* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

1 Motiva is a joint venture of Shell Oil Company and Saudi Refining, Inc.

United States Court of Appeals

Fifth Circuit

FILED

September 5, 2007

Charles R. Fulbruge III

Clerk

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-31097

MUNIBUDDIN YOUSUF; YOUSUF INC, doing business as Read Road Shell

Plaintiffs-Appellants

v.

MOTIVA ENTERPRISES LLC

Defendant-Appellee

Appeal from the United States District Court 

for the Eastern District of Louisiana, New Orleans 

USDC No. 2:04-CV-2787

Before KING, GARZA, and BENAVIDES, Circuit Judges.

PER CURIAM:*

Plaintiffs-appellants Munibuddin Yousuf and Yousuf, Inc. (collectively

“Yousuf”) leased and operated a Shell service station in New Orleans from 1992

to 2005 pursuant to franchise contracts with defendant-appellee Motiva

Enterprises,L.L.C. (“Motiva”).1In September 2004, Motiva notified Yousuf that

it was terminating their franchise relationship effective December 15, 2004

because of Yousuf’s alleged failure to meet Motiva’s image standards during
No. 06-31097

2

recent inspections of the service station. Yousuf filed suit against Motiva in

October 2004, challenging the termination under the Petroleum Marketing

Practices Act (“PMPA”), 15 U.S.C. §§ 2801-2841, and state law causes of action.

Yousuf promptly filed a motion for a temporary restraining order (“TRO”) and

a preliminary injunction in accordance with § 2805 ofthe PMPA, which provides

for such relief within a 90-day period after the franchiser gives formal

notification of termination or nonrenewal.

At the TRO conference on November 22, 2004, the parties announced that

they had executed a “Stipulated Standstill Agreement” (the “standstill

agreement”) under which the parties extended their franchise agreements “to

maintain the status quo in order to permit Plaintiffs to continue to occupy and

conduct business at the Service Station Property . . . pending the district court’s

ruling on the preliminary injunction.” The district court adopted the agreement

as an order of the court. As discovery progressed, the parties reached another

agreement, and on December 22, 2004 they filed a joint stipulation and motion

for the entry of a consent judgment on Yousuf’s preliminary injunction motion.

In accordance with the stipulation and motion, the district court issued a

preliminary injunction ordering that the franchise agreements continue in force

until judgment is rendered on Yousuf’s claim for a permanent injunction and

reflecting that “on motion of the parties, the Court ma[de] no findings of fact or

conclusions of law pursuant to F.R.C.P. Rule 52 in connection with plaintiffs’

motion for preliminary injunction, such findings and conclusions being waived

by the parties and deferred until the Court enters judgment on plaintiffs’ claim

for permanent injunction.”

Before a jury could hear Yousuf’s case, however, Hurricane Katrina

effectively destroyed the station. Recognizing that further litigation over the

September 2004 termination was now purposeless, Motiva rescinded its notice

of termination in November 2005 and eventually terminated Yousuf’s franchise
No. 06-31097

2 Yousuf clarifies in his reply brief that Motiva’s “unilateral act of purportedly

withdrawing the termination notice three months after Hurricane Katrina . . . is not the basis

for [Yousuf’s] entitlement to fee award. The preliminary injunction is.”

3

“[T]he characterization of prevailing-party status for awards under fee-shifting

statutes . . . is a legal question subject to de novo review.” Bailey v. Mississippi, 407 F.3d 684,

687 (5th Cir. 2005).

3

under the premises-destruction provisions of the PMPA, 15 U.S.C. § 2802(c)(7),

and the franchise agreements. Yousuf moved to dismiss all of his substantive

claims as moot and, based on his “success in obtaining the standstill agreement

and later the preliminary injunction, and Motiva’s subsequent rescission of the

termination,”2sought attorney’s fees and costs under 15 U.S.C. § 2805(d). The

district court denied the motion for attorney’s fees and costs and granted the

motion to dismiss the remaining claims. Yousuf appeals.3

Section 2805(d)(1) ofthePMPA contains a fee-shifting provision specifying

that a franchisee who prevails in an action brought under § 2805(a) may be

entitled to reasonable attorney’s fees. Although the PMPA does not define

“prevailing party,” we are guided by the extensive case law interpreting that

concept, which appears in a number of statutes. See Buckhannon Bd. & Care

Home, Inc. v. W. Va. Dep’t Health & Human Res., 532 U.S. 598, 603 n.4 (2001).

