Lead Opinion
Dersch Energies, Inc. purchases Shell Oil Company products and resells them to retail distributors. In December 1997, Dersch began negotiating with Shell the renewal of their franchise relationship, which was set to expire in the fall of 1998. Throughout the negotiation process, Dersch expressed concerns to Shell about several contract provisions that it deemed objectionable. After ten months of negotiations, Shell (now operating as Equilon Enterprises, L.L.C. due to a merger) informed Dersch that unless it signed the proposed franchise agreement within the next few days, Shell/E quilon would issue a formal notice of nonrenewal of the parties’ franchise relationship. Dersch signed the new franchise agreement “under protest,” and, approximately one year later, filed an action for declaratory relief against Shell and Equilon, seeking a declaration of the corporation’s rights under the agreement pursuant to the Petroleum Marketing Practices Act, 15 U.S.C. §§ 2801-2806. After some procedural wrangling, the parties filed cross-motions for summary judgment. The district court granted the defendants’ motion, and Dersch filed a timely motion to alter or amend the judgment, which the court denied. Dersch appeals the district court’s decisions granting the defendants’ motion for summary judgment and denying its motions for summary judgment and to alter or amend the judgment. We affirm.
I.
Dersch Energies, Inc. (“Dersch”) is a family-owned motor fuel reselling business that has purchased and sold Shell-branded motor fuels for over fifty years. In its role as middleman, Dersch sells Shell-branded motor fuels in portions of southeastern Illinois and southwestern Indiana. On average, Dersch purchases over ten million gallons of Shell-branded motor fuels annu
In 1997, to ensure national uniformity, Shell decided to revise its existing franchise agreements with jobbers and wholesalers.
On February 25, 1998, Ken Zumdome, Shell’s area manager for Dersch’s territory, sent a facsimile message to John Dersch, Dersch’s president, and Thomas Dersch, John Dersch’s son and Dersch’s vice president, advising them that a “[n]ew jobber contract was sent to you before Christmas. You are the only jobber who has not returned [the contract]. Every jobber in the country has this new contract in effect. Please return ASAP.” On March 4, 1998, John Dersch responded by advising Shell, in writing, that the 1982 Contract was not set to expire until December 1998. On May 29, 1998, Shell notified Dersch that “Shell wants all jobbers on their new contract. You are the only jobber not signed. Our legal [department] says you have the right to hold off signing until ... December 31, 1998. If you do not return the contract prior to that, your contract with Shell will terminate.”
On July 15, 1998, representatives from both parties met to discuss the terms and conditions of the proposed Renewal Agreement. During the course of the meeting, Thomas Dersch voiced concerns over the Renewal Agreement’s: (1) indemnification provisions; (2) release of claims provisions; (3) assignment provisions; (4) pricing provision; and (5) description of Dersch’s new defined territory. He also told the Shell representatives that he considered the corresponding security and personal guaranty agreements — that Shell was seeking to require Dersch to execute in conjunction with the Renewal Agreement — to be “onerous.” Two days after the meeting, Dersch received a facsimile from Zum-dome advising that Shell would not require Dersch to execute the new security or personal guaranty agreements, but noting that the Renewal Agreement would now require an addendum reflecting the fact that Shell had joined with Texaco, Inc. (“Texaco”) to form Equilon Enterprises, L.L.C. (“Equilon”) and acknowledging that Equilon would be Dersch’s new supplier-franchisor under the Renewal Agreement.
On or about September 29, 1998, John Dersch received a telephone call from Zumdome, informing him that if Dersch did not sign and forward the Renewal Agreement to Shell/Equilon in the next two to three days, he was under instructions to issue an official notice of nonre-newal of Dersch’s franchise relationship on October 1, 1998, to be effective January 1, 1999.
On September 21, 1999, after operating under the Renewal Agreement for almost one year, Dersch filed an action for declaratory relief, pursuant to 15 U.S.C. § 2805(e) and 28 U.S.C. § 2201, requesting a declaration of its rights under the Renewal Agreement pursuant to the Petroleum Marketing Practices Act (“PMPA”). Specifically, Dersch sought a declaration that Shell and Equilon (collectively “Equi-lon” or the defendants) violated 15 U.S.C. § 2805(f)(1) by conditioning the renewal of the parties’ franchise relationship on Dersch releasing claims and waiving rights that it had under both federal and state law.
In its complaint, Dersch alleged that the defendants, by threatening to discontinue the parties’ franchise relationship, forced it to release or waive six state law rights, three of which are at issue on appeal. First, Dersch claimed that the indemnity provision of the Renewal Agreement, i.e., Article 11.1, required it to waive its right to contribution from joint tortfeasors in violation of 735 ILCS § 5/2-1117(a).
On December 9, 1999, the defendants moved to dismiss Dersch’s complaint, arguing that there was no actual, justiciable controversy that would permit the district court to exercise subject matter jurisdiction, and claiming that the litigation was not ripe because Dersch’s complaint only raised potential, not actual, violations of § 2805(f)(1). As such, the defendants asserted that the district court was being asked to improperly render an advisory opinion. The district court denied the defendants’ motion to dismiss, concluding that Dersch’s complaint alleged an actual controversy because, “a fair reading of the complaint reveals that the controversy involves the question of whether Shell/E qui-lon’s conduct of conditioning the franchise renewal on Dersch’s assent to the waiver of rights provision violated [the PMPA].” In ruling on the defendants’ motion to dismiss, the district court also noted that Dersch’s complaint was “not proceeding on diversity grounds” and that:
To the extent that Dersch is relying on § 2805(f)(1) as an independent source of jurisdiction, Dersch’s reliance is misplaced. Section 2805(f)(1) does not provide an independent basis for relief. Instead, § 2805(a) is the PMPA section that grants a district court jurisdiction ... [and it] extends only to situations where there has been a termination or nonrenewal, actual or constructive.... So to secure relief for a violation of § 2805(f)(1), the franchisee must couch [its] relief in terms of a violation of §§ 2802-03.
