Opinion ID: 203251
Heading Depth: 1
Heading Rank: 3

Heading: The PMPA

Text: Congress enacted Title I of the PMPA to remedy the disparity in bargaining power between franchisors and franchisees. S.Rep. No. 95-731, 95th Cong., 2d Sess. 18, 1978 U.S.Code Cong. & Admin.News 873, 876; see also Four Corners Serv. Station v. Mobil Oil Corp., 51 F.3d 306, 310 (1st Cir.1995). Because franchisees claimed that this unequal power was often wielded through arbitrary or discriminatory termination or nonrenewal, or threats of termination or nonrenewal, the PMPA aimed to remove this potent weapon from the franchisors' arsenal. S.Rep. No. 95-731, at 17, 1978 U.S.Code Cong. & Admin.News at 876 (Numerous allegations have been made before Congressional committees investigating petroleum marketing problems that terminations and non-renewals, or threats of termination or non-renewal, have been used by franchisors to compel franchisees to comply with marketing policies of the franchisor.); id. at 18, 1978 U.S.Code Cong. & Admin.News at 876 ([T]ermination of franchise agreements during the term as a remedy for contract violations has been repeatedly utilized.). The PMPA attempts to level the playing field by restricting the grounds upon which a franchisor can assert a unilateral termination or nonrenewal of a franchise. Id. [2] The PMPA makes a distinction between a franchise and the franchise relationship. The franchise is a set of definite agreements for 1) lease of the premises, 2) the right to purchase gasoline for resale, and 3) the right to use the franchisor's trademark. 15 U.S.C. § 2801(1). Franchise relationship refers to the respective obligations of the franchisor and franchisee created by a franchise. Id. § 2801(2). The legislative history of the PMPA makes clear that franchise and franchise relationship were distinguished to drive home the fact that the franchise relationship survives the expiration of the agreements underlying the franchise. See S.Rep. No. 95-731, 95th Cong., 2d Sess. 30, 1978 U.S.Code Cong. & Admin.News at 888 (The term `franchise relationship' is utilized to avoid any contention that because the `franchise' does not exist there is nothing to renew.). The structure and history of the PMPA emphasize Congress's view that the franchisees have a reasonable expectation that the franchises would be renewed and that the relationships would continue. Accordingly, the PMPA forbids termination of a franchise or nonrenewal of a franchise relationship except under enumerated circumstances and with proper notice. See 15 U.S.C § 2802(a) (nonrenewals and terminations generally prohibited); id. §§ 2802(b)(2)-(3) (grounds for termination and non-renewal); id. § 2804 (notice requirements). The PMPA provides a cause of action to franchisees who suffer termination or nonrenewal in violation of the relevant sections. Id. § 2805(a). As long as the action is brought within one year of the termination or nonrenewal complained of, id. § 2805(a)(1), the franchisee may seek preliminary injunctive relief, id. § 2805(b)(2), damages, id. § 2805(d), and such equitable relief as the court determines is necessary, id. § 2805(b)(1). The PMPA mandates that preliminary relief shall be granted if the plaintiff shows 1) termination or nonrenewal and 2) sufficiently serious questions going to the merits that are a fair ground for litigation, and the court determines 3) that the balance of hardships tips in favor of granting the injunction. Id. § 2805(b)(2). In all private civil actions for termination or nonrenewal, it is the franchisee's burden to show termination or lack of renewal. Id. § 2805(c).