est unius enforcement” alterius, provides exclusio which “to ex governed "franchise” be shall by the press or thing include the one implies the law of the State "in which the franchisee exclusion of the other....” Black’s Law Dic principal place [its] (empha- of business ...." (7th ed.1999). tionary 602 Freight See also added). sis 280, Corp. Myrick, 288, liner v. 514 U.S. 1483, (1995). S.Ct. 131 L.Ed.2d 385 our federal- structure of given the unusual petroleum for governing mon law noted As we government. system of ist Co., 886 Amoco Oil v. O’Shea agreements. Inc., 16 v. Exxon Coal Spearman USA Cir.1989). (3d In other 584, 593 (7th Cir.1994), “[m]any federal F.3d 722 designed to words, the was point jumping-off rules serve as forum a federal with franchisees provide into converting these claims state without con of run-of-the-mill for the resolution at 725. See law.” Id. federal claims under in this issue those at like disputes tract Austen, also Seinfeld nonrenewal, termination or Without case. Cir.1994) law ac- (noting that state PMPA. claim under has no Dersch a violation premised ofttimes tions are bring a however, is, entitled law). of federal under rights enforce its law claim state determination, reaching this In duress. 2805(f)(1), economic such suggesting no means are we Harrold, Wildman, Al See, Hurd v. e.g., lev at the state only operates Ill.Dec. Dixon, Ill.App.3d len & im contrary, if franchisor el. On (1999) (holding 707 N.E.2d of a the renewal conditions permissibly is a condition duress that “[e]conomic relationship on the wrongful act or by a is induced where one or state law waiving federal releasing or to make contract threat of another refusal the franchisee’s rights, and ex one of the deprive circumstances results conditional renewal agree will.”). free own ercise one’s relationship, the of that in the nonrenewal Provisions Disputed event, whether 2805(f)(1) may §of franchisor’s violation a ques is not state law the fran conjunction are voidable be examined *16 of its the reme resolved under for the tion that can be chisee’s claim See, e.g., Carter relationship. franchise the of PMPA. dial U.S.A., Corp., a Div. Exxon Exxon Co. therefore, a franchi- We, that if conclude (3d Cir.1999); 197, River 200-03 the renewal conditions impermissibly sor Co., 41 Inc. v. Shell Oil Enterprises, dale relationship franchise petroleum aof (D.Mass.1999). 56, See 64-67 F.Supp.2d a any right relinquishment the Corp., 84 Mobil Korangy v. Oil also law, or state under federal franchisee has (D.Md.2000). F.Supp.2d 666-67 of that relinquishment the coerced and franchi- Moreover, requires the PMPA in a nonrenewal result right does not a formal franchisees with provide sors relationship, franchise parties’ nonrenewal, or termination notice outside resort to remedies franchisee must cases, 90 which, given must be in most enforce context Dur- 15 U.S.C. days advance. 2805(f)(l)’s prohibi- release and waiver may, a franchisee 90-day period, ing this exclusively, through if not primarily, does, tion— injunctive relief to seek and often 2805(f)(l)’s Section law state remedies. terminating franchisor from prevent then, in this prohibition and release waiver its franchise nonrenewing its franchise case, a claim under Dersch with provides standard the lenient of the validity Act in 15 U.S.C. challenge law to provided state Beachler, 2805(b)(2).16 F.3d certainly not This is Disputed Provisions. party not been ship he a has 2805(b)(2) is a district which provides that 16. Section renewed, injunction preliminary required to issue questions if: (ii) sufficiently serious there exist (A) shows- questions the franchisee such going merits to make (i) party is a of which he litigation; ground fair relation- or the franchise been terminated (noting that a recently “franchisee is entitled to a circuit made this same observa- injunction tion, preliminary under the Act based noting: upon showing lesser than would be re [A] franchisee go [need not] out of quired ordinary in the case under Fed. business in order to obtain relief from 65.”) R.Civ.P. Because courts “[district improper nonrenewal. A franchisee enjoy ... broad in fashioning discretion presented with a renewal agreement so remedies, temporary equitable especially coercive that it suggests that fran- standard,” Koy under the PMPA’s lenient chisor’s ulterior motive is to prevent re- Realty lum v. Peksen Corp., newal can agreement. refuse the If the (2d Cir.2001), a district court has the renew, franchisor is unwilling it must power preserve quo status between notify the franchisee of nonrenewal nine- parties during pendency ty days before the nonrenewal is to take (i.e., litigation existing terms of the 2804(a). effect. 