Opinion ID: 1467769
Heading Depth: 2
Heading Rank: 2

Heading: Davis' RSSA Defenses

Text: Davis also argues that Gulf's actions violated two provisions of the District of Columbia RSSA. Gulf's response to this argument is that, to the extent the RSSA in any way purports to interfere with Gulf's nonrenewal of the franchise and repossession of the premises, RSSA (enacted one and one-half years before the PMPA) is preempted by PMPA, 15 U.S.C. § 2806(a) (1982). Although we do not find the PMPA preemption analysis to be as facile as Gulf suggests, we nonetheless conclude that RSSA, as a matter of law, does not provide Davis with a cognizable defense to this action.
In determining the extent to which PMPA preempts RSSA, our focus is on Congress' intent. Pre-emption may be either express or implied, and `is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose.' Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 103 S.Ct. 2890, 2899, 77 L.Ed.2d 490 (1983) (citations omitted). Thus, we must consider the preemptive effect of both the explicit and implicit manifestations of congressional intent reflected in PMPA. See Jones v. Rath Packing Co., 430 U.S. 519, 540-41, 97 S.Ct. 1305, 1317, 51 L.Ed.2d 604 (1977). Preemption will be inferred either when Congress has implicitly indicated an intent to occupy an entire field of regulation, in which case all local law in the field will be preempted, e.g., Fidelity Federal Savings & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982), or when local law actually conflicts with federal law, in which case the local law will be preempted to the extent it `stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' Jones, 430 U.S. at 526, 97 S.Ct. at 1310 (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941)). PMPA contains a provision which explicitly addresses the Act's preemptive effect. To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty applicable to any violation thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of notification with respect thereto) of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of this subchapter. 15 U.S.C. § 2806(a) (1982). [6] Looking first at this statutory language, we note the limited nature of the preemption which this section prescribes. Preemption is required only to the extent that PMPA applies to the termination, ... the nonrenewal, ... or the furnishing of notification with respect to these two practices. Similarly, PMPA preempts local laws only with respect to termination, ... nonrenewal,... or the furnishing of notification with respect thereto. [7] We read this language to be an explicit statement of Congress' intent to occupy the entire field of franchise termination and nonrenewal, without displacing local law which governs other matters related to service station franchises. Accordingly, § 2806(a)'s scope is limited to preempt[ing] state law in the subject areas in which the federal legislation deals. S.REP. No. 731, supra, at 16, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 874. To the extent that the provisions of [PMPA] do not apply to an aspect of the franchise relationship, State laws dealing with such aspects of the relationship are not preempted.... The preemption provisions of the legislation are limited to provisions of State law dealing with termination or nonrenewal of franchise relationships. Id. at 42, U.S. CODE CONG. & ADMIN.NEWS 1978, p. 900. It follows that PMPA § 2806(a) preempts only those provisions of RSSA which address termination, nonrenewal, or the notice required with respect to these practices. Any RSSA provision that regulates some other aspect of a franchise relationship is preemptedunder the doctrine of implied preemptiononly insofar as it stands as an obstacle to the accomplishment and execution of the full purposes and objectives, Jones, 430 U.S. at 540-41, 97 S.Ct. at 1317, of PMPA. To the extent that such a provision does not interfere with PMPA's intended purpose of establishing a uniform set of rules governing the grounds for termination and non-renewal of motor fuel marketing franchises and the notice which franchisors must provide franchisees, S.REP. No. 731, supra, at 19, U.S.CODE CONG. & ADMIN.NEWS 1978, p. 877, it will not be preempted, even if it has some incidental effect on a franchisor's obligations in cancelling a franchise. [8]
We next consider the RSSA provisions on which Davis relies. He first argued to the trial court that Gulf's nonrenewal notice failed to meet the standards set by D.C.Code § 10-223(b)(1), with the result that this violation requires a renewal of the franchise agreement pursuant to D.C.Code § 10-223(b)(3). [9] More specifically, § 10-223(b)(1) sets forth a 90-day notice requirement governing a franchisor's attempt to terminate, cancel, or fail to renew a franchise. Section 10-223(b)(3) specifies the remedy for a violation of this notice requirement: a one-year renewal. These provisions of RSSA are precisely the types of local law which PMPA § 2806(a) is designed to address. We hold that insofar as §§ 10-223(b)(1) and (b)(3) are not the same as the applicable provision[s] of PMPA, 15 U.S.C. § 2806(a), those sections of RSSA are preempted. The same reasoning that led us to reject Davis' asserted defenses under PMPA accordingly compels us to reject his arguments under RSSA §§ 10-223(b)(1) and (b)(3).