Dersch subsequently amended its complaint to address the jurisdictional concerns raised in the district court’s order, alleging that the defendants’ coerced renewal violated both § 2802 and § 2805(f)(1). Thereafter, the parties filed cross-motions for summary judgment. Dersch offered two separate and distinct legal theories in support of its PMPA claim. Dersch’s primary argument was that the state law waivers resulted in a constructive nonrenewal of the parties’ franchise relationship. In the alternative, Dersch contended that even if the waivers did not constitute a constructive nonrenewal of its franchise relationship, it was still authorized to sue the defendants under the PMPA because § 2805(f)(1) provides franchisees with an implied private right of action to enforce the statute’s provisions. The defendants responded by asserting that even if Dersch could meet the
On March 8, 2001, the district court granted the defendants’ motion for summary judgment, and rendered its judgment that same day. In analyzing Dersch’s claim under a constructive nonrenewal theory, the court noted that:
Because this case deals entirely with specific provisions of the [Renewal] Contract, to successfully show a constructive nonrenewal, it appears that Dersch would have to show (1) that the Defendants failed to reinstate, continue, or extend the respective motor and [sic] fuel marketing or distribution obligations and responsibilities of itself and its franchisee under the prior franchise contract adversely affecting the franchisee and (2) that, if the complained-of contract provision is substantially new and not previously agreed-upon, it must adversely affect Dersch’s obligations and responsibilities under the franchise.... If the franchisee can make its showing, there is one additional step. Under certain circumstances, a franchisor may be justified in nonrenewing a franchise relationship. A franchisor may nonrenew the franchise if the franchisor and franchisee fail to agree to additions to the existing franchise agreement, provided the franchisor proposes those additions in good faith, in the normal course of business, and not to prevent the renewal of the relationship.
The district court then evaluated each of the Disputed Provisions using this analytical framework. With respect to the Renewal Agreement’s indemnity and change of delivery provisions, the district court found that: (1) the provisions were substantively the same as the provisions on the same subject matter contained in the 1982 Contract; and (2) even if these provisions were considered new terms, they did not run afoul of the PMPA because “[proposing an already-agreed-upon provision of the existing franchise agreement would fulfill Defendants’ showing of good faith [under § 2802(b)(3)(A)],
The district court also concluded that the defendants’ insistence on Dersch agreeing to the Renewal Agreement’s joint and several liability provision and personal obligations and provisions clause did not constitute a constructive nonrenewal of the parties’ franchise relationship. These contract provisions are contained in Article 21 of the Renewal Agreement and provide as follows:
21. BUSINESS ENTITY OR JOINT BUYER
21.1 General. This article shall apply if Buyer is a business entity or composed of more than one person*854 (i.e., any combination of individuals and business entities).
21.2 Joint and Several Liability. If Buyer is composed of more than one person, the obligations imposed hereunder shall be joint and several as to each such person, and all such obligations shall be deemed to apply to each person with the same effect as though that person were the sole Buyer.
21.3 Personal Obligations and Provisions. If Buyer is a business entity, all obligations and provisions hereof of a personal nature shall apply as if such business entity were an individual, and shall also apply insofar as is legally possible and reasonably practicable to those individual persons who have or exercise management responsibility for such business entity, including without limitation, officers, directors or agents of corporations and partners of partnerships. The business entity shall manage its affairs with respect to the personal obligations and provisions in a manner so as to give full force and effect to same.
R61,19.
Dersch argued that Articles 21.2 and 21.3violated § 2805(f)(1), thus constituting a constructive nonrenewal of its franchise relationship, because the provisions could be used by the defendants to impose personal liability on John Dersch and other managers, officers, and directors of the corporation. The district court rejected this argument, however, concluding that neither provision could serve as a basis for Dersch’s constructive nonrenewal theory because: (1) Article 21.2 only applied if the “Buyer” was comprised of more than “one person,” and the only “Buyer” to the Renewal Agreement was Dersch, a corporation; and (2) by its very terms (i.e., “insofar as is legally possible”), Article 21.3 was rendered inapplicable if any purported waiver contained in that provision violated § 2805(f)(1).
The district court also rejected Dersch’s argument that § 2805(f)(1) provided it with an implied private right of action to enforce the statute’s provisions, noting “[t]his Court previously concluded that § 2805(f)(1) only creates duties under the PMPA and is not an independent source of jurisdiction.... There [is] no indication that Congress intended to create an implied federal cause of action in enacting § 2805(f).” The court then held that “if § 2805(f)(1) does not create an implied cause of action ... Dersch [can] only maintain a cause of action under the general PMPA provision conferring federal question jurisdiction onto federal courts.”
Dersch filed a timely motion to alter or amend the district court’s judgment, pursuant to Fed.R.Civ.P. 59(e), which the court denied. Dersch appeals the district court’s decisions granting the defendants’ motion for summary judgment, and denying its motions for summary judgment and to alter or amend the judgment.
II.
This court reviews the district court’s grant of summary judgment de novo, construing all facts in favor of Dersch, the nonmoving party. Commercial Underwriters Ins. Co. v. Aires Envtl. Services, Ltd.,
On appeal, Dersch argues that the district court erred in granting the defendants’ motion for summary judgment because the analysis used by the court failed to give any consideration whatsoever to the substantive requirements of 15 U.S.C. § 2805(f)(1),
No franchisor shall require, as a condition of entering into or renewing the franchise relationship, a franchisee to release or waive-(A) any right that the franchisee has under this subchapter or other Federal law; or (B) any right that the franchisee may have under any valid and applicable State law.
Id.
