Bellmore v. Mobil Oil Corp., s. 312

• Decision Date: 06 February 1986
• Docket Number: D,389,Nos. 312,s. 312
• Citation: 783 F.2d 300
• Parties: , 4 Fed.R.Serv.3d 112 Harold J. BELLMORE, Michael J. Fox, and James M. Montesanto, Plaintiffs, Harold J. Bellmore, Plaintiff-Appellee, Cross-Appellant, v. MOBIL OIL CORPORATION, Defendant-Appellant, Cross-Appellee. ockets 85-7489, 85-7527.
• Court: U.S. Court of Appeals — Second Circuit

Page 300

783 F.2d 300

54 USLW 2444, 4 Fed.R.Serv.3d 112

Harold J. BELLMORE, Michael J. Fox, and James M. Montesanto Plaintiffs Harold J. Bellmore, Plaintiff-Appellee, Cross-Appellant, v. MOBIL OIL CORPORATION, Defendant-Appellant, Cross-Appellee.

Nos. 312, 389, Dockets 85-7489, 85-7527.

United States Court of Appeals Second Circuit.

Argued Oct. 21, 1985.

Decided Feb. 6, 1986.

Scott P. Moser, Hartford, Conn. (James Sicilian and Paul D. Williams, Day, Berry & Howard, of counsel), for defendant-appellant, cross-appellee.

Richard W. Farrell, Stamford, Conn. (Albert J. Barr, Farrell & Barr, of counsel), for plaintiff-appellee, cross-appellant.

Before PIERCE, MINER and DAVIS, ^* Circuit Judges.

DAVIS, Circuit Judge:

The major matters before us on this appeal are (1) whether the provision of the Connecticut Gasoline Dealer's Act requiring payment of good will under certain circumstances to franchisees, Connecticut Gasoline Dealer's Act, Conn.Gen.Stat. Sec. 42-133l (b) (Connecticut Act), is preempted by the Petroleum Marketing Practices Act, 15 U.S.C. Secs. 2801-2841 (1982) (PMPA or Act), and (2) whether cross-appellant Harold J. Bellmore waived his right to trial by jury on the first count of his amended complaint. We hold that Sec. 42-133l (b) of the Connecticut Act is not preempted by the PMPA, and that cross-appellant did waive his right to a jury trial on the first count. We therefore affirm the district court's judgment.

I.

Harold J. Bellmore (Bellmore) leased and operated a Mobil Service Station in Hamden, Connecticut, for approximately 25 years. Mobil Oil Corporation (Mobil) is a refiner of petroleum products engaged in the sale and distribution of oil, gasoline, and gasoline-related products to franchise retailers. Mobil is also a franchisor under the provisions of the Petroleum Marketing Practices Act. Bellmore's last written franchise agreement with Mobil covered the period from June 1, 1978 through May 31, 1981. In October 1980 Mobil prepared for the expiration of Bellmore's franchise agreement by evaluating the current arrangement and arriving at a new lease proposal. That new franchise renewal proposal contained a rent increase from $584 per month to $1086 per month for the first year of the new term. Bellmore rejected this proposal. By letter dated November 24, 1980 Mobil stated that the franchise agreement would not be renewed because Bellmore failed to agree to the proposed rent increase as well as to other changes to the franchise agreement.

Bellmore then brought this district court suit seeking declaratory and injunctive relief to prevent Mobil from effecting its intended non-renewal. At that time Bellmore wanted to enjoin non-renewal of the franchise on the ground that Mobil's lease proposal was neither made in good faith nor in the ordinary course of business (as required by the PMPA). On June 15, 1981 the United States District Court for the District of Connecticut denied Bellmore's motion for such relief. ¹ This court subsequently affirmed that ruling.

On January 11, 1982 Bellmore amended his complaint by adding a second count claiming that he was entitled to monetary compensation for the fair market value of his franchise, including good will, under the Connecticut Gasoline Dealer's Act. Contemporaneously, Bellmore filed a demand for a jury trial for the first time. Mobil then filed a Motion to Strike which in part challenged Bellmore's right to a jury trial. The district court permitted the claim alleging a violation of the Connecticut Act to go to the jury but reserved decision on the PMPA claim (now the first count of Bellmore's amended complaint) for itself.