15 U.S.C. During relationship). Id. In this re interim, ninety-day the franchisee spect, protects the PMPA franchisees not may seek a preliminary injunction to arbitrary discriminatory from prevent enforcement of the nonrenewal. nonrenewal, termination or but also from Under the protection injunction, of an the harmful effects of threatened termi the franchisee can continue operating its See, e.g., nation or nonrenewal. Shell v. business on the previous terms of the Co., Shell Oil 216 F.Supp.2d 639-40 agreement while the merits of its action (S.D.Tex.2002). against the franchisor are resolved. availability injunctive relief en- Thus, assertion that it was sures that a franchisee need go out forced to Agreement execute the Renewal of business before seeking relief from rings noted, recently hollow. As one court improper nonrenewal. “[bjecause a franchisor cannot terminate Jet, Inc. v. Shell Oil 2002 WL notice, providing requisite without (N.D.Ill. 22, 2002). *4 November threats of termination unaccompanied by Beachler, See also (holding F.3d at 905 explicit pursuant notice 2804 have no *17 “Congress’ that purpose remedial in enact teeth.” Shell Oil 216 F.Supp.2d at ing provision the is reflected in the issued, 640. Once the 2804 notice is the providing injunctive for preliminary re may immediately avail itself of lief.”). 2805, id., the protections by afforded and therefore Dersch was the The in'making dissent claims that this by i.e., “Catch-22” envisioned point we have contradicted the crux of our dissent — waiving legal either its rights under holding i.e., that a franchisee cannot — 2805(f)(1) or committing “economic sui- maintain a claim for a violation cide” allowing gasoline supply be unless results in the nonrenewal of the A terminated. district court within our —because: (B) that, balance, the court determines on reasonable chance of success on the merits” hardships imposed upon the franchisor of its claim of a PMPA violation and that the preliminary injunc- issuance of such hardships tips balance of in its favor. Beach tive relief hardship will be less than the ler, Additionally, F.3d at the fran imposed upon which would be such fran- chisee need not establish that it would be preliminary injunctive chisee if such relief irreparably harmed in the absence of an in granted. were not junction. Id. Thus, once the franchisee a termi establishes nonrenewal, only prove nation or it need “a nonrenewal, that, of in This definition constructive effect, majority saying is however, cannot be reconciled the one before case like
§a 2805(c)’s is of nonrenewal us, statutory holding notice in Beachler court’s it- must, nonrenewal of a equivalent as precise that franchisee requirement nonrenewal may be treated matter, nonre- self demonstrate threshold This maintaining suit. of purposes for relationship. Fur- of its franchise newal course, the validi- recognizes position, re- the dissent’s thermore, contrary to nonrenewal, concept ty of constructive assertions, reject do not we peated has otherwise majority opinion that the accept- approach constructive nonrenewal to demolish. thoroughly attempted cir- majority of our sister by the vast ed at 869. Dissent recognizes opinion specifically cuits. Our may bring a a franchisee cause the dissent is respect,
In one
when a franchi-
of a notice
the PMPA
issuance
action under
a franchisor’s
correct:
equivalent
of one
precise
is the
in the loss
actions result
sor’s
F.2d at 720
Lippo,
nonrenewal.
statutory components comprising
three
brought
an action
(noting
i.e.,
“[i]n
lease
“franchise” under
Act—
2805(a)
has the bur
the franchisee
contract,
section
supply
fuel
premises, motor
retail
nonrenewal]
[or
termination
proving
den of
use the franchisor’s
or the contract
(This
really
must
mean
franchise.
cases,
this circuit
In such
trademark.
[or non-renewal]
attempted termination
if
have held that
of our
circuits
several
sister
use.)”)
is to be
injunctive
relief
may
an action under
a franchisee
maintain
Jet,
Inc.,
added);
2002 WL
(emphasis
the nonrenewal of its
2802 for
“[b]y lowering
(holding
at *5
commonly
is
relationship; an
which
action
2805(b)(2)],
showing
required
[under
to as a claim
“constructive
referred
nonre
prevents
Act’s remedial scheme
906;
Beachler, 112 F.3d at
nonrenewal.”17
a franchi
until
taking place
from
newal
Oil, Inc.,
&
Exploration
v. B.P.
Shukla
merits.”).
heard on the
case can be
see’s
(11th Cir.1997);
115 F.3d
852-54
when it asserts
is also correct
dissent
v.
Gulf,
Hill
Inc.
Cumberland
Chestnut
from
precluded
a franchisee is not
(1st
Farms,
Inc.,
744, 750-52
940 F.2d
merely
the PMPA
seeking relief under
Cir.1991);
Ackley
Corp.,
Oil
Gulf
to issue a
franchisor failed
because the
mem.,
(D.Conn.),
F.Supp.
aff'd
Dissent
notice of nonrenewal.
formal
(2d Cir.1989); May-Som
According
“[e]on
to the
See
by the Ninth Circuit.
been endorsed
means treat
merely
nonrenewal
structive
U.S.A.,
Texaco,
Sales,
792
Inc. v.
