UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MOHAMMED RAWOOF )

)

Plaintiff, )

) 02 C 5892

v. ) 

) Judge George M. Marovich

TEXOR PETROLEUM COMPANY, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiff Mohammed Rawoof (“Rawoof”) filed a two-count complaint against defendant

Texor Petroleum Company (“Texor”). Rawoof claimed that Texor violated the Petroleum

Marketing Practices Act (“PMPA”), 15 U.S.C. § 2801, et seq. Nearly two years after filing the

suit and on the last day of discovery, Rawoof moved for an order allowing him to substitute SHL,

Inc., a corporation which Rawoof described as the real party in interest. The Court denied the

motion for substitution on the grounds that it would be unduly prejudicial to defendant. 

Defendant has now moved for summary judgment (1) with respect to plaintiff’s claims on the

grounds that plaintiff lacks standing and (2) with respect to attorneys’ fees. For the reasons set

forth below, the Court grants in part and denies in part defendant’s motion for summary

judgment.

I. Background

A. The Petroleum Marketing Practices Act

“Congress enacted the PMPA to address the disparity in bargaining power then existing

between franchisors (typically major oil companies) and franchisees in the petroleum industry[.]” 

Dersch Energies, Inc. v. Shell Oil Co., 314 F.3d 846, 855 (7th Cir. 2002). A franchisee is a
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“retailer or distributor (as the case may be) who is authorized or permitted, under a franchise, to

use a trademark in connection with the sale, consignment, or distribution of motor fuel.” See 15

U.S.C. § 2801(4). The PMPA prohibits franchisors from terminating a franchise unless the

franchisor both (a) terminates the franchise for one of the reasons allowable under the statute and

(b) complies with the statute’s notice requirements. See 15 U.S.C. §§ 2802(b), 2804. The

PMPA provides a private right of action to the franchisee when a franchisor violates § 2802. See

15 U.S.C. § 2805. Rawoof alleged in his complaint that Texor terminated his franchise without

just cause and without proper notice. 

B. Procedural background

Two years after filing the case and on the day that discovery was scheduled to close,

Rawoof filed a motion to substitute SHL, Inc. for himself as plaintiff. Rawoof argued that SHL,

Inc. was the real party in interest and should be substituted. The Court, for two main reasons,

ruled that it was too late to substitute a new plaintiff. In its opinion (the “Rule 17 opinion”), the

Court first noted that all of the information necessary to ascertain the real party in interest was in

the plaintiff’s hands before he filed suit. Second, the Court concluded that defendant would be

prejudiced by the substitution given that (a) discovery was set to close and (b) Rawoof (who was

said to be the sole shareholder and officer) had passed away, thereby eliminating defendant’s

chance to take his Rule 30(b)(6) deposition. 

To be clear, in its Rule 17 opinion, the Court did not rule on whether Rawoof (or SHL,

Inc., for the matter) had standing to pursue the PMPA claims. Despite defendant’s attempt to

paint the Rule 17 opinion as a decision on the standing issue, plaintiff is correct that the Court
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has yet to make a determination on that issue. The Court determined only that it was too late for

plaintiff to avail himself of the benefits of Rule 17 of the Federal Rules of Civil Procedure.

C. Summary Judgment evidentiary issues

Before the Court discusses the disputed and undisputed facts, it reiterates the importance

of complying with Local Rule 56.1. Local Rule 56.1 outlines the requirements for the

introduction of facts parties would like considered in connection with a motion for summary

judgment. As the Court notes on its website (and has mentioned in multiple opinions), the Court

enforces Local Rule 56.1 strictly. See Thomas v. CitiMortgage, Inc., Case No. 03 C 6177, 2005

WL 1712266 at *1 n. 1 (N.D. Ill. Jul. 20, 2005); Perez v. City of Batavia, Case No. 98 C 8226,

2004 WL 2967153 at *10 (N.D. Ill. Nov. 23, 2004); see also Ammons v. Aramark Uniform

Services, Inc., 368 F.3d 809, 817-818 (7th Cir. 2004). Facts that are argued but do not conform

with the rule are not considered by the Court. 

Defendant complains that plaintiff has denied many of defendant’s facts without putting

forth admissible evidence and, thus, that many of defendant’s facts should be deemed admitted. 

Defendant is correct that where one party supports a fact with admissible evidence and the other

party denies the fact without citation to admissible evidence, the Court deems the fact admitted. 

