Portaluppi v. Shell Oil Co.

• Decision Date: 12 April 1988
• Docket Number: Civ A. 87-1129-A.
• Citation: 684 F. Supp. 900
• Parties: Charles J. PORTALUPPI, Plaintiff, v. SHELL OIL COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

684 F. Supp. 900

Charles J. PORTALUPPI, Plaintiff, v. SHELL OIL COMPANY, Defendant.

Civ A. 87-1129-A.

United States District Court, E.D. Virginia, Alexandria Division.

April 12, 1988.

Warren G. Stambaugh, Arlington, Va., for plaintiff.

Maureen E. Mahoney, Latham & Watkins, Washington, D.C., for defendant.

MEMORANDUM OPINION

ELLIS, District Judge.

This is an action for wrongful termination of a service station franchise.¹ Defendant terminated plaintiff's franchise on the ground that plaintiff pleaded guilty to a felony charge of cocaine possession. Cocaine possession, defendant claims, is a valid ground for termination under the lease and the applicable franchise statutes because it is a crime involving "moral turpitude." Plaintiff sharply disagrees, contending that mere possession of cocaine, as distinguished from possession with intent to distribute, is not a crime involving moral turpitude. These conflicting contentions frame the principal issue presented here.

Procedurally, this matter is before the Court on cross-motions for summary judgment. Plaintiff moved for partial summary judgment on Count I of the Complaint and defendant then filed a cross-motion for summary judgment on all counts on the ground that conviction of cocaine possession is a legally adequate basis for termination. The Court's resolution of defendant's motion is essentially dispositive of the case and is therefore the principal focus of this Memorandum Opinion.

BACKGROUND

The dispositive facts are undisputed. Plaintiff, Charles Portaluppi, operates a gasoline station in Woodbridge, Virginia. The station is leased to plaintiff under various agreements with defendant Shell Oil Company. These agreements constitute a franchise and create a franchise relationship as defined in the PMPA. See 15 U.S. C. § 2801. The parties' franchise relationship is governed by: (1) the parties' Motor Fuel Station Lease; (2) the PMPA, which sets forth conditions under which a franchisor may terminate or elect not to renew a franchise agreement; and (3) the Virginia Petroleum Products Franchise Act (VPPFA), Va.Code Ann. §§ 59.1-21.8 to -21.18:1.

The Lease, the PMPA, and the VPPFA all contain essentially the same provisions. They provide that the franchisor may terminate any franchise upon the occurrence of an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal is reasonable.² Both the PMPA and the VPPFA include as a reasonable ground for termination a conviction of the franchisee of any felony involving moral turpitude.³ In addition, the Lease and the VPPFA provide that no transfer or assignment of a franchise by a dealer to a qualified transferee or assignee shall be unreasonably disapproved by the franchisor.⁴

In July 1987, plaintiff pleaded guilty to possession of cocaine, a felony offense under Va.Code Ann. § 18.2-250. Shell terminated plaintiff's franchise effective January 18, 1988, asserting as grounds for the termination plaintiff's felony conviction. Shell asserts that this termination was reasonable because (i) such a felony conviction is a crime involving moral turpitude, and (ii) even if a conviction of possession of cocaine is not a crime involving moral turpitude, it is an event "relevant to the franchise relationship" warranting termination.

Plaintiff brought this action asserting that Shell wrongfully terminated the franchise relationship. In Count I, plaintiff asserts (i) that possession of cocaine is not a crime involving moral turpitude therefore defendant's termination was wrongful, (ii) plaintiff's conviction was not an event "relevant to the franchise relationship," therefore termination was wrongful, and (iii) that defendant used plaintiff's conviction as a pretext to terminate the relationship because defendant wishes to convert plaintiff's station from a full service station to a gas only station. In Count II, plaintiff asserts that defendant "unreasonably disapproved" plaintiff's proposed sale of the station to plaintiff's father in violation of Va.Code Ann. §§ 59.1-21.11(5). Finally, in Count III, plaintiff asserts that defendant is in breach of the parties' Motor Fuel Station Lease by virtue of the termination and the unreasonable disapproval of plaintiff's proposed sale of the station to his father.

The issues were briefed and orally argued. The Court concludes first that possession of cocaine is a crime involving moral turpitude. Nor was Shell's reliance on the conviction a pretext for illegitimate reasons. Therefore, Shell's termination of plaintiff's franchise was reasonable. See 15 U.S.C. § 2802(b)(2)(C). Alternatively, the Court holds that even if "mere possession" of cocaine is not a crime involving moral turpitude, such a crime is an event relevant to the franchise agreement which warrants termination. See 15 U.S.C. § 2802(b)(2)(C).