According to Dersch, the district court’s analysis of § 2805(f)(1) was premised on “a misunderstanding of the basic procedural preconditions” for interpreting the Petroleum Marketing Practices Act (“PMPA” or “Act”), 15 U.S.C. § 2801-2806. Dersch contends that the district court erred in ruling that § 2805(f)(1) does not provide an implied private right of action to enforce the statute’s provisions. Furthermore, Dersch asserts that even if § 2805(f)(1) does not contain an implied private right of action, it is still entitled to maintain a claim under the PMPA because the Disputed Provisions of the Renewal Agreement, imposed upon Dersch by the defendants, amount to a constructive non-renewal of the parties’ franchise relationship. Thus, at the very heart of this case is the role § 2805(f)(1) plays within the rubric of the PMPA. The issues before us — i.e., whether § 2805(f)(1) contains an implied private right of action or may serve as the basis of a constructive nonre-newal claim under the PMPA — are issues of first impression for our circuit. We review questions of statutory construction de novo. Miller Aviation v. Milwaukee County Bd. of Supervisors,
A. The Petroleum Marketing Practices Act — 15 U.S.C. §§ 2801-2806
Before addressing the merits of Dersch’s arguments, it is necessary to give a brief overview of the scope and structure of the PMPA. The PMPA governs franchise arrangements for the sale, consignment, or distribution of motor fuel “in commerce,” and protects franchisees from arbitrary or discriminatory termination or nonrenewal of their motor fuel franchises. Beachler v. Amoco Oil Co.,
If a franchisor terminates a franchise or fails to renew a franchise relationship in accordance with the PMPA, the franchisee may maintain a civil action under 15 U.S.C. § 2805(a) and/or (b). Lippo v. Mobil Oil Corp.,
B. Dersch’s 15 U.S.C. § 2805(f)(1) claim
Dersch’s first argument on appeal is that § 2805(f)(1) provides franchisees with an implied private right of action to enforce the statute’s provisions. Dersch claims that this is so because “there is no suggestion in the language or legislative history of Section 2805(f)(1)” that a franchisee must demonstrate the nonrenewal of its franchise relationship, pursuant to § 2805(c), before maintaining a suit under the PMPA for a franchisor’s violation of the statute. While the plain meaning of § 2805(f)(l)’s text is clearly important, this statutory subsection must still be construed in its proper context. Smith v. Zachary,
Section 2805(f)(1) is contained in the PMPA’s “enforcement provisions” along with 15 U.S.C. § 2805(a), which is entitled “maintenance of civil action by franchisee
Like the district court, we believe that the existence of an explicit cause of action in § 2805(a) and (b) — i.e., one based on a franchisor’s violation of §§ 2802 or 2803 — makes it highly unlikely that Congress absentmindedly forgot to provide a cause of action for § 2805(f)(1). See Dersch Energies, Inc. v. Shell Oil Co.,
A private right of action to enforce federal law must be created by Congress ... [I]n evaluating whether a statute contains a private right of action ... [t]he judicial task is to interpret the statute Congress has passed to determine whether it displays an intent to create not just a private right but also a private remedy. Statutory intent on this latter point is determinative. Without it, a cause of action does not exist and courts may not create one, no matter how desirable that might be as a policy matter, or how compatible with the statute. “Raising up causes of action where a statute has not created them-may be a proper function for common-law courts but not for federal tribunals.”
Id. at 729-30 (quoting Alexander v. Sandoval,
Because “statutory intent” is “determinative” on the question of whether Congress intended to create a private remedy, Miller,
C. Dersch’s “Constructive” Nonre-newal Claim
This leads us to Dersch’s next claim, that the defendants’ violation of § 2805(f)(1) constitutes a “constructive” nonrenewal of its franchise relationship under § 2802. Dersch appears to argue that if a franchisor conditions the renewal of a franchise relationship on the franchisee releasing or waiving rights that it has under federal or state law, there has been no renewal of that relationship within the meaning of the PMPA.
The district court rejected this argument, holding that the parties’ franchise relationship had been renewed because the Renewal Agreement was, in substance, identical to the parties’ prior franchise agreement. The court also held that even if the Disputed Provisions could be characterized as changes or additions to the parties’ franchise, i.e., new contract terms, Dersch would still not be able to prevail on its claim because “[proposing an already-agreed-upon provision of the existing franchise agreement would fulfill Defendants’ showing of good faith [under § 2802(b)(3)(A) ], and there is no contrary evidence.”
On appeal, Dersch takes issue with both of these conclusions. First, Dersch argues that while “it might seem logical to infer that an offer to renew existing contract terms would not amount to a constructive nonrenewal, such an inference cannot be made when Section 2805(f)(1) is involved.” According to Dersch, a franchisor can violate § 2805(f)(1) even if it offers a franchisee an agreement identical to the one set to expire because § 2805(fj(l)’s release and waiver prohibition specifically applies when the parties are “renewing the franchise relationship.” § 2805(f)(1) (emphasis added). As such, Dersch contends that it would render § 2805(f)(1) meaningless if a franchisor could avoid the statute’s release and waiver prohibition by simply offering to renew a franchise relationship on terms and conditions identical to those contained in the parties’ prior franchise agreement. Second, Dersch contends that to the extent the district court assumed a nonrenewal of the parties’ franchise relationship and treated the Disputed Provisions as “new” terms, it erred in holding that the defendants were entitled to use § 2802(b)(3)(A) — which permits franchisors to nonrenew a franchise relationship if the franchisee refuses to agree to changes or additions made in good faith and in the normal course of business — to circumvent § 2805(f)(l)’s release and waiver prohibition. In short, Dersch asserts that the district court’s test for analyzing its constructive nonrenewal claim: (1) “kept it from giving any consideration whatsoever to the substantive requirements of Section 2805(f)(1),” and (2) permits “franchisors to continue to insist upon the waiver or release of rights, if they have historically done so.” This approach, Dersch argues, ends up grandfathering a problem that
We agree with Dersch’s argument in some respects. There is no question that § 2805(f)(1) was enacted to provide franchisees with a certain amount of protection during the negotiation process of “entering into or renewing the franchise relationship.” Furthermore, like Dersch, we think that the meaning of § 2805(f)(l)’s text is clear; a franchisor may not condition the renewal of a franchise relationship on a franchisee releasing or waiving rights under federal or state law. As such, a franchisor cannot circumvent § 2805(f)(l)’s release and waiver prohibition by offering to renew the parties’ franchise relationship on terms and conditions identical to those contained in a prior franchise agreement, whether the prior agreement was entered into before or after the enactment of the statute. Nor is a franchisor permitted to use § 2802(b)(3)(A) to do an end run around § 2805(f)(l)’s release and waiver prohibition. However, while we agree with Dersch’s interpretation of § 2805(f)(l)’s meaning, this only calls into question the reasoning of the district court’s decision, not its ultimate conclusion-that the defendants’ alleged violation of § 2805(f)(1) did not result in a constructive nonrenewal of the parties’ franchise relationship. For the reasons that follow, we conclude that the district comb’s decision must stand because Dersch’s franchise relationship with the defendants was renewed within the meaning of the PMPA. See, e.g., Peele v. Country Mut. Ins. Co.,
As previously discussed, the PMPA was enacted to address one narrow, yet crucial, aspect of petroleum franchise relationships-the termination of franchises and the nonrenewal of franchise relationships. Most of the time, it is obvious when a termination or nonrenewal has taken place. There are, however, situations where a franchisor’s actions will indirectly result in the termination of a franchise or the non-renewal of a franchise relationship — i.e., an informal termination or nonrenewal. We recognized this possibility in Beachler,
Dersch, however, makes no attempt to argue that the “coerced” release or waiver of the aforementioned state law “rights” compromised or diminished, in any manner whatsoever, its ability to lease retail premises or sell branded motor fuel.