Our court has held that “to be deemed a ‘prevailing party,’ at a minimum, a

plaintiff must receive some relief on the merits of his claim.” Energy Mgmt.

Corp. v. City of Shreveport, 467 F.3d 471, 482 (5th Cir. 2006) (citing Walker v.

City of Mesquite, 313 F.3d 246, 249 (5th Cir. 2002)) (some internal quotation

marks omitted); see also Buckhannon, 532 U.S. at 603. In addition, we have

“determined that for a party to qualify as a prevailing party it must (1) obtain

actual relief, such as an enforceable judgment or a consent decree; (2) that

materially alters the legal relationship between the parties; and (3) modifies the

defendant's behavior in a way that directly benefits the plaintiff at the time of

the judgment or settlement.” Energy Mgmt., 467 F.3d at 482 (citing Walker, 313
No. 06-31097

4 As we noted in Planned Parenthood, 480 F.3d at 740 n.2, Taylor is a pre-Buckhannon

case, but the Eleventh Circuit reaffirmed its holdings in Wyner v. Struhs, 179 Fed. Appx. 566,

568 (11th Cir. 2006), rev’d on other grounds, Sole v. Wyner, 127 S. Ct. 2188 (2007). Though

the Supreme Court reversed Wyner v. Struhs, it did so because the party that obtained the

preliminary injunction ultimately lost on the merits as the case developed. Sole, 127 S. Ct. at

2196. The Court “express[ed] no view on whether, in the absence of a final decision on the

merits of a claim for permanent injunctive relief, success in gaining a preliminary injunction

may sometimes warrant an award of counsel fees.” Id.

4

F.3d at 249) (internal quotation marks omitted). The Supreme Court has also

rejected the “catalyst theory” previously applied by many circuits, making clear

that “[a] defendant’s voluntary change in conduct, although perhaps

accomplishing what the plaintiff sought to achieve by the lawsuit, lacks the

necessary judicial imprimatur on the change” to establish prevailing party

status. Buckhannon, 532 U.S. at 605.

In Planned Parenthood of Houston & Southeast Texas v. Sanchez, a case

in which providers of family planning and abortion services obtained a

preliminary injunction against the impending enforcement of a Texas statute

that prohibited state distribution of federal family planning funds to electiveabortion providers, we recently examined the approaches taken by other circuits

in identifying the circumstances, if any, under which a preliminary injunction

may support an award of attorney’s fees. 480 F.3d 734, 740 (5th Cir. 2007). As

we discussed, several circuits have determined that a preliminary injunction

that merely preserves the status quo temporarily will not confer “prevailing

party” status on a party; instead, the preliminary injunction must (i) reflect a

merits-based decision on an issue involved in the case, see, e.g., John T. v. Del.

County Intermediate Unit, 318 F.3d 545, 558-59 (3d Cir. 2003); Dubuc v. Green

Oak Twp., 312 F.3d 736, 753 (6th Cir. 2002); Taylor v. City of Fort Lauderdale,

810 F.2d 1551, 1558 (11th Cir. 1987)4; (ii) constitute substantive, indefeasible

relief akin to final relief on the merits because, for example, “the party’s claim

[for a] permanent injunction is rendered moot by the impact of the preliminary
No. 06-31097

5 We do not address whether the cited circuits fall into more than one of these

categories.

5

injunction,” N. Cheyenne Tribe v. Jackson, 433 F.3d 1083, 1086 (8th Cir. 2006);

see also, e.g., Dupuy v. Samuels, 423 F.3d 714, 719, 723 (7th Cir. 2005); (iii) grant

the party concrete and irreversible relief in a merits-based decision that

vindicates the party’s claim and is not appealed by the opposing party, see, e.g.,