Pro
in fact
literally or
something which is
ing
(9th Cir.1986).
Sales,
In Pro
for
nonrenewal as actual
not
signs
“a franchisee who
the court held that
Dissent
869.
litigation.”
purposes
label, however,
directly expressed, but
"not
be
structive means
can
17. The "constructive”
inferred,”
English
Compact
Dic-
The
confusing.
does
This characterization
Oxford
i.e.,
(2d ed.1989),
tionary
or
an indirect
a
can maintain PMPA
that a franchisee
mean
or nonrenewal. See
disagree-
policy
informal
termination
based
claim
Beachler,
PMPA,
at 906.
con-
112 F.3d
of the
In the context
ments.
a
protest
successor contract under
of its holding.
a
because
Co.,
F.Supp.2d at 641
216
Oil
renewed,
must
also Shell
franchisee
been
license
does not have
(holding
Court
“[t]his
level to enforce
at the state
seek redress
a
that Con
remedy
a
into
statute
to read
the franchise
under
rights
contract
its
2804 and
not
Section
gress
did
enact.
violations of
agreement
i.e.,—
ag
remedies for
provide adequate
2805
non-renewal
constitute a
that do not
with the balanc
consistent
grieved dealers
ordinary con-
instead
PMPA but are
intend
PMPA drafters
interests the
ing of
disputes.19
tract
omitted).
(internal
achieve.”)
citation
toed
fate.
dictated its
Here,
actions
all,
a diminu
“constituted
After
the PMPA
is
the defendants
Dersch allowed
Had
franchisors
rights of
property
of the
tion
non-renewal,
its
of
a formal notice
sue
interpreted
not be
thus should
and
would have
with the defendants
dispute
language and
beyond
original
its
reach
contract
a mere
from
transformed
been
Gulf, 869 F.2d
May-Som
purpose.”
(within
days)
90
into a non-renewal
dispute
921.
allowing
relationship
franchise
of its
—thus
case,
2805(c)
chose to renew its
In this
and
its burden under
it to meet
relationship with the defen-
franchise
via
the defendants
against
maintain suit
the benefits of renew-
However,
reaping
2805(a)-(b).
signing the
dants —thus
(i.e.,
of
supply
branded
its
al
the continued
renewing
thus
and
agreement,
renewal
objected
provi-
to contract
“franchise,”
gasoline)
it
Dersch divested
statutory
—but
of
to be violative
sions that
deemed
bring an action
right
of
self
Disputed Provi-
While the
are
Although federal courts
PMPA.20
2805(f)(1),they
may indeed violate
“a liberal
sions
grant
required to
on Derseh’s statuto-
clearly have no
overriding
impact
is
consistent with
construction
such,
Brach,
pre-
Dersch is
franchisees,”
“franchise.” As
ry
protect
purpose
using
provisions
the remedial
“to cluded from
empowered
not
we are
F.2d at
a
defendants for
the PMPA to sue the
carefully
of
with
PMPA’s
take liberties
of its franchise
nonrenewal”
the stat
“constructive
reengineer
stated
of the essential statu-
relationship when all
justice.” C.K.
rough
ute in the name
its PMPA franchise
tory components of
Enterprises
Inc. v.
&
Motiva
Smith
signifi-
Sales,
filing
the PMPA.
to endorse
suit under
seems
In Pro
the court
may forego the
concept
formally express-
a
that it
cance of the notice is
2805(b)(2)
simply issue
requirements
intent to discontinue
es
franchisor's
by signing an
injunction
a de
itself
(within
facto
parties’
franchise
protest because the franchi-
agreement under
a
days),
constitutes
"nonrenew-
and therefore
under the
ability to continue in business
see’s
Thus,
2805(c).
purposes
if
al” for
its
"illegal” contract
is within
of an
terms
control,
indirectly result
actions of
franchisor
whereas the
F.2d at
n.
(e.g.,
assign-
an
or nonrenewal
termination
"uniquely
injunction
within
an
is
issuance of
franchise), and no notice is
issued
ment
grant....”
power
the district court
action,
however,
conjunction
the franchisee
approach,
such
To follow
Id.
substituting
judg-
precluded
filing
clearly
in this court
from
suit under
would result
is
not
course,
That,
Congress.
that of
PMPA,
ment
absence of such notice.
even in the
judiciary, United
proper function
Beachler,
at 903-04. The central
McKinney,
States
whether the
inquiry in both instances is
fran-
Cir.1996),
aspect of
we
find this
therefore
statuto-
the franchisee’s
chisor has terminated
reasoning unpersuasive.
