The opinion of the court was delivered by: POLLAK
Plaintiffs Take a Minit Car Wash, Inc. ("T.A.M.") and E.L.G. Enterprises Corp. ("E.L.G.") are Pennsylvania corporations. Each operates a gasoline station and car wash. Defendant Gulf Oil Corporation ("Gulf") is a Pennsylvania corporation engaged, inter alia, in the business of refining and marketing motor fuels. Gulf terminated plaintiffs' Gulf franchises on February 20, 1981. T.A.M. had been an independently operated Gulf gasoline dealer since 1975 and E.L.G. since 1976.
During the course of their franchise relationships with Gulf, T.A.M.'s annual volume of gasoline sales averaged about 1.2 million gallons, and E.L.G.'s annual sales volume approximated 3 million gallons. Prior to June of 1980, both these dealers purchased their gasoline requirements exclusively from Gulf. At that time, the availability of gasoline at wholesale prices significantly cheaper than Gulf's prompted the plaintiffs to begin to purchase a substantial portion of their supply needs in the spot market. During the following months, a dispute arose as to whether the plaintiff dealers were entitled to accept the use of the Gulf credit card for consumer purchases of non-Gulf gasoline. Gulf notified the plaintiffs by letter, dated July 22, 1980, that it would not honor credit invoices for the sale of non-Gulf petroleum products. Plaintiffs filed suit on August 12, 1980 alleging that Gulf's policy constituted (1) a violation of both the Sherman and Clayton Acts, (2) a violation of the Emergency Petroleum Allocation Act of 1973 and the regulations promulgated thereunder, and (3) a breach of contract.
On August 15, 1980, plaintiffs received another letter from Gulf notifying them that, in view of their continuing breach of Gulf credit card policy, Gulf would no longer accept their credit card invoices as immediate credit towards wholesale purchases of Gulf gasoline but would, instead, reimburse them, after an audit, for invoices from authorized purchases only. Upon receiving this letter, plaintiffs applied to this court for a temporary restraining order to restrain Gulf from implementing its allegedly new policies. At the hearing held on plaintiffs' application, the application was converted into a motion for a preliminary injunction, and, on November 17, 1980, ruling from the bench, I granted plaintiffs' motion to this extent: I enjoined Gulf from refusing to accept Gulf credit card invoices from sales of Gulf gasoline and other authorized purchases of Gulf gasoline made by plaintiffs. I declined to enjoin Gulf from refusing to honor credit invoices for the sale of non-Gulf gasoline because plaintiffs had not shown any significant likelihood of success on the claim that Gulf's position on that score was illegal.
Meanwhile, on November 14, 1980, Gulf notified the plaintiffs that their franchises had been terminated because T.A.M. had purchased no Gulf gasoline since September 23, 1980 and E.L.G. had purchased no Gulf gasoline since October 16, 1980. These termination notices were to be effective immediately. Plaintiffs thereupon sought an order from this court to prevent Gulf from terminating their franchise. On November 19, 1980, again ruling from the bench, I enjoined Gulf from doing so without first giving ninety days notice pursuant to the Petroleum Marketing Practices Act. 15 U.S.C. § 2801 et seq. Gulf issued such notice on November 20, 1980, effectively terminating the franchises on February 20, 1981.
On April 1, 1981, plaintiffs filed a second suit against Gulf (Civil Action No. 81-1281) alleging that Gulf's termination of plaintiffs' franchises constituted (1) an attempt to monopolize the sale of gasoline in violation of section 2 of the Sherman Act; (2) an attempt to impose both (a) an exclusive dealing arrangement and (b) a tie-in, in violation of section 1 of the Sherman Act and section 3 of the Clayton Act; (3) an illegal termination under the Petroleum Marketing Practices Act, supra; (4) a violation of certain regulations promulgated by the Department of Energy ("D.O.E.") pursuant to the Emergency Petroleum Allocation Act of 1973, 10 C.F.R. §§ 210.61, 210.62(a) (1980); and (5) a breach of contract. Plaintiffs' second complaint seeks damages but no injunctive relief, and this second action has been consolidated with plaintiffs' first complaint of August 12, 1980. Pursuant to Rule 56, F.R.Civ.P., defendant Gulf now moves for summary judgment on all of plaintiffs' outstanding claims.
In assessing defendant's Rule 56 motion, I am mindful that trial courts must resolve "all inferences, doubts and issues of credibility against the moving party." Smith v. Pittsburgh Gage and Supply Company, 464 F.2d 870, 874 (3d Cir.1972). I also recognize that trial courts must be particularly chary of granting summary judgment on antitrust claims where motive and intent often "play leading roles," Poller v. Columbia Broadcasting System, 368 U.S. 464, 473, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458 (1962), but this necessary chariness does not mean that a court should overlook Rule 56(e)'s requirement that a party opposing summary judgment "set forth specific facts showing that there is a genuine issue for trial." F.R.Civ.P. 56(e); see First National Bank of Arizona v. Cities Service, 391 U.S. 253, 288-90, 88 S. Ct. 1575, 1592-93, 20 L. Ed. 2d 569 (1968).