See Ammons v. Aramark Uniform Services, Inc., 368 F.3d 809, 817-818 (7th Cir. 2004). This,

however, does not absolve defendant of its initial burden of putting forth admissible evidence to

support its facts. Asserted “facts” not supported by deposition testimony, documents, affidavits

or other evidence admissible for summary judgment purposes are not considered by the Court. 

Among the types of evidence admissible for summary judgment purposes are admissions a party

makes in a brief or motion to a court. See Fed. R. Civ. P. 56(c) (“The judgment sought shall be
1The Court deems these facts admitted because defendant put these facts into its statement

of facts and supported them with citations to plaintiff’s admissions in briefs filed previously with

the Court. Plaintiff failed to put forth any contrary evidence of damages or other injury he

suffered by Texor’s alleged actions.

2The defendant argues that the Court should ignore these asserted facts on the grounds

that they contradict an admission in a deposition. Not so. Defendant is correct that a party

“cannot create an issue of material fact merely by manufacturing a conflict in his own testimony

by submitting an affidavit that contradicts an earlier deposition.” Piscione v. Ernst & Young,

L.L.P., 171 F.3d 527, 532 (7th Cir. 1999). In such a circumstance, a court would ignore the

contrary affidavit (unless the deposition testimony demonstrably resulted from such

circumstances as a poorly-worded question or a memory lapse). Id. at 532-533. Here, however,

the affidavit does not contradict the affiant’s deposition. (If the affiant gave a deposition, it has

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rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on

file, together with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.”) (emphasis added); Woods

v. City of Chi., 234 F.3d 979, 989 (7th Cir. 2000) (“An ‘admission’ includes ‘anything which is

in practical effect an admission’ including statements made in a brief presented to the district

court[.]”) (internal citations omitted).

Two facts are undisputed. SHL, Inc. is the real party in interest. Any injury suffered by

Rawoof at the hands of Texor was indirect (by virtue of his status as a shareholder of SHL, Inc.).1

Two facts are disputed. First, according to plaintiff, on February 15, 2005, SHL, Inc.

issued a resolution ratifying Rawoof’s filing of this suit. Second, according to plaintiff, SHL,

Inc. has agreed to be bound by any determination made in this case. The defendant disputes

these facts with an admission by plaintiff that Rawoof was the sole shareholder and officer of

SHL, Inc. That evidence contradicts plaintiff’s facts because, for reasons that are irrelevant here,

the truth of SHL, Inc.’s ratification of and agreement to be bound by this suit is dependant upon

SHL, Inc.’s having another officer.

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not been submitted to the Court.) Rather, the deposition “testimony” the defendant claims is

contradicted by the affidavit is a statement by plaintiff’s counsel at a deposition. The Piscione

rule is inapplicable.

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II. Summary Judgment Standards

Summary judgment should be granted when “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a matter

of law.” Fed. R. Civ. P. 56(c). When making such a determination, the Court must construe the

evidence and make all reasonable inferences in favor of the non-moving party. See Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Summary judgment is appropriate, however,

when the non-moving party “fails to make a showing sufficient to establish the existence of an

element essential to the party’s case, and on which that party will bear the burden of proof at

trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “A genuine issue of material fact

arises only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a

verdict for that party.” Brummett v. Sinclair Broadcast Group, Inc., 414 F.3d 686, 692 (7th Cir.

2005).

III. Discussion

A. Standing

Defendant makes one argument in favor of its motion for summary judgment on Counts I

and II. Defendant argues that Rawoof has no standing to pursue the PMPA claims against Texor. 

Pursuant to Article III of the Constitution, the Court has jurisdiction only over cases or

controversies and, thus, “parties seeking to invoke the jurisdiction of federal courts must show

that they have standing to sue within the meaning of Article III.” Krislov v. Rednour, 226 F.3d
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851, 857 (7th Cir. 2000). The minimum standing requirements are: (1) an injury in fact; (2) a

causal connection between the injury and the conduct complained of; and (3) a likelihood that the

injury would be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555,

561 (1992). An “injury in fact” is “an invasion of a legally protected interest” which is both

“concrete and particularized” and “actual or imminent.” Lujan, 504 U.S. at 560. The “party

invoking federal jurisdiction bears the burden of establishing these elements with the manner and

degree of evidence required at the successive stages of the litigation.” Id. at 561. It is clear that

Rawoof meets the minimum Article III injury requirement, because he has suffered the indirect

injury that a shareholder suffers when his corporation suffers an injury.

In addition to the minimum Article III standing requirements, courts also impose

“‘prudential limitations’ on the class of persons who may invoke federal jurisdiction.” Massey v.

