business reasons exist for entering into a sale-leaseback arrangement that are wholly independent of any secondary effect the transaction might have on the respective rights and obligations of franchisor and franchisee under the PMPA upon termination or nonrenewal. To speculate, a franchisor may, for example, determine that ownership of the real estate upon which the service station premises are located has become undesirable from a business standpoint, perhaps because of the risk of liability under environmental regulations or as a result of tax considerations, and yet wish to defer until a later date the economic change associated with a sale of the property. The Patels have failed to provide me with any indication, either in the provisions of the statute or in the legislative history, that Congress opposed the kind of sale-leaseback arrangement entered into by Sun, and insofar as Congress emphasized the importance of preserving the franchisor's freedom to make legitimate business decisions, I must conclude that Congress would have endorsed both the franchisor's decision to enter into a sale-leaseback transaction and its subsequent reliance on the lease-expiration defense when and if the underlying lease expires without a renewal.
Moreover, it is not clear to me, as it would have to be if I am to write an additional, unwritten condition into the statute, that Congress intended to impose an SLO requirement as a condition of the lease-expiration defense. I find no indication in the legislative history that Congress intended to impose such a condition, nor have the Patels pointed me to any such indication. The Patels apparently want me to conclude from the statutory language itself that the bona fide offer requirement guarantees a "tenancy of life" for franchisees leasing from franchisors who own the service station premises and that an application of the statute that results in something less must somehow violate congressional intent.
The reality is that the PMPA does not guarantee franchisees life tenancy in the service station premises. At most, a franchisee has an opportunity to buy the service station premises. There is no guarantee that the franchisee will be able to afford the purchase price or to secure the necessary financing. Nor is there a guarantee that the franchisee will be able to obtain another franchisor willing to deal with the franchisee on terms that the franchisee can accept. Nor is there a guarantee that the franchisee will be able to maintain franchise operations with any such franchisor for an extended period of time.
Moreover, aside from simple economic risk, the statute itself guarantees something less than the Patels would have me believe. If I am to infer from the language of the statute what Congress intended to accomplish with the offer requirement, I must consider what that requirement actually guarantees a franchisee when all of the other provisions of the statute are taken into account. Although the sale provision in § 2802(b)(3)(D) does require a franchisor to offer the premises to the franchisee, it does so only as a condition of an affirmative defense to nonrenewal. § 2802(b)(1)(B). By complying with the offer requirement, the franchisor can establish a defense to liability for nonrenewal, but the offer requirement itself is not a right a franchisee can enforce. The only right the franchisee can enforce is the right not to be terminated or not renewed. § 2802(a). Furthermore, § 2805(e)(1) precludes injunctive relief when nonrenewal is based on a sale of the service station premises. Unlike most of the other grounds for nonrenewal, in which a franchisee can obtain injunctive relief for noncompliance with the requirements of § 2802, when a sale of the premises is involved, Congress was content to leave the franchisee with an action for damages if the franchisor failed to comply with the requirements of § 2802, which would include a failure to make an offer. § 2805(e)(2). Thus, the bona fide offer requirement of § 2802(b)(3)(D) is not nearly so strong a right as it would appear to be when viewed in isolation from §§ 2802(b)(1)(B) and 2805(e)(1); when the operation of these other provisions are taken into account, it can be seen that the franchisee has no means under the statute to force the franchisor to make an offer. Far from guaranteeing a "tenancy of life," the statute in actuality guarantees only a right to seek damages if the franchisor fails to make an offer before declining to renew the franchise on account of a sale of the premises.
Thus, whereas the statute offered the Patels no means of obtaining the marketing premises from Sun had Sun simply sold the premises in 1987, and whereas the Patels had no guarantee that they could have secured another franchisor had Sun offered the premises to them in 1987 or, even further, that they could have remained in business with such a franchisor until today, Sun assured the Patels that their franchise relationship would be renewed after the sale and Sun in fact extended the franchise for a total of seven more years after the sale. Seven years is a significant amount of time to remain in business. The Patels want me believe that they did not get a fair shake, but they got seven more years in the franchise than they might have, had Sun simply terminated the franchise following the sale. It is not clear to me that Congress would find a sale followed by a renewal of the franchise relationship for a duration of this length to undermine the purposes it sought to accomplish by enacting the PMPA.
Therefore, in the absence of clear congressional intent otherwise, I am unable to impose the SLO requirement as an additional condition of the lease-expiration defense set forth in § 2802(b)(2)(C) and 2802(c)(4) but must instead apply the statute as written.
Accordingly, because Sun has satisfied all of the conditions of the affirmative defense set forth in § 2802(b)(2)(C) and 2802(c)(4), its nonrenewal of the franchise relationship with the Patels in 1994 did not violate § 2802(a)(2) of the PMPA, and I will therefore deny the Patels' Motion for Partial Summary Judgment and grant Sun's Motion for Summary Judgment.
AND NOW, this 15th day of November, 1996, IT IS ORDERED that:
1. Plaintiffs' Motion for Partial Summary Judgment is DENIED;
2. Defendant's Motion for Summary Judgment is GRANTED; and