The composition of a petroleum franchise is delineated with precision in the Act’s definitions for “franchise” and “franchise relationship.” The PMPA defines the term “franchise relationship” as “the respective motor fuel marketing or distribution obligations and responsibilities of a franchisor and a franchisee which result from the marketing of motor fuel under a franchise. ” 15 U.S.C. § 2801(2) (emphasis added). The term “franchise” means any contract between a franchisor, as defined by 15 U.S.C. § 2801(3), and a franchisee, as defined by 15 U.S.C. § 2801(4), under which the franchisor authorizes or permits the franchisee “to use, in connection with the sale, consignment, or distribution of motor fuel, a trademark which is owned or controlled by such [franchisor] ... which authorizes or permits such use.” 15 U.S.C. § 2801(1)(A). A “franchise” covers the essential contracts between a franchisor and a franchisee— i.e., contract to use the supplier’s trademark in connection with retail sales, contract for supply of fuel to be sold under the trademark, and a lease of premises for the sale of fuel. 15 U.S.C. § 2801(1). A “franchise relationship” then is “an entity separate from, but defined by, the ‘franchise,’ or contractual arrangement existing between the parties.” Unocal Corp. v. Kaabipour,
The central problem with Dersch’s argument, and indeed with the district court’s reasoning below, is that it presumes a franchisee can only enforce § 2805(f)(l)’s release and waiver prohibition in the context of a PMPA claim. While it is certainly possible for a § 2805(f)(1) violation to result in the non-renewal of a franchise relationship, that will not always be the case. When a franchisor’s violation of § 2805(f)(1) does not result in a nonrenewal of the parties’ franchise relationship, a franchisee must resort to remedies outside of the PMPA to vindicate its rights under the statute. We reach this conclusion for several reasons. To begin with, as we have repeatedly emphasized, the PMPA is only designed to regulate a narrow aspect of petroleum franchise relationships — the termination of franchises and the nonrenewal of franchise relationships. See generally §§ 2801-2806. While it is true that § 2805(f)(1) was enacted to address the disparity of bargaining power existing between franchisors and franchise outside the termination/non-renewal context, i.e., during the
To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty applicable to any violation thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of notification with respect thereto) of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of. this subchapter.
15 U.S.C. § 2806(a)(1) (emphasis added).
By specifying with such precision when the States must stand aside in favor of federal regulation, Congress implicitly marked the outer bounds of the power it intended to exercise.
It is also important to keep in mind that the regulation of petroleum franchise relationships has traditionally been a matter of local concern in which the parties frame their relationships with reference to State law. Hanes v. Mid-America Petroleum, Inc.,
We, therefore, conclude that if a franchisor impermissibly conditions the renewal of a petroleum franchise relationship on the relinquishment of any right that a franchisee has under federal or state law, and the coerced relinquishment of that right does not result in a nonrenewal of the parties’ franchise relationship, the franchisee must resort to remedies outside of the PMPA context to enforce § 2805(f)(l)’s release and waiver prohibition — primarily, if not exclusively, through state law remedies. Section 2805(f)(l)’s release and waiver prohibition then, in this case, provides Dersch with a claim under state law to challenge the validity of the Disputed Provisions. This is certainly not unusual given the structure of our federalist system of government. As we noted in Spearman v. Exxon Coal USA Inc.,
In reaching this determination, we are by no means suggesting that § 2805(f)(1) only operates at the state level. On the contrary, if a franchisor impermissibly conditions the renewal of a franchise relationship on the franchisee releasing or waiving federal or state law rights, and the franchisee’s refusal to agree to this conditional renewal results in the nonrenewal of that relationship, the franchisor’s violation of § 2805(f)(1) may be examined in conjunction with the franchisee’s claim for the nonrenewal of its franchise relationship. See, e.g., Carter v. Exxon Co. U.S.A., a Div. of Exxon Corp.,
Moreover, the PMPA requires franchisors to provide franchisees with a formal notice of termination or nonrenewal, which, in most cases, must be given 90 days in advance. 15 U.S.C. § 2804. During this 90-day period, a franchisee may, and often does, seek injunctive relief to prevent the franchisor from terminating its franchise or nonrenewing its franchise relationship under the lenient standard provided by the Act in 15 U.S.C. § 2805(b)(2).
Thus, Dersch’s assertion that it was forced to execute the Renewal Agreement rings hollow. As one court recently noted, “[bjecause a franchisor cannot terminate without providing the requisite notice, threats of termination unaccompanied by explicit notice pursuant to § 2804 have no teeth.” Shell Oil Co.,
[A] franchisee [need not] go out of business in order to obtain relief from improper nonrenewal. A franchisee presented with a renewal agreement so coercive that it suggests that the franchisor’s ulterior motive is to prevent renewal can refuse the agreement. If the franchisor is unwilling to renew, it must notify the franchisee of nonrenewal ninety days before the nonrenewal is to take effect. 15 U.S.C. § 2804(a). During this ninety-day interim, the franchisee may seek a preliminary injunction to prevent enforcement of the nonrenewal. Under the protection of an injunction, the franchisee can continue operating its business on the terms of the previous agreement while the merits of its action against the franchisor are resolved. The availability of injunctive relief ensures that a franchisee need not go out of business before seeking relief from improper nonrenewal.
Jet, Inc. v. Shell Oil Co.,
The dissent claims that in'making this point we have contradicted the crux of our holding — i.e., that a franchisee cannot maintain a claim for a § 2805(f)(1) violation unless it results in the nonrenewal of the franchise relationship — because:
*864 In effect, the majority is saying that, in a § 2805(f)(1) case like the one before us, the statutory notice of nonrenewal is the precise equivalent of nonrenewal itself and may be treated as nonrenewal for purposes of maintaining suit. This position, of course, recognizes the validity of constructive nonrenewal, a concept that the majority opinion has otherwise attempted thoroughly to demolish.
Dissent at 869.