Sales court’s
the Pro
parties’
ry
to renew
failed
formally expressed
relationship, or
noted,
previously
a formal notice
20. As
prerequisite
its intent to do so.
necessarily a
is not
*20
Beachler,
remain intact.
alleged violation of does not A. constitute a parties’ nonrenewal of the The district attempted court to avoid within meaning such a by harsh result tentatively allowing We, therefore, of the PMPA. Affirm recovery on theory of constructive nonre- judgment granting district court’s the de- newal. Such a theory has clearly been rec- summary judgment fendants of Dersch’s ognized circuits, see, in some e.g., Pro PMPA claim and denying Dersch’s motion Sales, Texaco, Inc. v. USA summary judgment, as well as (9th Cir.1986) (“[A] franchisee who court’s denying order Dersch’s motion to signs a successor contract under protest judgment, alter or amend its for the rea- and promptly seeks to invoke its rights in opinion. sons stated this ... the PMPA has not ‘renewed’ the franchise relationship so as to bar relief CUDAHY, Judge, Circuit dissenting. PMPA.”), under the support finds in Circuit, dicta in the Boyers Seventh see I. Inc., Refining Texaco Marketing, & question study- that remains after (7th Cir.1988) (“Our 813 n. 4 ing opinion of the district court and decision Boyers right waived his (which that of the majority affirms the to raise the ‘constructive nonrenewal’ ar- district court applying analy- different gument appeal should not affect his sis) is possible purpose obvious: what ability pursue theory this on his main Congress could had in amending have claim if the facts supporting theory 2805(f)(1)? in 1994 to add Al- are laid out sufficiently Boyers’s Second though the district provide court set out to Amended Complaint.”). theory This some sort of admittedly substance for this treats a renewal achieved threats piece remedial legislation, federal way termination in the same aas literal were, end, efforts in the about as fruitless However, nonrenewal. in exploring this majority, as those of the which virtually promising approach, the district court 2805(f)(1) was writes out of the United astray treating led into ap- States majority Code. The can specu- plicable only to prospective provi- contract late the section was give intended to sions and not to those contained unspecified some unspecified heft to some Thus, agreements. earlier franchise remedy thereby completely state depart- — ing from district court’s remedying the broader aim of constructive nonrenewal gross disparities in analysis, although initially encouraging, franchisor-franchisee bargaining power providing regulatory thorough erasing almost as *21 2802(b)(3)(A) to validate § justification of taken as is the route the federal code
from that have been Provisions Disputed majority. by the aAs mat past agreements. in contained it though even majority opinion, The 2805(f)(1) law, § that terms violate ter of ap- nonrenewal rejects the constructive proposals. faith good qualify cannot analysis applied of disapproves proach, on the good in insist can faith How one draining in court district by terms forbid agreement in the of inclusion court after that § of substance See, Village, e.g., Coast by den statute? the- a constructive nonrenewal applied LLC, 163 Enterprises, Equilon Inc. v. “agree[s] with Dersch’s majority ory. The (C.D.Cal.2001) 1136, 1178 F.Supp.2d the dis- that respects” in arguments some to (“Notwithstanding Plaintiffs’ failure re of the constructive application trict court’s Defendant by presented evidence but the giving it “‘kept from theory nonrenewal provi of the development faith good of its to the sub- whatsoever any consideration ... agreement(s) several in the new sions of Section requirements stantive require agreement^) new provisions of the 2805(f)(1)’” to ‘franchisors “permits and by or fed rights protected state waiver of the waiver or re- upon to insist continue law, thereto agreement therefore eral and historically have they if rights, lease ” effect renewal of required to cannot be (quoting at 858-59 Maj. Op. done so.’ franchises.”); Enter Riverdale Plaintiffs’ 21). 14, 20, In other Br. at Appellant’s F.Supp.2d Inc. v. Shell Oil prises, holding in words, court erred the district (D.Mass.1999). of a franchise new only that § prohibition prohibition could invoke To confine agreement terms, 2805(f)(1). say: terms, to in majority goes only changes on to § to new or sup- finds no simply a that is construction meaning that think [W]e 2805(f)(1). Maj. § clear; the text of See 2805(f)(l)’s port in a franchisor text rely to on at And Op. renewal a fran- may not condition 2802(b)(3)(A), franchisors permits releas- which on a chise agreement or rela- waiving rights under federal to nonrenew franchise ing or such, agree cannot to a franchisor if the franchisee refuses law. As tionship state 2805(f)(l)’s in good and made release and additions changes circumvent to business, offering renew is to to the normal prohibition waiver faith in course relationship that parties’ franchise contradiction indulge unlawful good identical to those offered terms conditions terms can somehow be agree- prior faith in the normal course of business. contained Inc., ment, agreement F.Supp.2d was prior whether the Village, See Coast Inc., 1178; or after enactment Enterprises, entered into before Riverdale per- Nor is franchisor F.Supp.2d of the statute. at 67. 2802(b)(3)(A) good [the mitted use Therefore, I with the agree while dis- around do an end run proviso]
faith Sales, Inc., Pro following trict court 2805(f)(l)’s prohi- and waiver release find a for this lawsuit supra, basis bition. analy- through a constructive Maj. Op. at 869. sis, approach can agree I cannot court, thwarted, the district as was fully these be agree
I
more
could not
only
new terms or to
by restricting it
majority
reject
of the
observations
2805(f)(l)’s
terms,
by employing the
changes in
application
court’s
district
I
proviso
trump
good
faith
new contract terms
prohibition
option, a
preferred
as a
pursue,
faith would
good
court’s invocation
*22
constructive
in
analysis,
ing
nonrenewal
but
And,
be clearer than
could
this.
