Source: https://law.justia.com/cases/federal/appellate-courts/F2/870/1495/311958/
Timestamp: 2019-08-24 16:22:21
Document Index: 623896970

Matched Legal Cases: ['§ 2801', '§ 2801', '§ 2805', '§ 1291', '§ 2802', '§ 2802', '§ 2802', '§ 651', '§ 2802']

Retsieg Corp., Plaintiff-appellant, v. Arco Petroleum Products Company, and Does I Through X,inclusive, Defendants-appellees, 870 F.2d 1495 (9th Cir. 1989) :: Justia
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Retsieg Corp., Plaintiff-appellant, v. Arco Petroleum Products Company, and Does I Through X,inclusive, Defendants-appellees, 870 F.2d 1495 (9th Cir. 1989)
U.S. Court of Appeals for the Ninth Circuit - 870 F.2d 1495 (9th Cir. 1989)
Argued and Submitted Jan. 10, 1989. Decided March 28, 1989
Retsieg Corporation appeals the district court's order of summary judgment in favor of Atlantic Richfield Company ("ARCO"), in Retsieg's action under 15 U.S.C. §§ 2801-41 (1982) challenging ARCO's termination of Retsieg's gasoline franchise for selling non-ARCO gasoline in violation of the franchise agreement. We reverse and remand.
* In reviewing an order of summary judgment we view the facts in the light most favorable to the nonmoving party, Retsieg. See United Steelworkers v. Phelps Dodge Corp., 865 F.2d 1539, 1543 (9th Cir. 1989) (en banc). In June 1985, Retsieg entered into franchise agreements with ARCO under which Retsieg operated an ARCO am/pm Mini Market in Monterey, California. Retsieg was authorized to use ARCO trademarks in connection with the sale of "ARCO branded motor fuels." ARCO, in its response to interrogatories, defined "ARCO branded gas" as " [g]asoline which contains the ARCO additive R-585." This was not, it seems, a complete answer; ARCO apparently requires specification ranges, for various types of gasoline, between .05 and .12 percent of R-585 by volume, but the record on this material question of fact is not conclusive.
Retsieg sued in the district court claiming that ARCO's termination violated the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. §§ 2801-41 (1982). On September 22, 1987, the district court granted ARCO's motion for summary judgment on the grounds that no genuine issue of material fact remained concerning Retsieg's sale of misbranded gasoline. Retsieg timely appeals. Fed. R. App. P. 4(a) (1). We have jurisdiction over this final judgment. 15 U.S.C. § 2805(a); 28 U.S.C. § 1291. We review an order of summary judgment de novo, to ascertain whether any genuine issue of material fact remains to be tried. United Steelworkers, 865 F.2d at 1540.
ARCO's defense of its termination under the PMPA depends upon 15 U.S.C. § 2802. This section defines "willful adulteration, mislabeling or misbranding of motor fuels or other trademark violations by the franchisee" as an event reasonably allowing the franchisor to terminate. 15 U.S.C. § 2802(b) (2) (C); (c) (10). The meaning of "willful" in this section of the PMPA is a question of first impression in this or any other circuit.
The district court analyzed the case as follows: 1) It was "undisputed that [Retsieg] purchased 100,000 gallons of gas from Caljet, none of which was ARCO branded"; and 2) Gilderhus v. Amoco Oil Co., 1980-81 Trade Cas. (CCH) p 63,648, 77,495, 1980 WL 1956 (D. Minn. July 30, 1980),2 defined "willful" as used in 15 U.S.C. § 2802(c) (10) as "a conscious, intentional, deliberate and voluntary act. Proof of willfulness under this provision does not require proof of bad motive, nor does evidence of good faith negate the willfulness of an act covered by said provision."