The second RSSA provision on which Davis relies is D.C.Code § 10-221(a)(10) (1981) which provides, simply, that no franchise agreement shall [b]e for a term of less than 1 year. Although, by establishing a one-year minimum lease term, this provision may have an effect on a franchisor's ability to use the 90-day nonrenewal provisions of PMPA, it does not attempt to regulate directly any aspect of franchise terminations or nonrenewals. Accordingly, PMPA § 2806(a) does not automatically preempt RSSA § 10-221(a)(10). Accord Lasko, 547 F.Supp. at 216-18 (Connecticut statute's three-year minimum lease term not preempted). [10] Ordinarily, therefore, absent an application of § 10-221(a)(10) that obstructs a purpose of PMPA, retail service station franchise agreements in this jurisdiction may not be for less than one year's duration. The question, therefore, is whether RSSA § 10-221(a)(10)unlike RSSA §§ 10-223(b)(1) and (b)(3)survives PMPA § 2806(a) so as to provide a defense to Gulf's action for possession. Davis asserts that the ten-week lease extension was unlawful under § 10-221(a)(10) and thus should be construed as a one-year lease extension under one of two theories: (1) reformation of its terms by reference to the § 10-221(a)(10) one-year minimum, or (2) invalidation of the extension and thus conversion of the relationship to a tenancy at sufferance which, because of § 10-221(a)(10), becomes year-to-year instead of month-to-month. [11] If we were to accept either argument, Davis would be deemed to have a lease running from January 1, 1983 to December 31, 1983, and thus have a valid defense to Gulf's action for possession. If we were to read § 10-221(a)(10) to invalidate every retail service station lease extension that is shorter than one year, but see Ferriola, 496 F.Supp. at 162 (interpreting Pennsylvania's one-year minimum lease provision not to prohibit temporary extensions during renewal negotiations), we could not permit Davis to prevail here, even on the assumption that Gulf fraudulently induced Davis to settle for an unlawful, short-term extension. The appropriate remedy would be either to rescind the lease extension at the franchisee's instance and provide recovery for restitution and incidental losses, or to permit the franchisee to enforce the extension and recover for damages incurred as a result of the franchisor's conduct. The lease extension could not, however, be specifically enforced as a one-year agreement on either a reformation or modified tenancy-at-sufferance theory. [12] Thus, although § 10-221(a)(10) may have provided Davis with a basis for invalidating the lease extension or for claiming damages against Gulf, it does not support his argument that the lease extension should have been construed against its plain language to extend the franchise agreement until December 31, 1983. Davis never presented the trial court with a claim for damages based on § 10-221(a)(10) and, on the facts of this case, such a claim would not have been cognizable by the Landlord and Tenant Branch. Super.Ct. L & T R. 5(b); see Campos v. Aguila, 464 A.2d 132, 133 (D.C.1983); Brown v. Young, 364 A.2d 1171, 1173 (D.C.1976). We do not determine here whether RSSA § 10-221(a)(10) requires an automatic one-year renewal of a retail service station lease ifbefore the lease expiresthe franchisor says nothing to the franchisee, or negotiates an extension of less than one year, or attempts to nonrenew the franchise in a manner that violates PMPA. Nor need we address the difficult question whether such an application of § 10-221(a)(10) would obstruct the purposes of PMPA to such an extent as to require preemption. We hold only that when, as here, a franchisor does give the required notice of nonrenewal (here 90 days under PMPA) before the date on which a retail service station lease expires, and nonrenewal will not take effect until a date after the conclusion of the term, the resulting extension is, facially, a periodic tenancy [13] that cannot be reformed or otherwise deemedand specifically enforced asan automatic one-year lease renewal at the original expiration date. Accordingly, as a matter of law, an RSSA § 10-221(a)(10) defense was not available to Davis in Gulf's action for possession. Summary judgment here was appropriate.