In one respect, the dissent is correct: a franchisor’s issuance of a notice of nonrenewal is the precise equivalent of a nonrenewal. Lippo,
According to the dissent, “[e]onstructive nonrenewal merely means treating something which is literally or in fact not nonrenewal as actual nonrenewal for purposes of litigation.” Dissent at 869. This definition of constructive nonrenewal, however, cannot be reconciled with this court’s holding in Beachler or § 2805(c)’s requirement that franchisee must, as a threshold matter, demonstrate the nonre-newal of its franchise relationship. Furthermore, contrary to the dissent’s repeated assertions, we do not reject the constructive nonrenewal approach accepted by the vast majority of our sister circuits. Our opinion specifically recognizes that a franchisee may bring a cause of action under the PMPA when a franchisor’s actions result in the loss of one of the three statutory components comprising a “franchise” under the Act — i.e., lease of retail premises, motor fuel supply contract, or the contract to use the franchisor’s trademark. In such cases, this circuit and several of our sister circuits have held that a franchisee may maintain an action under § 2802 for the nonrenewal of its franchise relationship; an action which is commonly referred to as a claim for “constructive nonrenewal.”
What we do reject is the constructive nonrenewal theory advanced by the dissent, which, to our knowledge, has only been endorsed by the Ninth Circuit. See Pro Sales, Inc. v. Texaco, U.S.A.,
Even more problematic, however, is the fact that the Pro Sales court completely disregards the statutory protection afforded to franchisees who receive a formal notice of termination or nonrenewal under the PMPA. As previously noted, once a franchisor issues a formal notice of nonre-newal, a franchisee may immediately seek injunctive relief under § 2805(b)(2). The Pro Sales court, however, ignored a franchisee’s ability to obtain an injunction under the PMPA, and relied exclusively on the legislative history of the Act in support of its holding.
Moreover, given the lenient standard for obtaining injunctive relief under the PMPA, we do not accept the Ninth Circuit’s assertion in Pro Sales — echoed by the dissent in this case — that franchisees would be forced to go out of business before invoking the protections of the Act unless they are permitted to sign renewal agreements under protest.
Here, Dersch’s actions dictated its fate. Had Dersch allowed the defendants to issue a formal notice of non-renewal, its dispute with the defendants would have been transformed from a mere contract dispute into a non-renewal (within 90 days) of its franchise relationship — thus allowing it to meet its burden under § 2805(c) and maintain suit against the defendants via § 2805(a)-(b). However, by signing the renewal agreement, and thus renewing its statutory “franchise,” Dersch divested itself of the right to bring an action under the PMPA.
In this case, Dersch chose to renew its franchise relationship with the defendants — thus reaping the benefits of renewal (i.e., the continued supply of branded gasoline) — but objected to contract provisions that it deemed to be violative of § 2805(f)(1). While the Disputed Provisions may indeed violate § 2805(f)(1), they clearly have no impact on Derseh’s statutory “franchise.” As such, Dersch is precluded from using the remedial provisions of the PMPA to sue the defendants for a “constructive nonrenewal” of its franchise relationship when all of the essential statutory components of its PMPA franchise
III.
Section 2805(f)(1) does not provide franchisees with an implied private right of action for a franchisor’s violation of its provisions. Furthermore, the defendants’ alleged violation of § 2805(f)(1) does not constitute a nonrenewal of the parties’ franchise relationship within the meaning of the PMPA. We, therefore, Affirm the district court’s judgment granting the defendants summary judgment of Dersch’s PMPA claim and denying Dersch’s motion for summary judgment, as well as the court’s order denying Dersch’s motion to alter or amend its judgment, for the reasons stated in this opinion.
Notes
. According to the defendants, "uniform contracts are important to put all jobbers in a similar position so as to prevent jobbers from gaining an unfair advantage over other jobbers which could result if the terms and conditions of each individual contract were separately negotiated.” The defendants also believe that "the presence of different terms between various jobbers/wholesalers might subject [them] to claims of selective application and discriminatory practices.”
. As part of a joint venture agreement between Shell and Texaco, certain assets of the companies were transferred to Equilon, effective July 1, 1998, including Dersch's franchise
. This was presumably to comport with the ninety-day notice requirement under the 1982 Contract and 15 U.S.C. § 2804's general rule that ninety days notice be given before a franchisor terminates a franchise or nonrenews a franchise relationship. See, e.g., Brach v. Amoco Oil Co.,
. 735 ILCS § 5/2-1117(a) provides that “a defendant is severally liable only and is liable only for that proportion of recoverable economic and non-economic damages, if any, that the amount of that defendant's fault, if any, bears to the aggregate amount of fault of all other tortfeasors....''
. Ind.Code § 23-2-2.7-1(3) provides that “[i]t is unlawful for any franchise agreement entered into between any franchisor and a franchisee who is either a resident of Indiana or a nonresident who will be operating a franchise in Indiana to contain [a provision] ... [allowing substantial modification of the franchise agreement by the franchisor without the consent in writing of the franchisee.”
. A franchisor may nonrenew a franchise relationship if a franchisee refuses "to agree to changes in the franchise arrangement that result from 'determinations made by the franchisor in good faith and in the normal course of business.' ” Duff v. Marathon Petroleum Co.,
. Congress enacted § 2805(f)(1) as part of the “Petroleum Marketing Practices Act Amendments of 1994,” Pub.L. No. 103-371, 108 Stat. 3484.
. We pause to note "that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the courts' statutory or constitutional power to adjudicate the case.” Steel Co. v. Citizens for a Better Env’t,
. The PMPA gives franchisees the right to seek a preliminary injunction prior to the expiration of the franchise agreement. See 15 U.S.C. § 2805(b)(2)(A)-(B).
. Section 2803 applies to trial and interim franchises, and therefore is not at issue in this case.
. For identical reasons, we reject Dersch's argument that 28 U.S.C. § 1331 provides it with an independent jurisdictional basis to maintain an action against the defendants under the PMPA.
. The district court also held, with respect to Articles 21.2 and 21.3, that these contract provisions did not require Dersch to waive any rights that it had under state law. Because we conclude infra that Dersch cannot succeed on its constructive nonrenewal claim, even if these contract provisions required it to waive certain state law rights, we need not address this aspect of the district court's holding. For this same reason, we decline to address the parties' detailed arguments on whether each of the Disputed Provisions required Dersch to release or waive state law rights in violation of § 2805(f)(1)(B).