I will consider whether summary judgment on plaintiffs' outstanding claims for damages is warranted treating those claims in the following order: (a) the exclusive dealing and tie-in claims under the Sherman and Clayton Acts, (b) the illegal termination claim under the Petroleum Marketing Practices Act ("PMPA"), (c) the breach of contract claim with respect to Gulf's termination of plaintiffs' franchises, and (d) the breach of contract claim in connection with Gulf's allegedly new policy regarding the use of Gulf credit cards. Plaintiffs have conceded that summary judgment is appropriate with respect to the remainder of their claims.
The Exclusive Dealing and Tie-in Claims
Before addressing the merits of plaintiffs' antitrust claims, I must consider Gulf's affirmative defenses. Gulf contends that the undisputed facts demonstrate that this court lacks jurisdiction over these claims. I turn first to the jurisdictional issue under the Sherman Act.
Section 1 of the Sherman Act prohibits "every contract, combination . . . or conspiracy, in restraint of trade or commerce among the several states." 15 U.S.C. § 1. Accordingly, to establish federal jurisdiction under the Act, the defendant's conduct must involve activities that are either in the flow of interstate commerce or, "while wholly local in nature, nevertheless substantially affect interstate commerce." McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232, 241, 100 S. Ct. 502, 508, 62 L. Ed. 2d 441 (1980). See Harold Friedman, Inc. v. Thorofare Markets, Inc., 587 F.2d 127, 132 (3d Cir.1978).
Gulf contends that all of its activities pertinent to this case stand outside the flow of interstate commerce. It rests this contention on the undisputed fact that Gulf gasoline is refined at the Philadelphia, Pennsylvania refinery for delivery to service stations in the eastern half of the state.
In Canadian American Oil Co. v. Union Oil Co., 577 F.2d 468 (9th Cir.1978) the Ninth Circuit confronted a Sherman Act, section 1 "in commerce" determination virtually identical to the one at bar. There, the appellant gas station owners received their allotments of Union Oil Company gasoline from an in-state refinery owned by Union. The court declared that "no detailed exegesis of Union's production, refining, transporting, [and] marketing . . . system is necessary to determine, as a matter of law, that Union's activities, including those in which it was engaged with the appellants," "occurred within the flow of interstate commerce" and supplied the necessary "interstate nexus." Id. at 471. I too am satisfied that Gulf's conduct of its business with plaintiffs -- involving contractually based deliveries of tens of thousands of gallons of gasoline each week -- was, "for jurisdictional purposes, an ingredient of [Gulf's] interstate production and distribution scheme." Id.
Even were I to find that Gulf's dealings with plaintiffs were "wholly local in nature," McLain, supra, 444 U.S. at 241, 100 S. Ct. at 508, I would nevertheless be compelled by Supreme Court case law to the conclusion that Gulf's alleged practices sufficiently affected interstate commerce to satisfy the alternative, "substantial effect" test for Sherman Act jurisdiction. See, e.g., Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S. Ct. 2004, 44 L. Ed. 2d 572 (1975); Hospital Building Co. v. Rex Hospital Trustees, 425 U.S. 738, 96 S. Ct. 1848, 48 L. Ed. 2d 338 (1976); United States v. Women's Sportswear Mfrs. Assn., 336 U.S. 460, 464, 69 S. Ct. 714, 716, 93 L. Ed. 805 (1949).
I turn next to Gulf's challenge to the court's jurisdiction over plaintiffs' claims under section 3 of the Clayton Act. 15 U.S.C. § 14. That section provides:
It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for the sale of goods . . . supplies, or other commodities . . . for use . . . or resale on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods . . . of a competitor or competitors of the . . . seller, where the effect of such lease, sale, or contract for sale or such condition, agreement or understanding may be to substantially lessen competition . . . in any line of commerce. 15 U.S.C. § 14.
In contrast to section 1 of the Sherman Act, the "distinct 'in commerce' language" of this provision of the Clayton Act, "appears to denote only persons or activities within the flow of interstate commerce." Gulf Oil Corporation v. Copp Paving Company, Inc., 419 U.S. 186, 195, 95 S. Ct. 392, 398, 42 L. Ed. 2d 378 (1974).
In Copp, the Court described Clayton Act, section 3's "in commerce" requirement as denoting "the practical, economic continuity in the generation of goods and services for interstate markets and their transport and distribution to the consumer." 419 U.S. at 195, 95 S. Ct. at 395; see also Swift and Co. v. U.S., 196 U.S. 375, 25 S. Ct. 276, 49 L. Ed. 518 (1905); Standard Oil Co. v. FTC, 340 U.S. 231, 71 S. Ct. 240, 95 L. Ed. 239 (1951). The considerations which prompted me to find that the Sherman Act's "in commerce" test was met in this case also persuade me that Gulf's dealings with plaintiffs fall within the kind of "practical economic" continuum which the court put forward as defining the scope of Clayton Act, section 3 jurisdiction.