# United States CourtofAppeal s Fo r th e Se ve n th C irc u it Ch i cago , I l l i noi s 6 0604 Subm i tte d Jul y 7, 20 09 Deci ded A ugust 1 3, 20 09

B efore R IC H A R D A . PO SN E R, Cir cu i tJudg e JO E L M . FL A U M , Cir cu i tJudg e JO H N D A N IE L T IN D E R, Cir cu i tJudg e 

### ORESTES R. GARCIA, an individual, ] Appeal from the United Plaintiff-Appellant, ] States District Court for ] the Northern District of No. 09-2675 v. ] Illinois, Eastern Division. ] BP PRODUCTS NORTH AMERICA, ] No. 1:09-cv-03529 INCORPORATED, a Maryland ] corporation, et al., ] James B. Zagel, Defendants-Appellees. ] Judge.
Orest es Garci a, the f ra nchis ee ofa gas st ati on, appeal s the di str i ct c ourt ’ s deni alo f hi s r equest f ora prel i m i naryi nj uncti on pursuant to the Pe tr ol eum M ar ket i ng Pr acti ces A ct ( “P M PA”) , 1 5 U. S
. C. § § 28 01
- 28 07
. Ga r ci a so ug htt o pr ev en t BP Pr o duct s f r o m s el l i ngthe gas st ati on he f ra nchis es to B& R OilCom pany. Gar ci a a l so ask s thi s co urt f oran i nj uncti on preve nti ng the sa l e pendingr eso l uti on o fhi s a pp eal
. W e hav e j uri sdic ti on pursuant to 28 U. S
. C. § 1 29 2( a) ( 1)
. We de ny the r eque stf o r a n i nj unc ti o n pe ndi nga ppea l a nd a f fi r m the d istri ct cou rt’s order. G arcia began ope rating a gas sta tion ow ne d by B P in 199 7 as a franch isee. Every thre e y ear s s i nce 1 997, Garci a r ecei ved w ri tte n noti ce fro m BP that hi s PM PA fra nchis e l eas e was be i ng r enewed f orano therthr ee yea rs . Ear l y i n 200 9 Garc i a r ecei ved not i ce that B P p lan n ed to se ll th e p ro p er ty an d tra n sfe r its ob liga tio n s u n d er th e le as e t o a th ird p ar ty . I n Feb ruar y Gar ci a r ecei ved an o f f erfro m Buchanan E nergy t o pu rchas e the ga s s tat i on 

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pr o per tyf o r $ 1, 34 0, 00 0. T he o f f erwas c o nt i ng en t upo n Buc ha na n Ene r g y pur ch as i ngthe p ro p er ty from B P
. A lth ou gh G ar c ia s ay s t h at h e a gr ee d to p u rc h as e t h e p ro p er ty , th e s ale f r o m BP to Buc ha na n f ai l ed to c l o se . La te r Ga r ci a l ea r ne d tha t BP was pl an ni ngt o s el l the proper ty to B& R Oil, and that B& R Oilhad agr eed to se l l the proper ty to a thi rd- partyf or $1
. 7 m i l l i o n. On June 5 , 20 09, Garci a r ecei ved a l ett erfro m BP gr anti ng hi m a unil ate ra l o nem on th ex te n sio n of th e m os t re c en t fra n c h ise ag re em en t t o Se p te m b er 30 , 200 9. It c on tin u ed , “T h is e x te n sio n sh all in n o w ay co n st itu te a re n ew al of y ou r A gr ee m en t. In all othe r re spects o therthan the t er m i nati on date , yo u shal l be bound du ri ng thi s e xtensi on by the t er m s o fthe A gr eem ent, and BP shal l co nti nue to have the ri ght t o ter m i nate or no nr en ew y o ur Agr ee m en t f o r a ny r ea so n pe r m i tt ed unde r the Pe tr o l eu m M ar k et i ng Pract i ces A ct ( ‘ PM PA ’ )
. ” Bel i evi ng tha t hi s l eas e was be i ng te rm i nated o r nonre new ed, Garci a fi l ed sui t o n J u n e 1 1 , 2 0 0 9 , a r g u i n gth a tB P a n d B &RO i l h a d v i o l a t e d p r o v i s i o n s o fth e P MPA
. H e m ove d fo r a t em pora ryr est ra i ni ng o rderand i nj uncti on t o preve nt the sa l e t o B& R Oilas w el l as any subsequent sal e t o a thi rd party. The di str i ct c ourtdeni ed the m oti on f oran i nj uncti on, fi nd i ng tha t Gar ci a had notsho w n that hi s l eas e was te rm i nated o r nonre new ed or th at an y t ra n sfe r of h is lea se w ou ld res u lt in a b re ac h of co n tr ac t o r vio lat ion of st at e la w . Ga r c i a ’ s p a p e r s i n th i s c o u r td i d n o ts a y wh e t h e r th e s a l e o fth e g a s s t a t i o n t o B &R Oilhad tak en pl ace, so we aske d the defendants. BP i nfo rm ed us thatthe sal e t oo k pl ace on July 2, 2009 ( four d ays before G arcia fi led h is m otion). In h is r ep ly G arcia asks th e cou rt to e nj o i n B&R Oi l fr o m t er m i na tingo r no nr en ewi nghi s th r ee - y ea r l ea se , fr o m s el l i ngthe p ro p er ty , an d from n eg ot iat in g for th e s ale of th e p ro p er ty d u rin g t h e p en d en c y of t h is ap p ea l. Congre ss enacte d the PM PA i n an e f f or t t o prot ect “fra nchis ees fro m arbi tr ar y o r disc ri m i nator y t er m i nati on o r non- re new alo fthei r f ra nchis es. ” S
. Rep. N o. 95
- 731, at15 , r epr i nt e d i n 19 78 U. S
. C. C. A. N
. 8 73 , 8 74
. T he l eg i sl at i o n was de si g ne d t o e ve n the b ar g ai ni ng po wer b etwee n fr an ch i so r s an d fr an ch i se es b y a do ptingmin i m um s ta nda r ds g o ve r ni ngthe te rm in at ion or n on re n ew al of a p et ro leu m fran c h ise
. Se ei d. ; Br ac h v
. Am oc o Oil Co. , 67 7 F
. 2d 1213 , 12 16 ( 7th Ci r. 19 82)
. Thi s purpose i s r efl ecte d i n the provi si on pro vi ding f or p re lim in ar y inj u n c tiv e re lief, 15 U .S.C . § 28 05 (b )(2)
. Se eBe ac hl e rv. Am oc o Oil Co. , 11 2 F
. 3d 902, 905 (7th C ir. 1997). Th e PM PA requ ires a d istri ct cou rt to grant a p reli m inary inj u n c tio n if: ( A ) the f ra nchis ee shows- ( i ) the f ra nchis e o fwh i ch he i s a party has bee n ter m i nated o r the fra nchis e