. In fact, Dersch has continued to sell Shell-branded motor fuel throughout the course of this litigation pursuant to the terms of the Renewal Agreement.
. See also 15 U.S.C. § 2805(f)(2), which provides that the "interpretation or enforcement” of the "franchise” shall be governed by the law of the State "in which the franchisee has [its] principal place of business ...." (emphasis added).
. This is an application of the familiar canon of statutory construction expressio unius est exclusio alterius, which provides that “to express or include the one thing implies the exclusion of the other....” Black’s Law Dictionary 602 (7th ed.1999). See also Freightliner Corp. v. Myrick,
. Section 2805(b)(2) provides that a district is required to issue a preliminary injunction if:
(A) the franchisee shows-
(i) the franchise of which he is a party has been terminated or the franchise relationship of which he is a party has not been renewed, and
(ii) there exist sufficiently serious questions going to the merits to make such questions a fair ground for litigation; and
*863 (B) the court determines that, on balance, the hardships imposed upon the franchisor by the issuance of such preliminary injunc-tive relief will be less than the hardship which would be imposed upon such franchisee if such preliminary injunctive relief were not granted.
Thus, once the franchisee establishes a termination or nonrenewal, it need only prove “a reasonable chance of success on the merits” of its claim of a PMPA violation and that the balance of hardships tips in its favor. Beachler,
. The "constructive” label, however, can be confusing. This characterization does not mean that a franchisee can maintain a PMPA claim based on franchise policy disagreements. In the context of the PMPA, constructive means "not directly expressed, but inferred,” The Compact Oxford English Dictionary 322 (2d ed.1989), i.e., an indirect or informal termination or nonrenewal. See Beachler,
. Indeed, one of the arguments made by the franchisee in Pro Sales was that “its continuation of the franchise relationship only under the terms of the TRO, and not under the terms of either successor contract ... bears on whether its actions constitute^] [a] nonre-newal.” Pro Sales,
. In Pro Sales, the court seems to endorse the concept that a franchisee may forego the requirements of § 2805(b)(2) and simply issue itself a de facto injunction by signing an agreement under protest because the franchisee’s ability to continue in business under the terms of an "illegal” contract is within its control,
. As previously noted, a formal notice of nonrenewal is not necessarily a prerequisite to filing suit under the PMPA. The significance of the notice is that it formally expresses the franchisor's intent to discontinue the parties’ franchise relationship (within 90 days), and therefore constitutes a "nonrenewal” for purposes of § 2805(c). Thus, if the actions of a franchisor indirectly result in a termination or nonrenewal (e.g., an assignment of the franchise), and no notice is issued in conjunction with that action, the franchisee is clearly not precluded from filing suit under the PMPA, even in the absence of such notice. Beachler,
Dissenting Opinion
dissenting.
I.
The question that remains after studying the opinion of the district court and that of the majority (which affirms the district court by applying a different analysis) is obvious: what possible purpose could Congress have had in amending the PMPA in 1994 to add § 2805(f)(1)? Although the district court set out to provide some sort of substance for this admittedly remedial piece of federal legislation, its efforts were, in the end, about as fruitless as those of the majority, which virtually writes § 2805(f)(1) out of the United States Code. The majority can only speculate that the section was intended to give some unspecified heft to some unspecified state remedy — thereby completely departing from the broader aim of remedying gross disparities in franchisor-franchisee bargaining power and providing regulatory uniformity on a national basis. See Beachler v. Amoco Oil Co.,
A.
The district court attempted to avoid such a harsh result by tentatively allowing recovery on a theory of constructive nonre-newal. Such a theory has been clearly recognized in some circuits, see, e.g., Pro Sales, Inc. v. Texaco, USA
The majority opinion, even though it rejects the constructive nonrenewal approach, disapproves of the analysis applied by the district court in draining § 2805(f)(1) of substance after that court has applied a constructive nonrenewal theory. The majority “agree[s] with Dersch’s arguments in some respects” that the district court’s application of the constructive nonrenewal theory “‘kept it from giving any consideration whatsoever to the substantive requirements of Section 2805(f)(1)’” and “permits ‘franchisors to continue to insist upon the waiver or release of rights, if they have historically done so.’ ” Maj. Op. at 858-59 (quoting Appellant’s Br. at 14, 20, 21). In other words, the district court erred in holding that only new provisions of a franchise agreement could invoke the prohibition of § 2805(f)(1). The majority goes on to say:
[W]e think that the meaning of § 2805(f)(l)’s text is clear; a franchisor may not condition the renewal of a franchise relationship on a franchisee releasing or waiving rights under federal or state law. As such, a franchisor cannot circumvent § 2805(f)(l)’s release and waiver prohibition by offering to renew the parties’ franchise relationship on terms and conditions identical to those contained in a prior franchise agreement, whether the prior agreement was entered into before or after enactment of the statute. Nor is a franchisor permitted to use § 2802(b)(3)(A) [the good faith proviso] to do an end run around § 2805(f)(l)’s release and waiver prohibition.
Maj. Op. at 869.
I could not agree more fully with these observations of the majority that reject the district court’s application of § 2805(f)(l)’s prohibition only to new contract terms and that court’s invocation of the good faith justification of § 2802(b)(3)(A) to validate the Disputed Provisions that have been contained in past agreements. As a matter of law, terms that violate § 2805(f)(1) cannot qualify as good faith proposals. How can one in good faith insist on the inclusion in the agreement of terms forbidden by statute? See, e.g., Coast Village, Inc. v. Equilon Enterprises, LLC,
To confine the prohibition of § 2805(f)(1) to new terms, or only to changes in terms, is a construction that simply finds no support in the text of § 2805(f)(1). See Maj. Op. at 862. And to rely on § 2802(b)(3)(A), which permits franchisors to nonrenew a franchise agreement relationship if the franchisee refuses to agree to changes and additions made in good faith in the normal course of business, is to indulge the contradiction that unlawful terms can somehow be offered in good faith and in the normal course of business. See Coast Village, Inc.,
Therefore, while I agree with the district court in following Pro Sales, Inc., supra, to find a basis for this lawsuit through a constructive nonrenewal analysis, I cannot agree that that approach can be thwarted, as it was by the district court, by restricting it only to new terms or to changes in terms, or by employing the good faith proviso to trump § 2805(f)(1). I would pursue, as a preferred option, a
B.
