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Robertson v. MOBIL Oil Corp.

December 13, 1985

JOHN ROBERTSON, APPELLANT
v.
MOBIL OIL CORPORATION, APPELLEE



On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 84-3578).

Author: Becker

BECKER, Circuit Judge.

John W. Robertson, former operator of a Mobil gasoline station in King of Prussia, Pennsylvania, appeals from a judgment of the district court denying his application for a temporary and permanent injunction to prevent appellee Mobil Oil corporation from refusing to renew his franchise. Robertson claims that Mobil's decision not to renew was impermissible under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. § 2801 et seq (1982). Mobil contends that its action was proper under 15 U.S.C. § 2802(b)(3)(B) which reads:

(3) "For purposes of this subsection, the following are grounds for nonrenewal of a franchise relationship:

B) The receipt of numerous bona fide customer complaints by the franchisor concerning the franchisee's operation of the marketing premises, if--

i) the franchise was promptly apprised of the existence and nature of such complaints by the franchisor; and

ii) if such complaints related to the conditions of such premises or to the conduct of any employee of such franchisee, the franchisee did not promptly take action to cure or correct the basis of such complaints.

After a trial, the district court made findings of fact leading it to the conclusion that Mobil was justified in not renewing Robertson's franchise. Robertson appeals and we affirm.

I

The facts adduced at trial may be summarized as follows.*fn1 In September, 1981, Robertson and Mobil entered into a franchise agreement. Shortly thereafter, Robertson followed appellee's "strong suggestion" that he provide a "mini-serve" gasoline island in addition to the "full-serve" island. As the mini-serve operates at little or no profit, dealers who introduce a mini-service island often compensate by increasing the price of gasoline at the full-serve island. Robertson raised the prices at the full-serve island substantially. He advertised the price of mini-serve gasoline with a large Mobil sign that was visible from the road. However, the sign advertised neither the price of full serve gasoline nor the hours the mini-serve was available. During the next three years, Mobil received 126 customer complaints about Robertson's operation (most of which were written, although some were communicated by telephone). In August 1984, when Robertson's franchise expired, Mobil informed him that, pursuant to 15 U.S.C. 2802 (b)(3)(B), it had elected not to renew the franchise.

As the question before us is, in essence, whether the many customer complaints justified Mobil's decision not to renew Robertson's franchise, it is important to analyse these complaints carefully. The 126 complaints fall into three categories. First, Mobil received roughly twenty-five miscellaneous complaints including allegations of lost gas caps. discourteous service, unsatisfactory repair work and a rental charge assessed for a borrowed gas can. A second category of complaints, apparently numbering in the forties, simply asserted that Robertson charged excessive prices (roughly $1.65-1.75 per gallon) at the full-service island. One customer, for example, alleged that the full-serve price was forty-four cents above what he considered the prevailing market rate. A third category of complaints, numbering roughly fifty, charged that the sign advertising the price of mini-serve gasoline was misleading. These customers stated that the sign lured them into the station where they found the mini-serve island closed; Robertson concedes that he did not keep it open all the time. These customers were then referred to the full-serve island where they discovered, often only after they had been served gasoline, that the price was roughly sixty cents a gallon higher than the advertised mini-serve price.

Robertson was informed of all of these complaints. He reimbursed some of the customers who complained about price deception, but took no action to prevent recurrences of the deception problem. The question before us is whether the district court's conclusion that these complaints justified Mobil in not renewing Robertson's franchise*fn2 is supported.

II

Although the district court suggested that the twenty-five miscellaneous complaints would have justified non-renewal, it focused its analysis on the price-related complaints because it found no evidence that Mobil would have elected not to renew Robertson's franchise on the basis of the twenty-five miscellaneous complaints alone. Because this finding is not clearly ...


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