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r el at i o ns hi p o fwhi chhe i s a par tyha s no t be enr en ewe d, a nd ( i i ) ther e e xi st suf fi ci entl y s er i ous ques ti ons going to the m er i ts to m ake such que st i o ns a f ai r g r o und f o r l i ti g at i o n; a nd ( B) the c o ur t det er m i ne s th at, o n b al an ce , the ha r dsh i ps i m po se d upo n the f r an ch i so r b y the i ss ua nc e o fs uchpr el i m i na r y i nj unc ti ve r el i efwi l l b e l es s th anthe ha rd sh ip w hich w ou ld be im p osed up on su ch fran ch isee i f su ch prelim inary i nj un c t i v e r e l i e fwe r e n o tg r a nt e d. 15 U
. S. C. § 2 805(b) ( 2)
. I t i s the fra nchis ee’ s i ni ti alburden under the PM PA to es tabl i sh that its fran c h ise h as be en te rm in at ed or n ot ren ew ed
. See 15 U .S.C . § 28 05 (c ); B eachle r v. A m oco O i l Co. , 1 12 F
. 3d 90 2, 9 05 ( 7th Ci r . 1 99 7)
. Ou r r ev i ew o fthe di st r i ctc o ur t' s dec i si o n t o de ny a p re lim in ar y inj u n c tio n u n d er § 28 05 (b )(2) is n ar ro w ly c irc u m sc rib ed
. W e c on sid er on ly w h et h er th e d ist ric t c ou rtab u se d its d isc re tio n in d en yin g inj u n c tiv e re lief. Id. at90 6. The dis tr i ct c ourthel d that Gar ci a co uld notsho w thathi s a gr eem ent had be en nonre new ed beca use the J une 5 l ett erdi d not s peci fi cal l y s ay that i t was a ter m i nati on o r nonre new al
. W e a gr ee. Although the l ett erm ade cl earthati t di d not co nsti tute a r enewal ofthe agr eem ent, i t di d not a f fi rm ati vel y s tat e that the ag re em ent woul d not be r enewed o r t h a ti twa s t e r mi n a t e d
. G a r c i a a r g u e s th a tth e n o r ma l c o u r s e o fd e a l i n gb e t we e n th e t wo p arties m akes clear th at th e letter si gn ified th at his lease w ou ld n ot be rene w ed
. Every ot h er th re e-y ea r re n ew al w as init iat ed in M ay be for e t h e a gr ee m en t w as to en d an d B P d id no t se nd a r en ewa l thi s y ea r . Buti t i s r ea so nabl e th atBP woul d de cl i ne t o f o l l o w the n or m al c ou rs e o f d ea lin g w ith G ar c ia w h ile it is n eg ot iat in g a sa le of t h e p ro p er ty . G ar c ia al so ar gues that the J une 5 l ett erco m pli ed w i th al l o fthe re quir em ents f orthe 90- day ad va n c e n ot ice of n on re n ew al a s p ro vid ed in t h e P M P A
. Sp ec ifica lly, h e s ay s, it w as in wri ting, was s en t by c er ti fi ed m ai l, c o nt ai ne d a s ta te m en t o fi nt en ti o n o fno nr en ewa l a nd t he r e a s o ns , a nd the da t e o n whi c h t he n o nr e ne wa l t a k e s p l a c e . T he l e t t e r a l s o i nc l ud e d a co py o fthe r ev i se d s um m ar y o fTi tl e I o fthe PMPA , whi chi s o nl y r equi r ed when a fra n c h ise e is be in g t er m in at ed or n on re n ew ed
. See 15 U
. S. C. § 2 804( c) ( 3) ( C). W e a gr ee w i th the di str i ct c ourtthatthe l ett erco ntai ned nei thera sta tem ent o fi ntenti on o fnonr enewal or th e re as on s t h er efo re , an d so d oe s n ot co m p ly w ith all of th e re q u ire m en ts for n on re n ew al. BP and B& R Oilpoi nt o ut thatB& R Oil, as the new fra nchis or, has the r i ght t o ter m i nate ornonr enew G ar ci a' s a gr eem ent pr ovi ded thati t co m pli es w i th the r equi re m ents of t h e P M P A
. A s a p ra c tic al m at te r, th is m ea n s t h at B & RO il ha s t o giv e 9 0 d ay s n ot ice , see 15 U .S.C . § 28 04 , an d te rm in at e p u rs u an t t o on e o f th e g ro u n d s e n u m er at ed in t h e A c t, see §§ 2802 ( b) ( 2)
- ( 3) o r 2803 ( c)
. Defendants not e that i fGarci a t rul y di d not know the sal e had tak en pl ace f our days be f or e he fi l ed hi s m oti on, i t s how s that the tr ansfero fo w ners hi p has gone sm oo thl y. In other w or ds, Garci a’ s r i ghts und erthe f ra nchis e a gr eem ent hav e

