Opinion ID: 200019
Heading Depth: 1
Heading Rank: 3

Heading: Subject Matter Jurisdiction Under the PMPA

Text: 12 At the outset, Sun Oil challenges the district court's conclusion that it possessed subject matter jurisdiction over this case. The district court concluded that Congress contemplated protection for distributors like Seahorse in contractual relationships with refiners like Sun Oil. We review that determination de novo, Bull HN Info. Sys., Inc. v. Hutson, 229 F.3d 321, 328 (1st Cir.2000), and conclude that subject matter jurisdiction is present. 13 The PMPA is a remedial statute, and as such, merits a relatively expansive construction, C.K. Smith & Co. v. Motiva Enters., 269 F.3d 70, 76 (1st Cir.2001). We are mindful, however, that the statute is in derogation of common law rights, and therefore should not be interpreted to reach beyond its original language and purpose. Id. (quoting Chestnut Hill Gulf, Inc. v. Cumberland Farms, Inc., 940 F.2d 744, 750 (1st Cir.1991)). 14 With these principles in mind, we turn to the text of the statute, as the starting point for interpretation of a statute is the language of the statute itself. Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 835, 110 S.Ct. 1570, 108 L.Ed.2d 842 (1990) (internal quotation marks omitted). We give effect to the statute's plain meaning unless it would produce an absurd result or one manifestly at odds with the statute's intended effect, Parisi by Cooney v. Chater, 69 F.3d 614, 617 (1st Cir.1995); see also United States v. Puerto Rico, 287 F.3d 212, 217 (1st Cir.2002); Arnold v. United Parcel Serv., 136 F.3d 854, 857-58 (1st Cir.1998), and we interpret the plain language in light of the purposes Congress sought to serve. See Arnold, 136 F.3d at 858 (citing Dickerson v. New Banner Inst., Inc., 460 U.S. 103, 118, 103 S.Ct. 986, 74 L.Ed.2d 845 (1983)). Under the PMPA, 15 [t]he term franchise means any contract — 16 (i) between a refiner and a distributor, 17 (ii) between a refiner and a retailer, 18 (iii) between a distributor and another distributor, or 19 (iv) between a distributor and a retailer, under which a refiner or distributor (as the case may be) authorizes or permits a retailer or distributor to use, in connection with the sale, consignment, or distribution of motor fuel, a trademark which is owned or controlled by such refiner or by a refiner which supplies motor fuel to the distributor which authorizes or permits such use. 20 15 U.S.C. § 2801(1) (emphasis added). 21 Motor fuel is defined as gasoline and diesel fuel of a type distributed for use as a fuel in self-propelled vehicles designed primarily for use on public streets, roads and highways. 15 U.S.C. § 2801(12) (emphasis added). Building on those definitions, the PMPA next explains the prohibitions on motor fuel franchisors, with exceptions not relevant here: 22 [N]o franchisor engaged in the sale, consignment, or distribution of motor fuel in commerce may — 23 (1) terminate any franchise ... prior to the conclusion of the term, or the expiration date, stated in the franchise; or 24 (2) fail to renew any franchise relationship... [without following the PMPA's requirements]. 25 15 U.S.C. § 2802(a). 26 The parties contest whether Seahorse is engaged in the distribution of motor fuel, as that phrase is contemplated under the PMPA. Sun Oil contends that the Act was meant to apply only to automotive filling stations or fuel actually used in motor vehicles and that applying the PMPA to a marine supplies distributor would impermissibly broaden its reach. But we must read the statute as written. The record reflects that Sun Oil distributed to Seahorse at least 40,000 barrels of diesel fuel monthly. Under the PMPA's definition of motor fuel, the fuel at issue need only be of a type for use by vehicles traversing land. In a sworn statement, Sun Oil's treasurer defined the diesel fuel Sun Oil distributed to Seahorse as that which may be used in ships and vessels and by owners of chemical plants that have boilers, and also in trucks and vehicles  (emphasis added). Because the diesel fuel could have been used for land vehicles, the plain language of the statute covers the relationship at issue here. 5 Sun Oil effectively reads of a type out of the statute, but we are not at liberty to do that. We therefore refuse to legislate a requirement that franchisees prove that the fuel was actually used in a self-propelled land vehicle, instead of a boat, a lawnmower, or any other machine that uses motor fuel to run. 27 Sun Oil rests its contrary argument on two grounds. The first is that the district court, in defining motor fuel, included that used by boats as well as trucks, and equated the seas with public streets, roads and highways. In so doing, Sun Oil argues, the court improperly relied on the statute's broad remedial purpose and expanded the reach of the statute. As the preceding text indicates, our decision does not rest on this interpretation. 