Select Milk Producers, Inc. v. Johanns, 400 F.3d 939, 947-48 (D.C. Cir. 2005);

or (iv) incorporate some combination of these factors.5 See Planned Parenthood,

480 F.3d at 740-41. We also noted that “[t]he Ninth Circuit has . . . taken a

relatively generous approach, at least in principle, stating that a ‘preliminary

injunction issued by a judge carries all the “judicial imprimatur” necessary to

satisfy Buckhannon,’” but that the circuit has recognized an exception where

“the plaintiff scores an early victory by securing a preliminary injunction, then

loses on the merits as the case plays out.” Id. at 741 (quoting Watson v. County

of Riverside, 300 F.3d 1092, 1096 (9th Cir. 2002)). The Supreme Court recently

applied this exception to deny prevailing party status without addressing when,

if ever, success in gaining a preliminary injunction may serve to create a

prevailing party. See Sole v. Wyner, 127 S. Ct. 2188, 2196 (2007). Finally, the

Fourth Circuit has indicated that a preliminary injunction might never serve as

the basis for prevailing party status, explaining that “the merits inquiry in the

preliminary injunction context is necessarily abbreviated” and is balanced with

other considerations, such as the likelihood of irreparable harm. Smyth v.

Rivero, 282 F.3d 268, 276 (4th Cir. 2002).

In PlannedParenthood, we had no need to choose among these approaches

because the preliminary injunction issued in that case failed to confer prevailing

party status on the plaintiffs under any approach. 480 F.3d at 741. We

similarly have no need to choose among these approaches here. Neither the
No. 06-31097

6

preliminary injunction nor the court-ordered standstill agreement (which

effectively functioned as a temporary restraining order) did anything more than

temporarily preserve the status quo, maintaining the parties’ preexisting

franchise relationship until the legal issues surrounding the approaching

termination of that relationship could be addressed on the merits. Cf. Dersch

Energies, Inc. v. Shell Oil Co., 314 F.3d 846, 862-63 (7th Cir. 2002)

(characterizing PMPA injunctive relief, sought by a plaintiff to forestall the

impending termination of his franchise, as the district court’s remedy “to

preserve the status quo between the parties during the pendency ofthe litigation

(i.e., the existing terms of the franchise relationship)”). While Yousuf argues

that the orders did more than preserve the status quo by delaying the contract

termination date set by Motiva, Planned Parenthood held in a comparable

situation that a preliminary injunction delaying the enforcement of a state law,

“thereby maintaining the flow of federal funds to Plaintiffs,” merely preserved

the status quo. 480 F.3d at 741. Moreover, this is not a situation in which a

court order substantially achieves a litigation goal and is thus akin to final

relief. Although Yousuf’s claims became moot after the grant of the preliminary

injunction, the reason they were moot was not because the court orders were so

successful for Yousuf that they rendered any further relief unnecessary, but

rather because of the unrelated impact of Hurricane Katrina, which eliminated

any hope that Yousuf would be able to keep the franchise contracts in effect.

We recognize that Motiva did not appeal the orders and that the orders

bore the district court’s imprimatur. However, even the broadest circuit court

approach incorporates the Supreme Court’s requirementthat a prevailing party

“succeed[] on any significant issue in litigation which achieve[s] some of the

benefit[he] soughtin bringing suit,” Tex. State Teachers Ass’n v. Garland Indep.

Sch. Dist., 489 U.S. 782, 791-92 (1989) (internal quotation marks omitted),

thereby “receiv[ing] atleast some relief on the merits of his claim,” Buckhannon,
No. 06-31097

6

In Watson, by contrast, the Ninth Circuit noted that the district court “analyz[ed] the

merits of Watson’s claim” before granting the preliminary injunction at issue. 300 F.3d at

1094.

7

532 U.S. at 603-04 (internal quotation marks omitted). See, e.g., Carbonell v.

INS, 429 F.3d 894, 900 & n.5 (9th Cir. 2005). As noted earlier, our circuit also

requires that, at a minimum, a party must obtain some relief on the merits of his

claim to be considered a prevailing party. See Energy Mgmt., 467 F.3d at 482.

Here, the district court did not engage in any consideration of the merits of

Yousuf’s claim, even to a minimal degree6; to the contrary, the district court

explicitly disclaimed that it made any findings of fact or conclusions of law in its

order granting the preliminary injunction, as the parties agreed to the order and

“waived . . . and deferred” all merits analysis until the entry of judgment on

Yousuf’s claim for a permanent injunction. The standstill agreement does not

reflect any merits consideration by the district court either, but instead merely

“maintain[ed] the status quo . . . pending the district court’s ruling on the

preliminary injunction.”