of
2805(f)(1)
course,
§
apply
that context
to
would
it is the
my observation,
basis of
to
Disputed
though
the
Provisions here even
which
majority
the
now objects, that the
they have been included in
past agree-
must either
rights
its
waive
un-
2805(f)(1)
Further,
§
der
ments.
I would not
or
permit
commit economic sui-
2802(b)(3)(A)
cide
good
proviso]
allowing
gasoline
faith
its
[the
to
supply to be
2805(f)(1).
cut
franchise).
prohibition
(through
ovenide the
of
nonrenewal of the
The majority,
in
also
its
response
first
to
B.
dissent,
my
points to provisions for a no-
points
The
which majority attempted
the
tice of nonrenewal and for
pre-
associated
to make
response1
first
to
obser-
the
liminary injunctive relief as affording remarkable,
vations of the dissent are
but
escape from the “Catch-22” which I have
far from convincing. Citing
provisions
the
2805(b)(2).
outlined. 15 U.S.C.
In ef-
of the PMPA
days’
for 90
formal notice of
fect,
the majority
that,
saying
in a
nonrenewal, together with the associated
2805(f)(1)
us,
case like the one before
injunctive relief,
for preliminary
the statutory notice of nonrenewal is the
majority
the
has contradicted most of what precise equivalent of nonrenewal itself and
it carefully attempted to
demonstrate
may be treated as nonrenewal
pur-
for
Thus,
part
opinion.
the earlier
of its
the poses of maintaining suit. This position,
majority
gone
great lengths
to
to es-
course,
recognizes the validity of con-
tablish that
can
there
be no
claim
federal
nonrenewal,
structive
a concept that
the
2805(f)(1)
based on
unless there has majority opinion has otherwise attempted
been an actual termination or nonrenewal
thoroughly to demolish. Constructive
that,
of a
majority
franchise. The
says
“if
merely
nonrenewal
means treating some-
a franchise impermissively
conditions
thing
literally
which is
or in fact not non-
renewal of a
on the
renewal as actual
for purposes
franchisee releasing
waiving
or
federal
litigation.
A
part
substantial
of the
state law rights, and the
re- majority opinion is
to showing
franchisee’s
dedicated
agree
this
conditional renewal
the error of
nonrenewal,2
constructive
yet,
fusal
results in the nonrenewal
that relation-
in response
dissent,
majority
ship,
franchisor’s
violation
of argues
statutory
that the
of nonre-
notice
may
conjunc-
be examined in
really
newal
amounts to actual nonrenewal
tion with the franchisee’s claim for the
for purposes of sustaining a lawsuit based
nonrenewal of its
franchise relationship.”
§on
This is a
con-
convenient
added).
Maj. Op. at 862 (emphasis
Noth-
simply
tradiction that
will
hold
water.3
reader,
1.
seeing
The
majority opinion
parties'
in a nonrenewal of the
franchise rela-
simultaneously
dissent
parts
single
of a
tionship, a franchisee must
resort
remedies
text, may
interplay
find the
various
outside of the
rights
PMPA to vindicate its
arguments
counter-arguments
both mud-
Maj. Op.
statute."
860.
dled and contradictory,
they
since
have been
composed
another,
progressively, one after
3.Now,
(as
hope
look at
compose
I
I
I
what
layers
and are found
sedimentary
like the
footnote)
chronologically-last
is the final
strata of the fossil record.
I have tried to
majority
version
dissenting opin-
provide some
temporal
sense where in the
ions.