We must define "willful misbranding" and apply that definition to the facts before the district court. PMPA precedent from our circuit and other circuits is not particularly helpful. In Wisser Co. v. Mobil Oil Corp., the Second Circuit found that the sale of non-Mobil gasoline by a franchisee was grounds for termination. 730 F.2d 54, 56-57 (2d Cir. 1984). The issue of willfulness did not directly arise, however, because the franchisee admitted to selling non-Mobil gasoline, which apparently was defined as gasoline not sold by Mobil. The Seventh Circuit also proceeded from the basic assumption that "Mobil gasoline" is only that gasoline actually sold by Mobil directly to the franchisee. Lippo v. Mobil Oil Corp., 776 F.2d 706, 708, 710-11 (7th Cir. 1985). Most recently, we also took it as a given that fuel purchased from a dealer other than Chevron was not Chevron fuel. Chevron U.S.A., Inc. v. Finn, 851 F.2d 1227, 1230 (9th Cir. 1988) (per curiam), cert. denied, --- U.S. ----, 109 S. Ct. 1315, 103 L. Ed. 2d 584 (1989). In these cases, the actual status of the gasoline as "misbranded" was not materially in dispute. The distinction here, of course, is that ARCO admits that "ARCO-branded gasoline" may in fact be sold by dealers other than ARCO itself.
Several district courts have more directly considered "willfulness." L.C. Williams Oil Co. v. Exxon Corp., 627 F. Supp. 864, 870 (M.D.N.C. 1985) (franchisee's "good faith" irrelevant when he "has admitted to consciously and deliberately selling non-Exxon gas...."); H.R.H. Service Station, Inc. v. Exxon Co., U.S.A., 591 F. Supp. 25, 26 (S.D.N.Y. 1983) (franchisee allowed by contract to sell gasoline not purchased from Exxon if pumps were "deidentified"; in light of routine purchases of non-Exxon gasoline, and franchisee's knowledge of deidentification requirement, franchisee's argument that single sale relied upon by franchisor was "inadvertent" failed to create material issue as to willfulness); Haynes v. Exxon Co., U.S.A., 512 F. Supp. 543, 544 (E.D. Tenn. 1981) (no issue of material fact as to willfulness when sale of non-Exxon fuel under Exxon brand name was "undisputed"). These cases all relied on Gilderhus, 1980-81 Trade Cas. at p 63,648. Chief Judge Devitt's thoughtful opinion in Gilderhus rejected a suggested definition of willful, based upon criminal law, as "specific intent or bad motive". Id. Rather, in light of the intent of Congress in this civil statute to establish a rule of "reasonableness" for franchise terminations, the relevant standard was held to be that of a conscious and deliberate act, without any burden of proof as to motive. Id.
None of these district court cases, then, addressed the instant situation. Rather than attempting to justify an admittedly voluntary misbranding by showing good faith (such as lack of knowledge that acts of misbranding violated the franchise agreement, Haynes, 512 F. Supp. at 544), Retsieg claims that it did not intend to misbrand at all.
Gilderhus cited with approval our definition of "willful" in the context of the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651-78. Gilderhus, 1980-81 Trade Cas. at 77,494-95 (citing National Steel & Shipbuilding Co. v. Occupational Safety and Health Review Comm'n, 607 F.2d 311 (9th Cir. 1979)). National Steel defined " 'a willful violation as one involving voluntary action, done either with an intentional disregard of, or plain indifference to, the requirements of the statute.' " 607 F.2d at 314 (quoting Georgia Elec. Co. v. Marshall, 595 F.2d 309, 319 (5th Cir. 1979)).
ARCO's internal memorandum regarding the testing concluded that the unleaded and super unleaded samples "appear to be other than ARCO product [;] resampling is advised."
Not to be confused with an earlier ruling reported in the Federal Supplement. Gilderhus v. Amoco Oil Co., 470 F. Supp. 1302 (D. Minn. 1979)
We do not consider whether acts of misbranding occurred after termination, because, under the PMPA, termination for misbranding must be based upon actual or constructive knowledge of an offense taking place not more than 120 days prior to notification of termination. 15 U.S.C. § 2802(b) (2) (C)