Court Opinion

ID: 8412197
Source: CourtListenerOpinion
Date Created: 2022-11-02 19:26:09.845969+00
Date Added: 2024-06-11T16:47:56.029255
License: Public Domain

FLOYD, Circuit Judge,
dissenting:
The majority notes that the Petroleum Restriction (PR) is “slightly broader than necessary to achieve its purpose.” Ante at 192. Nevertheless, it concludes that the PR remains enforceable because it “on the whole ‘afford[s] a fair protection’ to BP’s interests without being ‘so large as to interfere with the interests of the public.’ ” Id. (quoting Merriman v. Cover, Drayton & Leonard, 104 Va. 428, 51 S.E. 817, 819 (1905)). I cannot agree and therefore respectfully dissent.
Virginia law allows a restraint on trade only when it is “reasonable as between the parties and not injurious to the public by reason of its effect upon trade.” Merriman, 51 S.E. at 819. “Whether or not the restraint is reasonable is to be determined by considering whether it is such only as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interfere with the interests of the public.” Id.
Here, the PR, which BP drafted and to which Stanley agreed, prohibits Stanley from
carrying on the business of selling, offering for sale, storage, handling, distributing or dealing in petroleum, gasoline, motor vehicle fuel, diesel fuel, kerosene, benzol, naphtha, greases, lubricating oils, or any fuel used for internal combustion engines, or lubricants in any form, or other petroleum or petroleum-*193related products, ... unless any such use is in connection with the operation of the Property as a Grantor branded service station.
BP admits, however, that it does not sell automotive lubricants to the general public; supply naphtha, benzol, kerosene, greases, or lubricating oils to any service station in Virginia; compete in the automotive lubricant industry; or receive any revenue from the sale of automotive lubricants anywhere within Virginia. In my mind, therefore, BP drafted a covenant that regulates more than is necessary to protect its legitimate interests, and simply put, the PR is overbroad.
BP argues, of course, that the PR is not overbroad. Citing dictionary definitions that indicate kerosene, .naphtha, and motor oil are petroleum-related, it asserts that it has a legitimate interest in prohibiting the sale of any product that would “dilute the demand for [its] petroleum,” even if it does not sell that particular product in Virginia. Notably, however, BP does not argue that it has a legitimate business interest in prohibiting the storage or handling of such products or in regulating the presence and use of “greases,” “lubricating oils,” and “lubricants in any form,” even though the PR specifically addresses this conduct. Instead, it asks us to ignore the PR’s plain language and “construe[]” its overbroad prohibitions “in light of the [PR’s] purpose and aims” — namely, “to prevent the sale of products that dilute the demand for BP gasoline.” “If a certain petroleum product does not have that capacity,” BP argues, “its sale would not be prohibited.” In sum, then, BP asks us (and Stanley) to determine if a prohibited product would “dilute the demand for BP gasoline” and, if not, simply pretend that the plain language of the PR does not truly prohibit the sale, storage, or use of that product. This I cannot do. BP is a sophisticated, experienced, and competently represented party. Accordingly, I must assume that it drafted the PR’s language carefully and intentionally, and I cannot view its sweeping prohibitions as a casual mistake or oversight.* See Richfood, Inc. v. Jennings, 255 Va. 588, 499 S.E.2d 272, 276 (1998) (“No word or clause will be treated as meaningless if a reasonable meaning can be given to it, and there is a presumption that the parties have not used words aimlessly.” (quoting Winn v. Aleda Constr. Co., 227 Va. 304, 315 S.E.2d 193, 195 (1984)) (internal quotation marks omitted)).
BP contends that we can enforce the PR regardless of any overbreadth simply by excising the offending language. And, since oral argument, BP purportedly has released Stanley from the overbroad portions of the PR. See Ante at 192 n. 3. Nevertheless, I cannot conclude that the PR becomes enforceable through alteration by the court or BP. First, Virginia law disfavors judicial reformation of covenants through blue-penciling. See Strategic Enter. Solutions, Inc. v. Ikuma, No. CL 2008-8153, 2008 WL 8201356, at *4 (Va.Cir.Ct. Oct. 7, 2008) (“The Virginia Supreme Court has not directly ruled on ‘blue-penciling’ overly broad clauses in restrictive covenants[;] however it is clear from the restrictive covenant jurisprudence in Virginia that the Court does not *194entertain the notion that these disfavored restraints on trade should be reformed by the judiciary....”); Daston Corp. v. Mi-Core Solutions, Inc., No. CL-2010-9318, 2010 WL 7375597, at *5 (Va.Cir.Ct. July 30, 2010); Better Living Components, Inc. v. Coleman, No. CH04-13,307, 2005 WL 771592, at *5 (Va.Cir.Ct. Apr. 6, 2005). More fundamentally, however, Virginia law supports narrowly drawn covenants that are reasonable, and general public policy encourages parties to draft precise language on which all participants to a contract can rely. Allowing BP; a multinational, sophisticated corporation, to draft blatantly overbroad restrictions and then, when challenged, simply declare that such restrictions are a mistake and meaningless not only is contrary to basic contract principles, but also is detrimental to the public interest. Accordingly, I find that the PR’s overbreadth spoils its enforceability and dissent from the majority’s contrary conclusion.

 The district court aptly noted that the PR "is literally so broad that it would prohibit Stanley from operating a restaurant on the property, if it used kerosene to heat the stove, or a bicycle repair shop if petroleum-based lubricants were used.” BP Prods. N. Am., Inc. v. Stanley, No. I:09cvll47, 2010 WL 2817238, at *4 n. 6 (E.D.Va. July 15, 2010). Furthermore, I cannot comprehend how Stanley could successfully or efficiently operate an automotive repair business without the ability to store or handle greases or "lubricants in any form.”