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CROWN CENT. PETROLEUM CORP. v. WALDMAN

March 21, 1980

Crown Central Petroleum Corp.
v.
Carl J. Waldman.



The opinion of the court was delivered by: HERMAN

MEMORANDUM

I. INTRODUCTION

 In our memorandum and order of March 6, 1980 we described the procedural steps of this action and postponed our consideration of a motion by Carl J. Waldman (hereafter referred to as "Waldman") to dismiss or strike portions of the complaint filed on August 24, 1979 by Crown Central Petroleum Corporation (hereafter referred to as "Crown"). Waldman brought his motion under F.R.C.P., Rule 12(b)(6) and 12(f) to dismiss the action for failure to state a cause of action or, in the alternative, to strike part of the complaint. Crown's complaint consists of three counts, all rooted to some extent in the franchise relationship between Crown and Waldman. The motion is directed only at Counts II and III. We will now consider the merits of Waldman's motion.

 Count I of the complaint seeks a declaratory judgment that when Crown terminated the franchise relationship with Waldman, Crown complied with the terms of both the Branded Service Station Lease and Dealer Agreement (hereafter referred to as "the Agreement") and the provisions of the Petroleum Marketing Practices Act, 15 U.S.C. §§ 2801 et seq. (hereafter referred to as "the PMPA") and that Crown is entitled to possession of the gasoline service station at 1049 Carlisle Street in Hanover, Pennsylvania. *fn1" Crown asserts its right to this relief because Waldman allegedly violated the Agreement during the summer of 1979. Specifically, Crown alleges that Waldman refused to open or operate the service station for seven consecutive Sundays from May 20 through July 1, 1979 and for the entire three-day period July 13-15, 1979.

 Such willful refusals allegedly violated the express requirements of the Agreement that the service station be opened seven days each week, 365 days a year. Failure to open the station was an adequate ground for immediate termination of the franchise relationship under the Agreement. Crown has alleged a strong interest in maintaining its marketing position as an efficient, high-volume, multi-pump gasoline retail operation. This position requires that each station be open as much as possible and for at least some time every day.

 Crown does not seek damages for any concerted action in restraint of trade that has allegedly already occurred, but it asserts the potentially irreparable injury to its trademark if Waldman continues to participate as an active member in the association through which the alleged conspiracy was formed. *fn3" Crown believes and therefore avers that future conspiracies are likely and it seeks to have us enjoin them.

 Count III of the complaint seeks eviction of Waldman from the station under Pennsylvania law because Waldman's lease expired on June 18, 1976 and was not renewed. Crown decided not to renew the lease because a new Pennsylvania statute, 73 P.S. §§ 202-1 et seq., would have prevented Crown from enforcing parts of the Agreement that it believed were essential to its marketing philosophy.

 II. PENDING STATE ACTION

 The subject matter and remedy sought in Count III form the basis of an identical action between the same parties in a state court. Waldman has raised this identity of issues as part of his argument that we should dismiss Count III under the abstention doctrine. On December 19, 1979 the jury in the state proceeding returned a verdict in favor of Waldman. Although we will not dismiss Count III, we will stay all consideration of the eviction issue pending the final outcome of the action in the Pennsylvania courts. This decision to abate our decision in this count will permit the state courts to fully analyze the issues confronting them before we decide whether we should rule on the matter. See Weiner v. Shearson, Hammill & Company, Inc., 521 F.2d 817, 820-22 (9th Cir. 1975).

 III. ANTITRUST CLAIM

 The remaining portion of Waldman's motion to dismiss is directed at the alleged antitrust violation in Count II. Under the Federal Rules we may consider matters outside the pleadings when we examine the complaint for an asserted failure to state a claim upon which relief can be granted. F.R.C.P., Rule 12(b)(6). When we consider outside material, we must treat the motion as one for summary judgment under F.R.C.P., Rule 56. Because the only outside evidence we will review is the testimony of Waldman elicited and relied upon by Crown's counsel at the November 15, 1979 hearing, we do not believe that Crown needs an opportunity to present any further material.

 In the direct examination of Waldman, the following dialogue took place:

 
Q: If I understand correctly, as a result of the dealers' dissatisfaction with (what) had been accomplished with meetings of D.O.E. (Department of Energy) and representatives of the White House, a group shutdown was hit upon as the means of further protesting the government policy in regard to ceiling prices. Is that fair?
 
A: Yes.
 
Q: Did you join in that group shutdown?
 
Q: And your purpose in doing so was to add to the pressure that the group hoped to bring to bear upon the government to alter its policy, is that correct?
 
A: Yes.

 N.T. p. 62. It is clear to us from counsel's subsequent colloquy with the court that he believes that the testimony of Waldman is sufficient to substantiate Crown's antitrust cause of action:

 
MR. RICHMAN: There are two federal bases here, Judge. One is the Petroleum Marketing Practices Act
 
THE COURT: Of course, you think you have one under antitrust too, I guess.
 
MR. RICHMAN: I would have hoped Mr. Waldman's testimony would have established that, yes, ...

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