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conti nued thr ough the sa l e a nd were not ter m i nated. Beca use no te rm i nati on o r nonre new alhas happ ened ye t a nd B& R Oili s bo und by the f ra nchis e a gr eem ent, i nj uncti ve re lief is n ot n ec es sa ry atth is t im e. Garci a' s r ealco m pla i nt se em s t o be that defendants ev aded the r equi re m ent that th ey offe r h im th e rig h t o f first refu sa l, see1 5 U. S
. C. § 2 80 2(b) ( 2) ( E) ( i i i ) , b y e xt en di ngthe l ea se f o r o ne month wi th o uts pec i fi ca l l y s ta tingtha t th e l ea se wi l l no t be r en ewe d. But Garci a a dm i ts i n hi s a f fi davi t that B& R Oilo f f er ed hi m the ri ght o ffi rs t r efusalto purchase the pr oper ty f or$1
. 7 m i l l i on. Gar ci a a rg ues that B& R Oilhas agr eed to se l l the proper ty to a th i r d p a r t y f o r $ 1
. 3 mi l l i o n, a n d w i l l n o ta l l o w h i m t o p u r c h a s e th e p r o p e r t y f o r th e s a me p ric e. B u t n ow h er e d oe s G ar c ia off er an y e vid en c e t h at a p u rc h as e a gr ee m en t fo r $1 .3 m illion ex ist s. (T h e o ffer to B u c h an an E n er gy for $ 1.3 m illion in F eb ru ar y d id n ot res u lt in a sa l e. ) In the i r r es po ns e, de f en dan ts s aytha t a th i r d pa r tyha s o f f er ed to pur ch as e th e p ro p er ty for $ 1.7m illion from B & RO il, su b j ec t t o G ar c ia’s righ t o f first refu sa l. B & RO il h as n o ob liga tio n to offe r th e p ro p er ty to G ar c ia for les s t h an th at am ou n t. Gar ci a ca nno t sh o w tha t th e di st r i ctc o ur t ab us ed i ts di sc r et i o n i n h o l di ngtha t no ter m i nati on o r nonre new alhas tak en pl ace. F urther, he ha s no t s how n that hi s r i ghts have been aff ecte d by BP’s sa l e o fthe proper ty to B& R Oil
. B& R Oilhas ass um ed BP’s ri ghts an d res p on sib ilitie s u n d er th e fra n c h ise ag re em en t a n d m u st co m p ly w ith th e P M P A ; un til i t t er m i nates o r nonre new s the ag re em ent, Garci a does nothave a cl ai m . F orthes e r eas ons, the di str i ct c ourt ’ s o rderdenyi ng the r equest f orpre l i m i naryi nj uncti on i s AF F I RME D an d Garci a’ s r equest f oran i nj uncti on pending re sol uti on o fhi s a pp eali s D ENI ED
.