Opinion ID: 764207
Heading Depth: 2
Heading Rank: 1

Heading: The Timing of The Withdrawal

Text: 27 The Simmons Group and the Raether Group claim that Union Oil violated the PMPA because it decided on withdrawal before franchises were renewed with group members and because relevant circumstances did not change after those franchises were renewed. See 15 U.S.C. § 2802(b)(2)(E)(i). We disagree. 28 In order to meet the terms of 15 U.S.C. § 2802(b)(2)(E)(i)(I), Union Oil's decision to withdraw from the market must have been made after the date that the franchisees' franchises were entered into or renewed. The latest franchise renewal was October 1, 1996. The district court ruled that the withdrawal determination had been made on December 2, 1996, when Unocal's board approved a resolution authorizing Union Oil to enter into an agreement with Tosco. We agree. Thus, Union Oil met the requirements of § 2802(b)(2)(E)(i)(I). 29 Generally, the approval of the franchisor's Board of Directors constitutes the legally effective date of a decision for PMPA purposes. See May-Som Gulf, 869 F.2d at 919, 927 (holding that date franchisor's Board of Directors conditionally accepted buyer's bid was date market withdrawal decision was made); Anderson v. Chevron Corp., 933 F.Supp. 52, 59 (D.D.C.1996) (holding that the day when the Board of Directors of defendant Chevron [the outgoing franchisor] tentatively approved the proposed exchange of assets with Exxon [the incoming franchisor], and instructed [its officers] to negotiate [and] execute a final exchange agreement was date of market withdrawal decision). As the district court noted, the logic of these cases is compelling. Weighing options is not the same as making a decision, and, absent evidence to the contrary, a corporation is not bound until its board acts. As the franchisees' own references to the evidence in the record indicate, years of considerations, negotiations, and false starts had preceded the eventual deal with Tosco, and this, contrary to the franchisees' reasoning, suggests that courts should be wary about finding a fixed determination to withdraw at any point prior to the board's authoritative decision. Because none of the franchises was entered into or renewed after the decision to withdraw was made, the PMPA was not violated in this respect. 30 By the same token, the relevant facts and circumstances clearly changed after October 1, 1996, because only after that was a sale to Tosco negotiated and an even semisolid decision to withdraw reached. Therefore, 15 U.S.C. § 2802(b)(2)(E)(i)(II) was not violated either. See May-Som Gulf, 869 F.2d at 926 (the presence of a willing and acceptable buyer is a fundamental change in market conditions). 31