28 Sun Oil's second contention is that the PMPA's legislative history indicates that the Act was designed to govern relationships involving automobiles, not ships. It refers to Senate Report No. 95-731, which accompanied the legislation resulting in the PMPA and the introductory language describing it, as providing for 29 the protection of franchised distributors and retailers of motor fuel and to encourage conservation of automotive gasoline and competition in the marketing of such gasoline by requiring that information regarding the octane rating of automotive gasoline be disclosed to consumers.... 30 S.Rep. No. 95-731, at 1, reprinted in 1978 U.S.C.C.A.N. 873, 873 (1978) (hereinafter S.Rep. No. 95-731). The protection of franchised distributors was the purpose of Title I, which established minimum Federal standards governing the termination... of franchise relationships for the sale of motor fuel.... The requirements regarding gasoline octane ratings were the subject of Title II. This latter Title II reference to automotive gasoline, directed to information disclosure, is not comfortably transferred to Title I to effect a narrowing of the scope of franchise relationships. It may well be that the intervention of Congress was triggered by automotive gasoline franchise relationships. But does the historical origin of legislation trump its unambiguous language describing a broader reach? We think not unless such a literal construction would do violence to the basic policy underlying the statute. 31 The policy behind Title I was identified in Veracka v. Shell Oil Co., 655 F.2d 445, 448 (1st Cir.1981), when then Judge Breyer wrote: The legislative history of the Marketing Act shows that its basic effort to prevent franchise termination reflects a recognition of the disparity of bargaining power between franchisor and franchisee and an effort to prevent coercive or unfair franchisor practice. 32 The Supreme Court has cautioned that reference to legislative history is inappropriate when the text of the statute is unambiguous. Dep't of Hous. & Urban Dev. v. Rucker, ___ U.S. ___, 122 S.Ct. 1230, 1234, 152 L.Ed.2d 258 (2002). Indeed, [w]hen a statute's text is encompassing, clear on its face, and productive of a plausible result, it is unnecessary to search for a different, contradictory meaning in the legislative record. Rhode Island v. Narragansett Indian Tribe, 19 F.3d 685, 698 (1st Cir.1994). 33 Even assuming that the statute could be considered ambiguous, we find no persuasive contrary signal in the legislative history. Of the PMPA's three titles, only Title I is germane here because it is the only one that governs termination of franchises. Its legislative history establishes that Congress passed the statute to remedy the disparity of bargaining power between franchisors and franchisees, S.Rep. No. 95-731, at 17, reprinted in 1978 U.S.C.C.A.N. at 876, by establish[ing] protection for franchisees [of motor fuel] from arbitrary or discriminatory termination or nonrenewal of their franchises. Id. at 15, reprinted in 1978 U.S.C.C.A.N. at 874. 6 The relationship of Seahorse and Sun Oil comfortably fits within that statement of purpose. 34 Title II, by contrast, is obviously targeted at automotive gasoline, as opposed to the broader product, motor fuel. Title II requires the testing, certification, and posting of octane ratings for automotive fuel to ensure consumers' ability to compare different types of gasoline. Title II's legislative history is replete with references to cars and everyday consumers: automotive gasoline, gasoline, gasoline retailer, motorists, and motor vehicles. Id. at §§ 19-21, 43-45. The phrase motor fuel is not used at all. That Title II repeatedly uses those terms, while Title I continually refers solely to motor fuel, suggests that Congress sought broad protection for franchisees of motor fuel. 7 35 In sum, we conclude that the relationship between Seahorse and Sun Oil fits within the plain language of the statute and the legislative history only buttresses that conclusion. It is up to Congress to amend the PMPA's definitional section, and the courts may not usurp that authority.