no. 08-240, mac's shell service v. shell oil products co

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1 (Slip Opinion) OCTOBER TERM, 2009 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES Syllabus MAC’S SHELL SERVICE, INC., ET AL. v. SHELL OIL PRODUCTS CO. LLC ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT No. 08–240. Argued January 1 9, 2010—De cided March 2 , 2010* The Petroleum Marketing Practices Act (Act) limits the circumstances in which franchisors may “terminate” a service-station franchise or “fail to renew” a franchise relationship. 15 U. S. C. §§2802, 2804. Typically, the franchisor leases the service station to the franchisee and permits the franchisee to use the franchisor’s trademark and purchase the franchis or’s fuel for resale . §2801(1). As relevan t here, service-station franchisees (dealers) filed suit under the Act, alleging that a petroleum franchisor and its assignee had constructively “terminate[d]” their franchises and constructively “fail[ed] to renew” their franchise relationships by substantially changing the rental terms that the dealers had enjoyed for years, increasing costs for many of them. The dealers asserted these claims even though they had not been compelled to abandon their franchises, and even though they had been offered and had accepted renewal agreements. The jury found against the franchisor and assignee, and the District Court denie d their reque sts for judgment as a matter o f law. The First Circuit affirmed as to the constructive termination claims, holding that the Act does not require a franchisee to abandon its franchise to recover for such termination, and concluding that a simple breach of contract by an assignee of a franchise agreement can amount to constructive termination if the breach resulted in a material change effectively end ing the lease. However, the cour t reversed as to the constructive nonrenewal claims, holding that such a claim cannot be maintained once a franchisee signs and operates under a —————— * Together with No. 08–372, Shell Oil Products Co. LLC et al. v. Mac’s Shell Service, Inc., et al., also on certiorari to the same court.

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