Helman, 196 F.3d 727, 739 (7th Cir. 1999). For example, generally, “a litigant must assert his

own legal rights and cannot assert the legal rights of a third party.” Massey, 196 F.3d at 739. 

Among the prudential limitations is the “so-called shareholder standing rule[,]” which “is a

longstanding equitable restriction that generally prohibits shareholders from initiating actions to

enforce the rights of the corporation[.]” Franchise Tax Bd. of Cal. v. Alcan Alum. Ltd., 493 U.S.

331, 336 (1990); see also Flynn v. Merrick, 881 F.2d 446, 450 (7th Cir. 1989); Mustafa v.

Equilon Enterprises, LLC, Case No. 00 C 1396, 2000 WL 1364407 at *2 n. 5 (N.D. Ill. Sept. 15,

2000) (dismissing shareholder’s PMPA claim and noting that a “shareholder does not have

standing to bring a cause of action based on an injury to the corporation that results only in an

indirect injury to the shareholder.”). The prudential rule against shareholder standing has

exceptions. A shareholder “with a direct, personal interest in a cause of action [may] bring suit
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even if the corporation’s rights are implicated.” Franchise Tax Bd. v. Alcan Alum., 493 U.S. at

336. 

In this case it is undisputed that Rawoof suffered only the indirect injury of a shareholder. 

Faced with this fact on summary judgment, it is Rawoof’s obligation to come forward with

evidence that he suffered a direct injury. Plaintiff argues in his brief that “Rawoof personally

entered into the dealer franchise agreement with Texor.” If that statement were supported by

admissible evidence, that would suffice to show that Rawoof suffered a direct injury in this case,

and his case could proceed. The problem is that nowhere in his statement of additional facts or

in his response to defendant’s statement of facts does plaintiff put forth evidence to support that

fact. Rule 56(e) provides:

When a motion for summary judgment is made and supported as provided in this

rule, an adverse party may not rest upon the mere allegations or denials of the

adverse party’s pleading, but the adverse party’s response, by affidavits or as

otherwise provided in this rule, must set forth specific facts showing that there is a

genuine issue for trial. If the adverse party does not so respond, summary

judgment, if appropriate, shall be entered against the adverse party.

Fed. R. Civ. P. 56(e). Accordingly, the undisputed facts are that Rawoof lacks standing to pursue

the PMPA claims against Texor. 

Finally, Rawoof makes a last-ditch argument that his claims should proceed. He puts

forth evidence (albeit disputed evidence) that in February 2005, SHL, Inc. ratified his suit and

agreed to be bound by the Court’s determination in this case. Plaintiff is correct that ratification

is listed as one of the ways (the others include substitution and joinder) to involve the real party

in interest in a case brought by the incorrect party. See Fed. R. Civ. P. 17. This Court, however,

has already ruled that plaintiff’s attempt to substitute SHL, Inc. for Rawoof was made too late. 
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The ratification occurred months after the Court ruled that it was already too late for plaintiff to

avail himself of Rule 17. The ratification, like the motion to substitute, came too late.

Because plaintiff has failed to put forth evidence that he has suffered a direct injury and

because the undisputed evidence is that plaintiff’s only injury is the indirect injury of a

shareholder, Rawoof lacks standing to pursue the PMPA claims. Accordingly, the Court grants

Texor’s motion for summary judgment on Counts I and II.

B. Attorneys’ fees

Defendant also argues that it is “entitled” to its attorneys fees in this case. The PMPA

provides that where a franchisee brings suit against a franchisor, “the court may, in its discretion,

direct that reasonable attorney and expert witness fees be paid by the franchisee if the court finds

that such action is frivolous.” See 15 U.S.C. § 2805(d)(3). 

Here, the Court does not deem the plaintiff’s case to be frivolous. Due to prudential

standing considerations, the Court never considered the merits of the case, so the Court has no

reason to think the case was frivolous on its merits. Nor does the Court deem plaintiff’s

arguments on the procedural issues to be frivolous. Because the Court does not conclude that the

action was frivolous, the statute does not grant the Court discretion to award attorneys’ fees to

Texor. Even if it had such discretion, it would still not grant such fees. 
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IV. Conclusion

For the reasons set forth above, the Court grants in part and denies in part defendant’s

motion for summary judgment. The Court grants defendant’s motion for summary judgment on

Counts I and II. The Court denies defendant’s motion for summary judgment with respect to

attorneys’ fees. 

ENTER:

 

George M. Marovich

United States District Judge

DATED:02/08/06