Our conclusion is also not altered by the fact that both parties consented

to the agreements underlying the court orders. As Yousuf points out, the

Supreme Court has determined that a “settlement agreement[] enforced through

a consent decree” may be sufficient to entitle a party to attorney’s fees. See

Buckhannon, 532 U.S. at 604. But in such a situation, the decree substitutes for

formal relief on the merits, essentially vindicating the merits of the party’s

claims by achieving some of the benefit he sought to obtain on the merits before

the court. Cf. Maher v. Gagne, 448 U.S. 122, 129 (1980) (approving the use of

settlement agreements as the basis for awards of attorney’s fees while relying,

in part, on a Senate Report’s statement that “for purposes of the award of

counsel fees, parties may be considered to have prevailed when they vindicate

rights through a consent judgment or without formally obtaining relief” (citing
No. 06-31097

8

S. REP. NO. 94-1011, at 5 (1976), reprinted in 1976 U.S.C.C.A.N. 5908, 5912)).

Even assuming, arguendo, that a court-adopted agreement between opposing

parties may substitute for a typical preliminary injunction to support prevailing

party status, the orders to which the parties consented here were issued in place

of a court-crafted preliminary injunction that would have been granted on a

diminished analysis of the merits. “The PMPA sets a more indulgent standard

for relief than does the traditional Rule 65 preliminary injunction,” in that it

requires neither a showing of irreparable injury nor a substantial likelihood of

success on the merits. Bridges Enters., Inc. v. Exxon Co., U.S.A., 820 F.2d 123,

124 (5th Cir. 1987); 15 U.S.C. § 2805(b)(2). Instead, the franchisee may obtain

a preliminary injunction by showing that “(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,” as long as the court

determines that the balance of hardships favors the franchisee. 15 U.S.C.

§ 2805(b)(2). Some courts have restated the second prong as requiring the

franchisee to show “a reasonable chance of success on the merits,” see, e.g.,

Beachler v. Amoco Oil Co., 112 F.3d 902, 905 (7th Cir. 1997), while other courts

appear to have interpreted the provision more literally, looking to the

seriousness of the questions raised by the franchisee, see, e.g., Ewing v. Amoco

Oil Co., 823 F.2d 1432, 1436 (10th Cir. 1987). Regardless of the interpretation,

we conclude that Motiva’s consent to forgo this undeniably lenient inquiry,

through orders that resolved no merits-based issues but instead “waived . . . and

deferred” any court findings of fact and conclusions of law until entry of

judgment on Yousuf’s claim for a permanent injunction, did not serve to

vindicate Yousuf’s claims on the merits or otherwise serve as an adequate
No. 06-31097

7 Ketterle v. B.P. Oil, Inc., 909 F.2d 425 (11th Cir. 1990), in which the Eleventh Circuit

found that a plaintiff was entitled to attorney’s fees based on a PMPA preliminary injunction,

is not to the contrary. Though the defendant in Ketterle argued that the lax PMPA standard

for a preliminary injunction does not relate to the merits of the action, the court did not

address the argument, looking only at whether the PMPA standard required a “colorable

claim.” Id. at 430. Under the precedent followed by the court, a plaintiff bringing a “colorable

claim” could be entitled to attorney’s fees “ifthe defendant simply complie[d]withthe plaintiff’s

demands and moot[ed] the case for reasons that ha[d] nothing to do with the potential merit

of the suit.” Dunn v. Fla. Bar, 889 F.2d 1010, 1015 (11th Cir. 1989) (quoting Hennigan v.

Ouachita Parish Sch. Bd., 749 F.2d 1148, 1153 (5th Cir. 1985)). In this case, unlike Ketterle,

Motiva did not comply with Yousuf’s demands after the preliminary injunction issued; instead,

the case was mooted by an unrelated event that allowed Motiva to terminate the parties’

contracts on another ground. Moreover, Ketterle was a pre-Buckhannon case that appears to

have applied the “catalyst theory” rejected in Buckhannon. See Buckhannon, 532 U.S. at 605.

9

substitute for formal, merits-based relief such that Yousuf is entitled to

attorney’s fees.7

For the foregoing reasons, we AFFIRM.