The points which the majority attempted to make in its first response
The majority, also in its first response to my dissent, points to provisions for a notice of nonrenewal and for associated preliminary injunctive relief as affording an escape from the “Catch-22” which I have outlined. 15 U.S.C. § 2805(b)(2). In effect, the majority is saying that, in a § 2805(f)(1) case like the one before us, the statutory notice of nonrenewal is the precise equivalent of nonrenewal itself and may be treated as nonrenewal for purposes of maintaining suit. This position, of course, recognizes the validity of constructive nonrenewal, a concept that the majority opinion has otherwise attempted thoroughly to demolish. Constructive nonrenewal merely means treating something which is literally or in fact not non-renewal as actual nonrenewal for purposes of litigation. A substantial part of the majority opinion is dedicated to showing the error of constructive nonrenewal,
Additionally, the only case from this circuit, Beachler, cited to support the majority’s contention that Dersch should have refused to sign the renewal agreement and filed suit upon receiving statutory notice of nonrenewal does not stand for the proposition that PMPA relief requires such formal notice under § 2804. Beachler,
The majority’s observations about Pro Sales and its relation to Dersch’s claim are equally wide of the mark. First, the majority faults Dersch for failing to “promptly seek to invoke its rights under the PMPA.” “Promptly” in the case of Pro Sales, by the majority’s reckoning, apparently meant in a matter of days or weeks, not a year as in Dersch’s case. However, I think this Pro Sales requirement relates significantly to the kind of relief being sought. In Pro Sales the franchisee apparently asked for injunctive relief. Dersch requests only declaratory relief (which I suppose might translate into reformation of- the franchise agreement) and there is no particular need for a speedy resolution
The majority also faults the Pro Sales court for ignoring the PMPA provisions for receipt of the formal notice of termination and immediate recourse to preliminary injunctive relief. I fail to see the relevance of this point. The fundamental analysis of the basic merits of rights under the PMPA by the Ninth Circuit is quite different from the analysis by the majority here. Whether the Pro Sales court thought the PMPA provisions for notice and preliminary relief were important, let alone critical, does not seem to me significant in the context of its basic approach. After all, preliminary, status-quo-maintain-ing procedures are purely ancillary to statutory rights. They may afford a more orderly mode for enforcing rights, but they are hardly central to the analysis. Nor does § 2805(b)(2) significantly alter the balance of bargaining power as between franchisor and franchisee.
II.
A.
As an alternative approach, I believe that an independent basis for plaintiffs suit might be found even without recourse to the theory of constructive nonrenewal (although an independent basis is not necessary to the result here). Both the majority and the district court here rejected the possibility of a private right of action for franchisees injured by breaches of § 2805(f)(1). Both the district court and the majority relied heavily on Alexander v. Sandoval,
The cases upon which the majority relies forbid the distortion of statutory language to create remedies where none were intended. These cases are distinguishable from the present case, where Congress’s clear intent was to empower private actors, the franchisees, with a cause of action. While the original statute
B.
Once it is determined that Dersch has the ability, as a threshold matter, to maintain an action under the PMPA, via one or the other statutory alternative, one must next decide whether, on the merits, the Disputed Provisions here violate § 2805(f)(1) and actually require the waiver of a right existing under state law as a condition of the franchise renewal. As the majority makes clear, the franchise renewal here was offered on a take-it-or-leave-it basis. Therefore, if the Disputed Provisions required Dersch to waive a state law right, § 2805(f)(1) was violated.
The first Disputed Provision is Article 5, which allows the defendant to make alterations in the conditions and locations of fuel deliveries. Dersch alleges that Indiana law gives it the right to a franchise agreement that does not contain provisions allowing the substantial modification of the agreement without the written consent of Dersch.
Dersch also argues that Disputed Provision Article 11, in which Dersch agrees to indemnify Shell even for actions in which Shell was contributorily negligent, violates Illinois law establishing the right to several liability for defendants whose fault is found to be less than 25% of the total fault, and establishing Dersch’s right to contribution from joint tortfeasors. See 735 ILCS § 5/2-1117; 740 ILCS § 100/2. Dersch’s argument appears to have merit. Section 2-1117 would assign liability to Dersch, in admittedly limited circumstances, only to the extent of actual pro rata fault. Additionally, the invoked right to contribution under 740 ILCS § 100/2 (that was, for unknown reasons, not expressly listed by statutory section) gives Dersch the right under Illinois law to escape liability for Shell’s tortious conduct. Article 11 requires Dersch to waive this right, and appears, therefore, to violate § 2805(f)(1). However, on remand, I would allow Shell to show any circumstances that might undermine Dersch’s argument on this point. The issue has not been addressed on the merits by either the district court or the majority.
On a broader front, Shell asserts that the savings clause of Article 19 eliminates any alleged violation of law supporting Dersch’s action. Article 19 of the Agreement states:
To the extent that any provision of this Contract is in conflict with any valid and enforceable law existing on the effective date thereof, that provision shall be deemed amended to conform with such law as it applies to this Contract at the time either party takes any action or exercises or claims any rights under such provision.
This provision, which presents the most difficult issue in the case, may well have been designed by Shell to avoid the sort of confrontation with franchisees with which we are struggling. If so, the effort almost succeeds, but in the end seems to deal more with appearances than with reality. Shell can argue, in accordance with the language of Article 19, that the Disputed Provisions are only enforceable to the extent permitted by law. Hence, none of the Disputed Provisions can violate § 2805(f)(1) because they would at some point be amended by Article 19 to conform to the PMPA’s strictures. This has a good ring to it, but there may be serious questions of timing. While the savings clause may operate at some future date to amend the invalid provisions, it does so after the violation of § 2805(f)(1) giving rise to the claim has occurred.
The plain language of § 2805(f)(1) forbids the waiving of state law rights as a condition of entering into a franchise agreement. Therefore, the § 2805(f)(1) violation occurs with the franchisor’s threat of nonrenewal by a take-it-or-leave-it contract containing a term that waives a franchisee’s state or federal legal rights. Accord Pro Sales, Inc.,
Would a lawyer advise her franchisee-client to submit to terms abrogating the client’s state law rights in the hope that the contract would somehow be amended to conform to state law in the future? This seems to me to be the practical context in which to view the problem.
III.
I would, therefore, reverse and remand to the district court for further proceedings, and I respectfully Dissent.
