United States District Court, D. Arizona
HONORABLE STEVEN P. LOGAN UNITED STATES DISTRICT JUDGE
the Court is Scottsdale Gas Company LLC's (the
“Plaintiff”) Application for Temporary
Restraining Order Without Notice and Preliminary Injunction.
(the “Motion”). (Doc. 10) The Court granted the
Plaintiff's request for a temporary restraining order and
ordered defending parties Tesoro Refining & Marketing
Company LLC and Treasure Franchise Company LLC (together, the
“Defendants”) to respond to the Motion. (Docs.
11, 15) On October 10, 2019, the Court held a hearing (the
“PI Hearing”) to address the Plaintiff's
request for a preliminary injunction. At the PI Hearing, oral
argument was provided by both parties. The Court's ruling
is as follows.
Plaintiff operates a retail convenience store and gas station
at 10809 North Frank Lloyd Wright Boulevard in Scottsdale,
Arizona (the “Premises”). (Doc. 10 at 2) The
Plaintiff entered into a franchise agreement and a gasoline
agreement (the “Gasoline Agreement”) with the
Defendants. (Doc. 10 at 2-3) Under the franchise agreement,
the Defendants have a reversionary leasehold interest in the
Premises. (Doc. 10 at 2) Under the Gasoline Agreement, the
Defendants are responsible for supplying the Plaintiff with
gasoline. (Doc. 10 at 2) It is unclear what role the
Defendants play in helping the Plaintiff process customer
credit card payments.
13, 2019, the Defendants sent a notice of termination (the
“Notice”) to the Plaintiff seeking to terminate
the Gasoline Agreement. (Doc. 10 at 3) The Plaintiff
initiated this lawsuit under the Petroleum Marketing
Practices Act (the “PMPA”) seeking to prevent the
Defendants from terminating the Gasoline Agreement. (Doc. 1)
On October 3, 2019, the Plaintiff filed the Motion, alleging
that the Defendants had engaged in illegal, extrajudicial
means of seeking to terminate the Gasoline Agreement. (Doc.
10) The Court issued a temporary restraining order (Doc. 11)
and held the PI hearing on October 10, 2019, to address
whether a preliminary injunction should issue.
preliminary injunction is ‘an extraordinary and drastic
remedy, one that should not be granted unless the movant, by
a clear showing, carries the burden of
persuasion.'” Lopez v. Brewer, 680 F.3d
1068, 1072 (9th Cir. 2012) (quoting Mazurek v.
Armstrong, 520 U.S. 968, 972 (1997) (per curiam)
(emphasis omitted); see also Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 24 (2008) (citation omitted)
(“A preliminary injunction is an extraordinary remedy
never awarded as of right”).
plaintiff seeking a preliminary injunction must show that (1)
he is likely to succeed on the merits, (2) he is likely to
suffer irreparable harm without an injunction, (3) the
balance of equities tips in his favor, and (4) an injunction
is in the public interest.” Winter, 555 U.S.
at 20. “But if a plaintiff can only show that there are
‘serious questions going to the merits'- a lesser
showing than likelihood of success on the merits- then a
preliminary injunction may still issue if the ‘balance
of hardships tips sharply in the plaintiff's favor,'
and the other two Winter factors are satisfied.”
Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d
1281, 1291 (9th Cir. 2013) (quoting Alliance for the Wild
Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir.
2011)). Under this serious questions variant of the
Winter test, “[t]he elements . . . must be
balanced, so that a stronger showing of one element may
offset a weaker showing of another.” Lopez,
680 F.3d at 1072.
Plaintiff seeks a preliminary injunction preventing the
Defendants from (i) terminating the Gasoline Agreement
between the parties; (ii) acting on any reversionary
leasehold interest in the Premises; (iii) taking any
extrajudicial actions affecting the Plaintiff or its ability
to operate a retail store and gas station at the Premises;
and (iv) causing any agents, employees or contractors of the
Defendants from entering onto the Premises, except for
performing acts in the ordinary course of business. (Doc. 10
at 13) The Plaintiff also seeks an injunction requiring the
Defendants to continue (i) their relationship with the
Plaintiff as a supplier of gasoline, and (ii) processing
credit cards in the same manner as before the Defendants
sought to terminate the Gasoline Agreement. (Doc. 10 at 13)
In response, the Defendants argue that the Plaintiff is not
entitled to a preliminary injunction in this case because the
Plaintiff cannot demonstrate (i) that it is entitled to a
preliminary injunction under the PMPA or (ii) that the
Plaintiff has a high likelihood of success on the merits of
its claims under the Federal Rule of Civil Procedure 65
standard. (Doc. 15 at 2, 10)
Injunctive Relief Under the Petroleum Marketing Practices
PMPA prohibits the termination or nonrenewal of a franchise
(i) outside of specifically enumerated reasons and (ii) upon
the franchisor's compliance with PMPA's notice
requirements. Khorenian v. Union Oil Co. of
California, 761 F.2d 533, 535 (9th Cir. 1985). A
franchisee may bring an action to prevent termination or
non-renewal under the PMPA if the franchisor has failed to
comply with the statutory requirements. Id.; 15
U.S.C. § 2805. In particular, franchisees may obtain
preliminary injunctive relief if (1) they establish that the
franchise has been terminated and that “there exists
sufficiently serious questions going to the merits to make
such questions a fair ground for litigation, ” and (2)
a court determines that, on balance, the hardships imposed
upon the franchisor by issuance of preliminary injunctive
relief are less than the hardships that would be imposed upon
the franchisee in the absence of such relief. Id.;
15 U.S.C. § 2805(b)(2)(A) and (B).
Defendants argue that the Court cannot issue an injunction
under the PMPA because the Plaintiff has failed to submit a
timely application for an injunction. (Doc. 15 at 2) The
Defendants argue that the deadline for filing a request for
an injunction under the PMPA is 90 days. 15 U.S.C.A. §
2805(b)(4) (stating “the court need not exercise its
equity powers to compel continuation or renewal of the
franchise relationship if such action was commenced . . .
more than 90 days after the date on which notification
pursuant to section 2804(a) of this title was posted or
personally delivered to the franchisee . . . .”). The
Defendants argue that the Notice was provided to the
Plaintiff on June 13, 2019, which is more than 90 days before
the Plaintiff filed the Motion on October 3, 2019. (Doc. 15
at 2) At the PI Hearing, the Plaintiff did not dispute that
the Motion was filed after the 90-day deadline imposed by the
PMPA. However, the Plaintiff argues that an untimely filing
does not preclude the Court from issuing a preliminary
injunction. At this time, the Court declines to exercise its
discretion to issue a preliminary injunction under the terms
of the PMPA because the Motion was untimely.
Injunctive Relief Under Federal Rule of ...