I see that in the course of numerous
particular
evolution of this dissent
comments
passages back and forth of drafts of these
belong,
recognize
but
difficulty
I
the extreme
opinions
(and
majority
between the
and me
keeping things
in coherent order.
consequent
passages)
revisions
these
Thus,
states,
majority
majority opinion
"When a
franchi-
seems
have
evolved
sor’s violation does
disapproval
not result
from emphatic
theory
of a
of con-
this cir-
only case from
Additionally, the
stan-
also asserts
majority
majori-
Beachler,
cuit,
support
cited to
relief
preliminary
dards
Dersch should have
ty’s
contention
in their demands
are lenient
agreement and
sign
the renewal
refused
hardly be lenient
can
They
franchisee.
statutory notice of
receiving
upon
when
filed suit
relief
preliminary
provide
enough to
*23
proposi-
the
not stand for
does
there
nonrenewal
elsewhere
analysis
majority’s
by the
requires such formal
relief
PMPA
under
tion that
relief
permanent
no
can be
Beachler, 112
under
2804.
declaratory
in notice
or
2805(f)(1) injunctive,
—
supports
Beachler
the
anything,
an actual
If
has been
there
damages—unless
cause of
PMPA
And,
that Dersch’s
proposition
if suit
franchise.4
of the
nonrenewal
said “take-
the moment Shell
action arose
by treating notice
may be maintained
by
it-or-leave-it,”
unaffected
and was
equivalent
functional
as the
.
nonrenewal
pro-
under
signed
or not
there whether
itself,
need would
what
nonrenewal
avail-
analyzed the
Beachler we
test.
In
private
titled “a
formally
something
be for
under the
ability of relief for franchisees
fact,
majority’s
if the
of action”?
right
whether
regard
without
PMPA
to
is cor-
90-day
provision
notice
of the
view
formal
un-
termination
nonrenewal or
notice
recognizing
proce-
rect,
is
a
majority
the
at
See id.
was ever issued.
is
der
respect
relevant
every
dure which
2804-
(“Once
plans for the as-
Amoco’s
right of 903-04
private
to a
functionally equivalent
finalized, affect-
were
and sales
signments
for the franchisee.
action
and seems to me
text of the statute
from the
of that
to
embrace
nonrenewal
structive
approach.
way superior
Sales
says
to the Pro
in no
majority in effect
approach.
now
The
Nonetheless,
pleased
this
I
that
dissent
am
procedural error.
only a
that Dersch made
the concession that
resulted in
merely
apparently
gasoline distributor
small
Had this
and well—
is alive
nonrenewal
constructive
in-
a
notice
termination
waited for
formal
slightly
form than that
a
albeit in
different
agreement un-
signing the franchise
stead of
by
Sales. How these
pursued Dersch and Pro
to liti-
been free
protest, he would have
der
by the franchisor
developments will be viewed
to his
rights
gate
under
his
re-
seen.
In the
community remains to be
heart's content.
dissent,
majority
fran-
sponses of the
to
possibility
men-
procedural
a
not
This is
lost
may
battle but
the
have won the
chisors
by
dis-
parties or
the
by
tioned
either
war.
aware,
nor,
by
as I am
court
as far
trict
(“In
the enforce-
anyone
prevail,
with
Op.
else in connection
Maj.
at 856
order
4. See
am not
rights
I
prove,
ment of
as a threshold mat-
the
must
franchisee
franchise.”);
ter,
Maj.
prepared
say
constructive nonrenewal
a ... nonrenewal of its
exist,
therefore,
("We,
by majority does not
but
that if
conclude
a
Op.
as outlined
the
at 862
expressly
certainly
relinquishment
not
federal or
majority's
[a
coerced
the
route
...
There is
right
of the statute.
not
in nonrenewal
provided in the words
does
result
state]
by Congress
relationship,
the
parties'
fran-
nothing
preference
the
to indicate
majority
outside
by
resort to remedies
chisee must
proposed
for the solution
2805(f)(l)’s
re-
open
context to enforce
path
Pro Sales
PMPA
outlined in
Maj. Op.
prohibition.”);
waiver
lease and
Dersch here.
("[I]f
impermissibly
However,
condi-
thing
a franchisor
important
is not
me
(not)
of a franchise
tions the renewal
observed
procedural
formalities
releasing waiving
or
federal
Dersch,
on the
possibility of
but
maintain-
rather
rights, franchisee’s refus-
supply.
law
suffering
or state
ing
a loss of fuel
suit without
agree to this conditional renewal results
al to
My
not be
position here is that Dersch should
relationship,
in the
before
deprived
opportunity
of this
case
2805(f)(1) may
§of
be
us,
violation
other
franchisor's
or
there was some
whether
conjunction
franchisee's
provided a similar
examined
procedure
might
have
noted,
of its franchise rela-
procedure
for the nonrenewal
claim
opportunity.
