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Kehm Oil Co. v. Texaco

June 30, 2006

KEHM OIL COMPANY AND GOLDEN OIL COMPANY, PLAINTIFFS,
v.
TEXACO, INC., TEXACO REFINING AND MARKETING (EAST), INC. DOING BUSINESS AS STAR ENTERPRISE-PARTNERSHIP, STAR ENTERPRISE PARTNERSHIP, CHEVRON CORPORATION, CHEVRONTEXACO CORPORATION, CHEVRON PRODUCTS COMPANY, CHEVRON USA INC., MOTIVA ENTERPRISES, LLC AND SFM ENERGY, LLC, DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER

Before the Court for consideration is a MOTION FOR TEMPORARY RESTRAINING ORDER, with brief in support (Document Nos. 2 & 3), filed by plaintiffs Kehm Oil Company and Golden Oil Company (collectively "Plaintiffs"). In response to the Motion, defendants Motiva Enterprises, LLC ("Motiva") and Texaco, Inc. have filed MOTIVA'S RESPONSE TO PLAINTIFFS' MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION and DEFENDANT TEXACO INC'S RESPONSE TO PLAINTIFFS' MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION (Document Nos. 12 & 17). Plaintiffs have also filed their REPLY BRIEF (Document No. 15), as well as a REPLY TO TEXACO'S BRIEF (Document No. 18). The Court heard evidence and oral arguments on the Motion on June 28, 2006, and the Motion is now ripe for disposition.

Standard of Review

This action arises under the federal Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2801 et seq. The standard for the granting of a Temporary Restraining Order (TRO) or Preliminary Injunction (PI) under the PMPA is as follows:

(a) the franchise has been terminated or the franchise has not been renewed; (b) there exists sufficiently serious questions going to the merits to make such questions a fair ground for litigation; and (c) the court determines on balance that the hardships imposed upon the franchisor by issuance of an injunction will be less than the hardship which will be imposed upon such franchisee if such relief is denied.

Fink v. Amoco Corp., 55 F. Supp. 2d 350, 353 (W.D. Pa. 1999) (citation omitted). However, if the franchisee has not timely moved for injunctive relief under the PMPA, the franchisee does not get the benefit of the "relaxed" standard recited above. As explained by the United States Court of Appeals for the First Circuit:

The PMPA offers a preliminary injunction standard to franchisees that is more forgiving than the common law standard, see id. § 2805(b)(2), but in order to take advantage of this more forgiving standard, the franchisee's request must be timely, see id.§ 2805(b)(4). The timeliness of the franchisee's request for a preliminary injunction depends on the notice it received. If a franchisee receives at least 90 days notice, then it has 90 days from the date of its receipt of the notice to file a preliminary injunction motion. Id.§ 2805(b)(4)(A). If a franchisee receives less than a 90-day notice, then it has 30 days from the date of the non-renewal to file a preliminary injunction motion. Id.§ 2805(b)(4)(C). ... In the absence of the more forgiving preliminary injunction standard described in the PMPA, courts would apply the common-law standard, which does not include any specific time limitations.

Esso Standard Oil Co. (Puerto Rico) v. Monroig-Zayas, 445 F.3d 13, 16-17 (1st Cir. 2006).

Motiva asserts that Plaintiffs were on notice of the non-renewal of their Texaco franchises due to the Chevron-Texaco merger over four years ago, to wit, by letter from Motiva dated February 4, 2002. Motiva Response at 7-8 (citing Motiva exhs. 6 & 7).*fn1

If so, the standard for granting a TRO would be the well-known common law standard:

(1) a likelihood of success on the merits; (2) that the movant will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief.

KOS Pharmaceuticals, Inc. v. Andrx Corp., 369 F.3d 700 (3d Cir. 2004) (discussing the nearly identical requirements for a preliminary injunction under Fed.R.Civ.P. 65(a)). However, as explained below, the Court finds itself unable to grant Plaintiffs' Motion under either standard.

Discussion

A. ...


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