. The reader, seeing the majority opinion and dissent simultaneously as parts of a single text, may find the interplay of the various arguments and counter-arguments both muddled and contradictory, since they have been composed progressively, one after another, and are found in layers like the sedimentary strata of the fossil record. I have tried to provide some sense of where in the temporal evolution of this dissent particular comments belong, but I recognize the extreme difficulty of keeping things in coherent order.
. Thus, the majority states, "When a franchisor’s violation of § 2805(f)(1) does not result in a nonrenewal of the parties' franchise relationship, a franchisee must resort to remedies outside of the PMPA to vindicate its rights under the statute." Maj. Op. at 860.
.Now, I look at what I hope (as I compose this chronologically-last footnote) is the final version of the majority and dissenting opinions. I see that in the course of numerous passages back and forth of drafts of these opinions between the majority and me (and the revisions consequent to these passages) the majority opinion seems to have evolved from emphatic disapproval of a theory of con
This is a procedural possibility not mentioned by either of the parties or by the district court nor, as far as I am aware, by anyone else in connection with the enforcement of rights under § 2805(f)(1). I am not prepared to say that constructive nonrenewal as outlined by the majority does not exist, but the majority's route is certainly not expressly provided in the words of the statute. There is nothing to indicate a preference by Congress for the solution proposed by the majority to the path outlined in Pro Sales and open to Dersch here.
However, the important thing to me is not the procedural formalities (not) observed by Dersch, but rather the possibility of maintaining suit without suffering a loss of fuel supply. My position here is that Dersch should not be deprived of this opportunity in the case before us, whether or not there was some other procedure that might have provided a similar opportunity. As I have noted, the procedure proposed by the majority is far from clear from the text of the statute and seems to me in no way superior to the Pro Sales approach.
Nonetheless, I am pleased that this dissent has apparently resulted in the concession that constructive nonrenewal is alive and well— albeit in a slightly different form than that pursued by Dersch and Pro Sales. How these developments will be viewed by the franchisor community remains to be seen. In the responses of the majority to this dissent, franchisors may have won the battle but lost the war.
. See Maj. Op. at 856 (“In order to prevail, the franchisee must prove, as a threshold matter, a ... nonrenewal of its franchise.”); Maj. Op. at 862 ("We, therefore, conclude that if a ... coerced relinquishment of [a federal or state] right does not result in a nonrenewal of the parties' franchise relationship, the franchisee must resort to remedies outside the PMPA context to enforce § 2805(f)(l)’s release and waiver prohibition.”); Maj. Op. at 862 ("[I]f a franchisor impermissibly conditions the renewal of a franchise relationship on the franchisee releasing or waiving federal or state law rights, and the franchisee’s refusal to agree to this conditional renewal results in the nonrenewal of that relationship, the franchisor's violation of § 2805(f)(1) may be examined in conjunction with the franchisee's claim for the nonrenewal of its franchise relationship.”).
.The majority's responses to my dissent appear to recognize subliminally that it is on perilous ground with its newly conceived acknowledgment that actual nonrenewal is not a precondition to PMPA relief. Because the statute does not expressly require statutory notice as a precondition to the preliminary relief cited by the majority (it merely requires the still indeterminate concept of "nonrenewal” contained in § 2805(b)(2)(A)(i)), the natural next question is why must we adopt the majority’s requirement of formal statutory notice? The majority answers that question by citing to the district court of the Southern District of Texas for its proposition that the absolute earliest moment at which PMPA relief is available is at the time formal statutory notice is given under § 2804(a). Shell v. Shell Oil Co.,
. Subsequent revisions of the majority opinion appear to indicate that it might, perhaps, agree with the statement in the text when it lowers its requirement for a nonrenewal suit to simply a "formalf] expression]” of an intent to nonrenew. Maj. Op. at 866 n. 20. This immediately brings to the forefront what is perhaps the true kernel of my disagreement with the majority: how and why is Dersch’s cause of action under the PMPA extinguished by its agreement under protest (ostensibly to preserve its rights under the PMPA) to the unlawful conditions that are the trigger of those very rights? In the interest of bringing this dissent to a final close, I leave that question for future discussion and possible resolution.
. The ultimate holding of Beachler, that there was no nonrenewal, does not undermine this analysis. That holding resulted from an examination of whether the prospective effect of the announced assignment would be nonre-newal. Similarly, Dersch’s case should be analyzed to determine if the prospective effect of the take-it-or-leave-it offer would be nonre-newal, which, as noted supra, I believe it would be.
. The state law sections relevant to the Disputed Provisions are set forth in the majority opinion, supra, at 851-52 nn. 4-5.
. This is an assumption, the validity of which is not clear. First, it is not clear that a contract provision in itself actually violates § 2805(f)(1). The language speaks of the conduct of the franchisor in requiring a state or federal law waiver, not of the invalidity of the provision itself. As other courts have held, requesting a waiver of a franchisee's legal rights is not, per se, illegal. It is only when that waiver is part of a take-it-or-leave-it contract, and there are threats of nonrenewal if not accepted, that § 2805(f)(1) is violated. See Coast Village, Inc.,
Second, the effect of Article 19 in this context may, in some sense, be illusory. A franchisee faced with a take-it-or-leave-it contract containing provisions objectionable under § 2805(f)(1) cannot negotiate those terms, as the phrase “take-it-or-leave-it” makes clear. After the contract becomes effective, Shell is not simply going to remove those terms upon the objection of a franchisee that § 2805(f)(1) has been violated (especially under the majority’s view eviscerating such a franchisee's PMPA rights). Instead, at that point, litigation will commence. Only after a court has ruled that § 2805(f)(1) has been violated would Article 19 possibly effect an amendment of the offending provision, thereby merely duplicating, in part, what the court's ruling has already done. From this perspective, Article 19 is mere surplusage to the PMPA remedies. Although likely well-intentioned, enforcement of Article 19 might be as difficult and costly as enforcement of rights under the PMPA.
This is not to say Article 19 lacks any valid purpose. If Shell were to pursue a breach of contract action against a franchisee, the franchisee might defend by claiming the contract is void for illegality of certain provisions. Article 19 might operate in such circumstances to amend the offending contract provisions and allow the primary claim, breach of contract, to proceed on the merits. That curative use of Article 19 is starkly different from the nullifying use being advocated by Shell in this case.