I have
As
tionship.”).
majority
clear
proposed
is far from
ed dealers in Peoria and Springfield were Shell made its take-it-or-leave-it offer of
orally
writing.
notified both
and in
renewal6 containing
Six of
the contract
terms
2805(f)(1).7
the sixteen dealers then instituted
violated
this ac-
preliminary
tion under the
for
majority’s
observations about Pro
relief.”).
injunctive
permanent
The fran- Sales and its relation to Dersch’s claim are
in Beachler filed
upon
chisees
suit
written
equally
First,
wide of the mark.
the ma-
pending assignment
notice of the
and were
jority faults Dersch
failing
to “prompt-
denied relief because “the franchisees”
ly seek to invoke
rights
have
assignments
failed
show that the
PMPA.” “Promptly” in the case of Pro
give
“would
rise to a termination or nonre- Sales, by the majority’s reckoning, appar-
(em-
newal under the PMPA.” Id. at 909
ently meant in
weeks,
days
matter of
*24
added).
phasis
significant
What is
is that
year
not a
However,
as in Dersch’s case.
the right to relief under the PMPA did not
I think this Pro
requirement
Sales
relates
depend upon
grounds
either of the
ad-
significantly to the kind of relief being
(1)
by
majority:
vanced
actual nonre-
sought.
Pro Sales the
appar-
(2)
newal or termination or
formal notice
ently asked
injunctive
for
relief. Dersch
2804(a).5
of nonrenewal under
There-
(which
requests only declaratory relief
I
fore,
I
already argued,
as
have
suppose might translate into reformation
cause
action
for constructive nonrenew- of-the
agreement)
and there is
al,
Beachler,
analyzed
under
arose when no particular
speedy
need for a
resolution
”
“nonrenewal,
majority's responses my
ap-
5.The
dissent
clearly
Beachler
does not
pear
recognize subliminally
require
that it is on
statutory
formal
notice of nonrenewal
perilous ground
newly
with its
prerequisite
conceived ac-
as a
to "nonrenewal.”
knowledgment that actual nonrenewal is not
precondition
a
to PMPA relief. Because the
Subsequent
majority opin-
revisions of the
expressly require
statute
statutory
does not
appear
ion
might, perhaps,
to indicate that it
precondition
notice as a
preliminary
to the
agree with the statement in the text when it
(it
by majority merely
relief cited
requires
requirement
lowers its
for a nonrenewal suit
concept
the still indeterminate
simply
of "nonrenew-
expression]”
a "formalf]
of an in-
2805(b)(2)(A)(i)),
al” contained in
Maj. Op.
tent to
natu-
nonrenew.
at 866 n. 20. This
question why
immediately brings
ral next
is
adopt
must we
to the
forefront what is
majority’s requirement
perhaps the
statutory
my disagreement
of formal
true kernel of
no-
majority
majority:
tice?
question
why
The
with the
how
answers that
is Dersch’s
citing to the
cause of
extinguished
district court of the
action under the PMPA
Southern
proposition
agreement
protest
District of
its
(ostensibly
Texas for its
under
that the
PMPA)
preserve
rights
absolute earliest
its
moment at which PMPA
under the
re-
trigger
lief is available is at
unlawful
statutory
the time
conditions that are the
formal
2804(a).
given
very rights?
notice is
those
bringing
In the interest
Shell v.
(S.D.Tex.
close,
F.Supp.2d
ques-
Shell Oil
this dissent
to final
I leave that
2002). However,
tion
majority
possible
for future discussion and
fails to indi
resolu-
how,
framework,
analytical
cate
within
tion.
this
have,
plaintiffs
Beachler’s
could
more
Dersch,
Beachler,
than
had a cause of
holding
action for nonre- 7. The ultimate
that there
nonrenewal,
having
newal based on Amoco
“announced its
was no
does not undermine this
intention[s]”;
that,
analysis.
holding
circumstance
like the
That
resulted from an ex-
Dersch,
given
take-it-or-leave-it offer
prospective
evi
amination of whether the
effect of
statutory
dences a total lack of
assignment
formal
notice
the announced
would be nonre-
Beachler,
of nonrenewal.
