N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT LIGHT PETR OLEUM , INC ., Plaintiff, a nd EFR AM DORI, an Individual; e t a l., Plaintiffs - Appe lla nts, v. EXXONM OB IL C ORPOR ATION, a

Ne w Je rse y c orporation, Errone ously Sue d As Exxon M obil C orporation a nd C IR C LE K STORE S INC ., a

Te xa s c orporation, De fe nda

nts - Appe lle e s. No. 13-56909 D.C . No. 2:12-c v-04689-PA-VB K M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia Pe rc y Ande rson, Distric t Judge , Pre siding A rgue d a nd Subm itte d De c e m

be r 11, 2015 Pa sa de n a , C a l ifornia 

# FIL ED D EC 24 2015 M OLLY C. DW Y ER, CLERK U . S . CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3.B e fore : GOULD a nd B ER ZON, C irc uit Judge s a

nd ZOUHAR

Y, ** Distric t Judge . 1. Pla intiffs a

re franc hise e s of ExxonM obil (“ Exxon” ) who ope ra te re ta il se rvic e sta

t ions le a se d from

Exxon. W

he n a franc hisor suc h a s Exxon se e k s to se ll a se rvic e sta

tion in whic h it owns a

fe e inte re st, C a lifornia B usine ss & Profe ssions C ode § 20999.25(a) re quire s the franc hisor to m ake a bona fide offe r to se ll to the franc hise e be fore se lling to a nothe r party . Pla intiffs, to whom Exxon m a d e offe rs of sa l e , brought this dive

rsity suit, c onte nding tha

t Exxon’ s offe rs we re not bona fide within the

m e aning of Se c tion 20999.25(a ). The distric t

c o urt gra nte d sum m ary judgm e nt to De fe nda

n ts, c onc luding tha

t Exxon’ s offe rs we re obje c tive ly re a s ona ble and the re fore bona

fide . W e a ffirm . 2. Exxon’ s offe rs of sa l e c onta ine d c ove na nts a nd de e d re stric t ions tha

t, am ong othe r things, lim

ite d the prope rtie s’ c om

m e rc ia l use s a

nd re quire d

Pla intiffs to e n te r into a

fifte e n-y e ar supply

a gre e m e nt with c o nve n ie nc e store c ha in C irc le K. Pla intiffs c o n te nd tha

t Exxon’ s offe rs did not c onve y its e n tire “ inte re st” in the se rvic e sta

t ion prope rtie s, in viola

tion of Se c tion 20999.25(a ). B ut a C a l ifornia a ppe lla te c a se inte rpre t ing Se c tion 20999.25(a ) ha s he ld tha

t the sta tute e sta blishe s only “ m i nim a l sta

nda rds” to limit gove rnm e nta l intrusion into a franc hisor’ s

** The Honora

ble Ja c k Zouha

ry , Distric t Judge for the U.S. Distric t C ourt for the Northe rn Distric t of Ohio, sitting by de s igna tion. 2prope rty

rights. Forty -N

ine r Truc k

Plaza, Inc . v . Union Oil C o. , 58 C a l. App. 4th 1261, 1274 (1997). A fra nc hisor’ s offe r m

ust c onve y

its inte re st in the“ m arke ting pre m ise s,” m e a

ning pre m i se s tha

t a re “ e m ploy e d by the franc hise e in c onne c tion with thesa le , c onsignm e nt, or distribution of fue l.” Id. at 1282 (quoting C a l. B us. & Prof. C ode § 20999(h)). As suc h, “ a bona fide offe r inc lude s the sa le of pum ps, dispe nse rs, stora g e ta

nks, piping a

nd othe r e quipm e nt ne c e ssa ry for the c ontinue d ope ra t ion of a

se rvic e sta

tion.” Id. This vie w of the “ inte re st” tha t a franc hisor’ s offe r m ust c o nve y

is c o nsiste nt with c ourts’ broa de r re a ding of thepurpose of Se c tion 20999.25(a

) a s “ a llow[ing] franc hise e s a re a sona ble opportunity

to c ontinueope ra ting the i r fa c ilitie s if the y e x e rc ise the ir right to buy .” Id. ; se e also Ellis v . Mobil Oil , 969 F.2d 784, 787 (9th C ir. 1992) (sta ting the purpose of a

n ana logous fe de ra l sta

t ute , the Pe trole um

M arke ting Pra c tic e s Ac t). Exxon’ s offe rs c onve y suffic ie nt inte re st in thepre m ise s to sa tisfy Se c tion 20999.25(a

). 3. Pla intiffs c la im

tha t Exxon’ s offe rs we re not bona fide , a s Se c tion 20999.25(a) re q

uire s, be c a

use som e of the ir te rm s we re obje c tive ly unre a sona

ble . For our re vie w of whe the r Se c t ion 20999.25(a ) ha s be e n sa

tisfie d, it is not ne c e ssa ry to c onduc t a

te rm -by -te rm

ana ly sis to de te rm ine whe t he r an offe r is re a s ona ble . W e hold tha

t the non-pric e te rm s in Exxon’ s offe rs, ta k e n a s a whole , we re c om m e rc ia l ly re a sona ble , e spe c ia l ly

c onside ring tha

t thirty -six fra

nc h ise e s 3have a l re a dy a c c e p t e d Exxon’ s offe rs of sa le . Exxon’ s offe rs satisfie d Se c tion 20999.25(a), whic h e sta

blishe s only

“ m inim a l sta

nda rds,” so a s to limit gove rnm e nta l intrusion into a franc hisor’ s prope rty rights. Forty -N ine r , 58 C a l. App. 4th a

t 1274. AFFIRM ED.

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