ANALYSIS

1. Moral Turpitude

Virginia's leading case on crimes involving moral turpitude is Parr v. Commonwealth, 198 Va. 721, 96 S.E.2d 160 (1957). There, the Supreme Court of Virginia stated that such a crime is "an act of baseness, vileness, or depravity in the private and social duties which a man owes to his fellow man, or to society in general, contrary to the accepted and customary rule of right and duty between man and man."⁵ 96 S.E.2d at 163. The Fourth Circuit's definition is essentially similar. In Castle v. INS, 541 F.2d 1064 (4th Cir. 1976), moral turpitude is defined as "`an act of baseness or depravity contrary to accepted moral standards.'" Castle, 541 F.2d at 1066 (quoting Guerrero de Nodahl v. INS, 407 F.2d 1405, 1406 (9th Cir.1969)).<sup>6</sup> In Castle, the court held that a man's carnal knowledge of a fifteen year old girl, not his wife, "is so basically offensive to American ethics and accepted moral standards as to constitute moral turpitude per se." 541 F.2d at 1066. Applying this standard is not an easy task. "The borderline of `moral turpitude' is not an easy one to locate." Quilodran-Brau v. Holland, 232 F.2d 183, 184 (3d Cir.1956); see Tseung Chu v. Cornell, 247 F.2d 929, 933 (9th Cir.1957) ("We are not unmindful of the myriad decisions sponsoring various concepts of moral turpitude but they offer no well settled criteria."). This is so because the term refers not to legal standards, but to changing moral standards. This difficulty was best stated by Judge Maris in United States v. Zimmerman, 71 F.Supp. 534 (E.D.Pa.1947) (deportation case):

While the term "moral turpitude" has been used in the law for centuries it has never been clearly or certainly defined. This is undoubtedly because it refers, not to legal standards, but rather to those changing moral standards of conduct which society has set up for itself through the centuries.

71 F.Supp. at 537.

American ethics and moral standards have changed over time. About that, there can be no doubt. Examples abound.⁷ It follows, therefore, that the type of crime that is "offensive to American ethics and accepted moral standards" must necessarily change over time. See United States ex rel. Berlandi v. Reimer, 30 F.Supp. 767, 768 (S.D.N.Y.1939) (moral turpitude "is a vague term, its meaning depending to some extent upon the state of public morals"), aff'd, 113 F.2d 429 (2d Cir.1940). The question, then, is whether cocaine possession is offensive to contemporary moral and ethical values.

There can be only one answer to this question. Contemporary America is being ravaged by the scourge of drugs, including cocaine.⁸ It is sapping the nation's vitality. The national toll in terms of maimed, crippled, or destroyed lives is incalculable.⁹ Rarely a day passes without news reports of deaths attributable to cocaine or crack overdoses or dealings.¹⁰ It is doubtful whether our society has any more potent or destructive enemy than cocaine.¹¹ No wonder that the national effort against drugs is popularly referred to as a war. Indeed, there can be only one answer, namely that a felony cocaine offense is profoundly offensive to contemporary moral and ethical values and this Court so holds.¹²

The Court reaches this conclusion only after confirming that there is no controlling Fourth Circuit authority in point. It is also mindful that decisions on the issue are not uniform. A few courts, distinguishing possession with intent to distribute,¹³ conclude that narcotics possession, by itself, is not a crime involving moral turpitude.¹⁴ These decisions are neither controlling nor persuasive. In contrast to these cases is the better-reasoned discussion in United States v. Cisneros, 191 F.Supp. 924 (N.D. Cal.1961), where the court stated, in dicta, that defendant's prior misdemeanor convictions of unlawful possession of narcotics were crimes involving moral turpitude.

That the offenses in question involved moral turpitude is readily demonstrable. ... The violation of the narcotic drug laws of the United States, and of the several states, is a violation of a rule which is accepted by all decent people involving public policy and morals in the United States. ... The evils which the illicit narcotic traffic brings in its wake are all well known, and they are rightfully the subject of public abhorrence. The traffic in illicit drugs would collapse if suppliers would cease to supply the drugs, or if users would cease to use them. In my opinion, it is clearly demonstrated that either class of offense involves moral turpitude.

It is common knowledge that narcotic addicts must, and will, in order to obtain a supply of the drug to which they are addicted, lie, cheat, or steal. Constant deception and subterfuge are necessary, if an addict is to remain at liberty and to enjoy the dubious boon of his addiction.

Id. at 927-28.¹⁵

2. Conviction Relevant to Franchise Relationship

Assuming that plaintiff's conviction was not a crime involving moral turpitude, the issue then becomes whether plaintiff's conviction was an event "relevant to the franchise relationship" that warranted...