Similarly,
On case, may well have issue in the difficult court that Dersch’s district agree the sort of by to avoid designed been Shell 21.3 of the 21.2 and under Articles claim with which with franchisees 21.2 confrontation Article is succeed. cannot Agreement so, If the effort almost struggling. are Dersch is we because to Dersch inapplicable succeeds, end to deal but seems person.” one more than “composed of reality. than with 21.3, appearances to more with argues, designed Article in accordance with the argue, can managers and Shell require by contract Disputed that the language of Article personally the assume directors of Dersch ex- only enforceable to the I Provisions are corporation. Although obligations of Hence, by law. none permitted tent could arrive at how Dersch perceive can violate Disputed Provisions language the unusual interpretation of 2805(f)(1) at some they because would sweeping 21.3,1 assign such Article cannot to conform by Article 19 point taken be amended consequences provision to this legal good This has a manag- the PMPA’s strictures. I see how a whole. do not it, ques- directors, may there be serious parties ring who are not but ers and clause assigned timing. savings could be agreement, tions of While by par- date to amend obligations may operate at some future personal par- Overcoming right third after the provisions, ties. it does so the invalid 2805(f)(1) to which by bound a contract ty giving not to be rise to violation of the third require would party is not she claim has occurred. if were Even Article 21.3
party’s consent. for language of plain contractual by impose attempt Shell rights as a waiving of state law bids and this is hint- nonparties, obligations entering into a condition this is language, the unusual ed Therefore, vio agreement. legal possibility. simply not threat of occurs with the franchisor’s lation front, Shell asserts that a take-it-or-leave-it con On a broader Article 19 eliminates a fran savings containing clause of a term that waives tract law any alleged supporting rights. violation of Ac legal chisee’s state or federal Inc., 1399; Agree- Sales, action. Article 19 of the 792 F.2d at cord Pro *27 Inc., ment states: F.Supp.2d at 1176 Village, Coast (“Franchisees facing an immediate threat any provision that of this To the extent may any of nonrenewal sue is in conflict with valid Contract PMPA.”). pro contract Article 19 amends existing law on the effective enforceable have determined to vio thereof, be visions that been provision shall date Therefore, assuming a valid law. even to conform with such late deemed amended operates argues at the Article 19 Shell applies law as it to this Contract eventually amend a contract term takes action or would party time either 2805(f)(1) retroactively any rights under found to violate exercises or claims effect,9 into to the date the contract went provision. such legal requesting a franchisee's assumption, validity of which a waiver of 9. is an This not, se, First, illegal. rights per It is when clear is not clear. it is not part con- actually that waiver is of a take-it-or-leave-it provision in itself violates contract tract, nonrenewal if language speaks con- and there are threats of of the accepted, requiring is violated. duct franchisor in a state or of the Inc., waiver, Village, F.Supp.2d invalidity See Coast federal law not of the held, cases). (collecting There- provision have 1178-80 nn. itself. As other courts to undo the ante- operate Article 19 cannot Danijela Nedzad KRZALIC and threat. And it is the threat of non-
cedent Krzalic, Plaintiffs- acceptance of renewal renewal to induce Appellants, that forms the violating terms of the claim. basis lawyer
Would a advise her franchisee- CO., TITLE REPUBLIC abrogating client to submit to terms Defendant-Appellee. rights hope client’s state law No. 02-2285. would be amended the contract somehow law in the future? to conform state Appeals, United States Court of me be con- practical This seems to Seventh Circuit. problem. text which to view the Argued Nov. 2002. Decided Dec.
III. would, therefore,
I reverse and remand proceed-
to the district court for further
ings, and I Dissent. respectfully fore, standing per merely duplicating, part, court's unless waiver alone is what the illegal, might ruling already perspec- se Article 19 not ever take ef- done. From this tive,
fect. surplusage Article 19 is mere Although likely remedies. well-inten- Second, the effect of Article 19 in this con- tioned, might of Article be as enforcement sense, illusory. may, text in some be A fran- costly rights difficult and as enforcement of chisee faced with a take-it-or-leave-it contract under the PMPA. *28 containing provisions objectionable under say This is not to Article 19 lacks valid 2805(f)(1) terms, negotiate cannot those purpose. pursue If Shell were to a breach of phrase “take-it-or-leave-it” makes clear. franchisee, against contract action the fran- effective, After the Shell is contract becomes might by claiming defend the contract chisee simply going upon to remove those terms illegality provisions. void for of certain Ar- objection of a franchisee that might operate ticle 19 in such circumstances (especially major- has been under the violated offending to amend the contract ity’s eviscerating view such a franchisee's claim, primary Instead, and allow the breach of con- rights). point, litiga- at that tract, proceed curative on the merits. That Only tion will commence. after court has starkly use of Article 19 is different from the ruled that has been violated nullifying being possibly use advocated Shell in this would Article 19 effect an amend- offending provision, thereby ment of the case.