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Checkrite Petroleum v. AMOCO Oil Co.

decided: April 1, 1982.

CHECKRITE PETROLEUM INC.
v.
AMOCO OIL CO.



Appeal from United States District Court, Southern District of New York.

Before Feinberg, Chief Judge, and Van Graafeiland and Meskill, Circuit Judges.

Author: Meskill

Amoco Oil Company ("Amoco") appeals from a judgment of the United States District Court for the Southern District of New York, Brieant, J., enjoining it under the Petroleum Marketing Practices Act, 15 U.S.C. §§ 2801 et seq. (Supp. IV 1980) ("PMPA"), from terminating*fn1 its agreement with Checkrite Petroleum, Inc. ("Checkrite") except in accordance with the PMPA and awarding Checkrite attorney's fees. Because we find that the PMPA does not apply to the relationship between Amoco and Checkrite, we reverse.*fn2

BACKGROUND

On March 31, 1976, Amoco and Checkrite entered into a contract covering the five-year period ending May 30, 1981. The agreement, which was drafted by Amoco, designated Checkrite a "broker." Under the terms of the contract, Checkrite agreed to "cause" retail gasoline dealers listed in an attached Schedule "A"

to execute and deliver to Amoco Dealer Sales Agreements on Amoco's standard form being offered to Amoco in the Metropolitan New York City area whereby such dealers contract to purchase from Amoco, petroleum products for resale at said service stations.

App. at 18. As consideration for Checkrite's efforts, Amoco agreed to pay Checkrite a commission of 1.9 cents on each gallon of gasoline and ten percent on the dollar volume of motor oil sold by Amoco to the dealers listed on Schedule "A".

Amoco entered into contracts directly with these retail dealers under which Amoco agreed to sell and to deliver gasoline and diesel fuel to the dealers at its standard prices. The dealer agreements also provided for the dealers' use of Amoco's trademark.

Amoco informed Checkrite by letter dated November 25, 1980 that it did not intend to renew or extend its agreement with Checkrite after the May 30, 1981 expiration date. Checkrite then instituted this suit, claiming that it maintained a "franchise relationship" with Amoco and was therefore protected against termination under the PMPA. The complaint sought actual damages, exemplary damages, injunctive and declaratory relief, attorney's and expert witness' fees, costs and disbursements.

The district court ruled that while Checkrite would not be entitled to protection under a "narrow reading" of the statute,

Checkrite fits within the purpose of the PMPA as an independent entrepreneur whom Congress thought worthy of protection against unjustified termination; therefore Checkrite is a franchisee within the purpose of the statute.

App. at 86. Accordingly, the court granted summary judgment for Checkrite.*fn3

Discussion

The purpose of the PMPA is to establish "minimum Federal standards governing the termination and nonrenewal of franchise relationships for the sale of motor fuel by the franchiser or supplier of such fuel." S.Rep.No.95-731, 95th Cong., 2d Sess. 15, reprinted in (1978) U.S.Code Cong. & Ad.News 873, 873. Section 102 of the PMPA, 15 U.S.C. § 2802, prohibits a franchiser from terminating or failing to renew a franchise without satisfying certain notice provisions and without stating a reason for termination sanctioned by the act. It is undisputed that Amoco did not satisfy the PMPA termination requirements in its dealings with Checkrite. The issue in this case is whether Checkrite is a "franchisee" within the meaning of the act.

"In any case concerning the interpretation of a statute the "starting point' must be the language of the statute itself." Lewis v. United States, 445 U.S. 55, 60, 100 S. Ct. 915, 918, 63 L. Ed. 2d 198 (1980). "Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive." Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S. Ct. 2051, 2056, 64 L. Ed. 2d 766 ...


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