On February 1, 1985 the jury rendered a verdict for $43,000 on Bellmore's claim for good will under the Connecticut Act. Mobil's motion for judgment notwithstanding the verdict, or in the alternative for a new trial, was denied by the district court on March 7, 1985. By memorandum of decision, the district court ruled that Mobil's non-renewal of Bellmore's franchise was proper under the PMPA.

On appeal, Mobil contends that the PMPA preempts the Connecticut Act on all issues related to the termination or non-renewal of petroleum franchises. Mobil also argues that, even if the Connecticut Act is not preempted by the PMPA, it is inapplicable as a matter of law because Bellmore voluntarily relinquished his franchise. Bellmore's cross-appeal asserts that the district court erred in refusing to submit the first count of his amended complaint to the jury. We first consider Mobil's appeal and then turn to Bellmore's.

II.

It is now hornbook law that, in general, state authority to legislate in a particular field can be preempted by federal law in two ways. Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Dev. Comm'n, 461 U.S. 190, 203-04, 103 S.Ct. 1713, 1721-22, 75 L.Ed.2d 752 (1983); Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248, 104 S.Ct. 615, 621, 78 L.Ed.2d 443 (1984). Congress can intend to supersede state law in a given field, Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977), or state law may actually conflict with federal law. Fidelity Fed. Sav. & Loan Ass'n v. De La Cuesta, 458 U.S. 141, 152-53, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982). The application of the preemption doctrine to a particular case is often a matter of statutory construction and may well require a judicial determination of the legislative intent behind a specific federal statute. Congressional purpose to preempt state law can be either express or implied. Absent express preemptive language, Congressional intent to occupy a given field may be found from either a " 'scheme of federal regulation ... so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,' because 'the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject,' or because 'the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose.' " Id. at 153, 102 S.Ct. at 3022 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947)).

Of course, state law is also preempted by Congressional legislation "to the extent that it actually conflicts with federal law." Fidelity Fed. Sav. & Loan Ass'n, 458 U.S. at 153, 102 S.Ct. at 3022. An actual conflict exists where "compliance with both federal and state regulations is a physical impossibility," Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963), or "where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). See also Jones, 430 U.S. at 526, 97 S.Ct. at 1310; Bethlehem Steel Co. v. New York State Labor Relations Bd., 330 U.S. 767, 773, 67 S.Ct. 1026, 1029, 91 L.Ed. 1234 (1947); Fidelity Fed. Sav. & Loan Ass'n, 458 U.S. at 153, 102 S.Ct. at 3022.

In order to evaluate the extent to which the PMPA preempts Sec. 42-133l (b) of the Connecticut Act, this court must examine the statutory language and legislative history of the PMPA, "the subject matter of the regulated field and the interest in uniformity, ... the pervasiveness of the federal statutory scheme ... [and the] impediments that state regulation might pose to federal objectives." County of Suffolk v. Long Island Lighting Co., 728 F.2d 52, 57 (2d Cir.1984). First, the PMPA was enacted to establish "protection for franchisees from arbitrary or discriminatory termination or non-renewal of their franchises." ² S.Rep. No. 731, 95th Cong., 2d Sess. 15, reprinted in 1978 U.S.Code Cong. & Ad.News 873, 874 [cited as Senate Report]. To that end, the PMPA sets forth various grounds and accompanying notice requirements for termination and non-renewal, and prohibits the termination of a franchise on grounds other than those expressly specified in the legislation. In enacting the PMPA, Congress recognized the inherent disparity "of bargaining power which exists between the franchisor and the franchisee," id. at 876, and the resulting misfortunes of the franchisee. The gist of it is that Congress was much concerned with the coercive relationship between the franchisor and the franchisee and adopted the PMPA to protect the franchisee from arbitrary and discriminatory acts of franchisors. ³

Mobil argues that the express statutory text of the PMPA, the legislative history of the Act, and the cases construing that Act mandate broad preemption for any issue related to the termination or non-renewal of petroleum franchises. We disagree. The PMPA neither expressly nor impliedly preempts all state law relating to any aspect of the termination or non-renewal of petroleum franchises. Rather, it preempts only state statutes as to grounds for, procedures for, and notification requirements with respect to termination or non-renewal. ⁴

The PMPA's preemption provision states that:

[to] the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of any such notice with respect thereto) of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of the subchapter.

15 U.S.C. Sec. 2806 (1982). Thus, by its own language...