Wingard v. Exxon Co., USA, Civ. A. No. 3:90-2714-21.

Decision Date28 October 1992
Docket NumberCiv. A. No. 3:90-2714-21.
Citation819 F. Supp. 497
CourtU.S. District Court — District of South Carolina
PartiesThomas H. WINGARD, Doc Brown, Heber Branham, George Giles, R.L. Newman, Michael J. Broom, and T. Frank Cone, Plaintiffs, v. EXXON CO., U.S.A., Defendant.

Stephen Jahue Moore, West Columbia, SC, Dimitri G. "Jim" Daskal, Washington, DC, for plaintiffs.

James Covington Parham, Jr., Greenville, SC, Gaspare J. Bono and Gilbert S. Keteltas, Washington, DC, for defendant.

AMENDED ORDER

TRAXLER, District Judge.

This matter is before me on the motion of the defendant ("Exxon") for summary judgment pursuant to Fed.R.Civ.P. 56.1 I grant the motion as to all causes of action.

I. SUMMARY JUDGMENT STANDARD

The standard for granting summary judgment is well known.

Fed.R.Civ.P. 56(c) states, as to a party who has moved for summary judgment:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issues as to any material fact and that the moving party is entitled to judgment as a matter of law.

Accordingly, to prevail on a motion for summary judgment, the movant must demonstrate that: (1) there is no genuine issue as to any material fact; and (2) that he is entitled to judgment as a matter of law. As to the first of these determinations, a fact is deemed "material" if proof of its existence or nonexistence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue of such a material fact is "genuine" if the evidence so offered is such that a reasonable jury might return a verdict for the non-movant. Id. at 257, 106 S.Ct. at 2514. In determining whether a genuine issue has been raised, the court must construe all inferences and ambiguities against the movant and in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 993, 8 L.Ed.2d 176 (1962).

The party seeking summary judgment shoulders the initial burden of demonstrating to the district court that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Once the movant has made this threshold demonstration, the non-moving party, to survive the motion for summary judgment, may not rest on the allegations averred in his pleadings; rather, he must demonstrate that specific, material facts exist which give rise to a genuine issue. Id. at 324, 106 S.Ct. at 2553. Accordingly, when Rule 56(e) has shifted the burden of proof to the non-movant, he must produce existence of every element essential to his action which he bears the burden of adducing at a trial on the merits.

Summary judgment serves the useful purpose of disposing of meretricious, pretended claims before the court and the parties become entrenched in frivolous litigation. Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 58 (2d Cir.1987). Moreover, although summary judgment is a more extreme remedy, the courts should not be reluctant to grant summary judgment in appropriate cases; indeed, summary judgment is mandated where appropriate. Herman v. City of Chicago, 870 F.2d 400, 404 (7th Cir.1989); Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir.1985), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985); United States v. Porter, 581 F.2d 698, 703 (8th Cir. 1978); Estate of Detwiler v. Offenbecher, 728 F.Supp. 103, 134 (S.D.N.Y.1989); Burleson v. Illinois Farmers Ins., 725 F.Supp. 1489, 1490 (S.D.Ind.1989). In a recent trilogy of decisions —Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)—the Supreme Court has consistently reaffirmed its endorsement of pretrial resolution and summary disposition of baseless actions. These decisions reflect the mandatory nature of Rule 56. In Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), the Court held:

The Federal Rules of Civil Procedure have for almost 50 years authorized motions for summary judgment upon proper showings of the lack of a genuine, triable issue of material fact. Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy and inexpensive determination of every action.' ... Rule 56 must be construed with due regard not only for the rights of person asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis.

Id. at 327, 106 S.Ct. at 2555 (citations omitted).

II. FACTS

The facts of this case are not in dispute. The plaintiffs are seven dealers who operate Exxon service stations in the Columbia, S.C. area pursuant to franchise lease agreements with Exxon. The dealers have operated Exxon service stations for a number of years, varying from a low of nine, to a high of 38 years as Exxon dealers. Each dealer's current lease contains a provision which requires 24-hour, seven days a week operation ("24-hour provision").2

In 1988, Exxon established a uniform 24-hour operating program as part of its marketing strategy. Thereafter, a 24-hour operating requirement became a standard lease provision for all Exxon service stations in the U.S.A. which had an average minimum traffic count exceeding 30,000 automobiles per day and nearby either: (1) a competing station open 24 hours; or (2) another 24-hour traffic generator.3 It is uncontested that each of the dealers in this case meets Exxon's 24-hour operation criteria. Consequently, each dealer has the following provision in his lease:

Lessee agrees ... to keep such station open for such purposes not less than 24:00 hours ... each day excepting NONE, which period the parties have agreed is reasonable considering customer convenience, competitive conditions and economic consequences to Lessee.

(Watson Ex. 2); (Defs.' Exs. 7, 22, 37, 50, 56, 73). Further, it is undisputed that each dealer was aware of, and understood, the 24-hour provision before he signed his current lease, and no dealer presently faces renewal or termination of his lease. Further, many of the dealers consulted with an attorney before signing the lease. (Wingard Dep. at 18); (Giles Dep. at 17); (Newman Dep. at 13-14).

III. DEALERS' ALLEGATIONS

The dealers contend that they could not reject the 24-hour provision because it (the 24-hour provision) was offered, as was the remainder of the lease, on a "take it or leave it basis." (Pls.' Mem. Opp'n Def.'s Mot. Summ. J. at 2). As such, the dealers argue, the leases were non-negotiable contracts of adhesion. (Pls.' Compl. ¶ 4). They further allege that operating 24 hours a day, particularly during the hours of 12:00 a.m. to 6:00 a.m., imposes substantial hardships on the dealers. Such hardships include: (1) an increased risk of crime; (2) difficulty of obtaining reliable night shift employees; and (3) general unprofitability during the early morning hours. Additionally, the dealers argue that, unlike "c-stores",4 the "relatively low volume, old, conventional service stations" they run are not suitable for 24-hour operation. (Pls.' Mem. Opp'n Def.'s Mot. Summ. J. at 5).

The dealers filed this action claiming that the 24-hour provision (1) is unconscionable; (2) violates the contractual obligations of good faith and fair dealing; and (3) violates South Carolina's Unfair Trade Practices Act ("UTPA"), S.C.Code Ann. § 39-5-10 et seq. (Law.Co-op.1976). Additionally, the dealers allege that the 24-hour provision violates South Carolina's blue laws by requiring the dealers to open before 1:30 p.m. on Sunday. S.C.Code Ann. § 53-1-5 et seq. (Law.Co-op. 1992).

Exxon, as an initial affirmative defense, asserts that the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2801 et seq. (1988) preempts the unconscionability and unfair trade practices claims, as well as the lack of good faith and fair dealing claim. Curiously, Exxon does not contend that the PMPA preempts the illegal Sunday operation claim. Exxon moves for summary judgment on its preemption defense, as well as to all causes of action. All of these motions will be dealt with in the following discussion.

IV. DISCUSSION
A. Preemption

The PMPA contains an express preemption provision which prohibits a state from adopting or enforcing any law or regulation with respect to the termination or nonrenewal of any franchise agreement, unless such law or regulation is the same as the applicable provision of the PMPA:

To the extent that any provision of this chapter applies to the termination ... of any franchise, or to the nonrenewal ... 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 ... with respect to termination ... of any such franchise or to the nonrenewal ... of any such franchise relationship unless such provision of such law or regulation is the same as the applicable provision of this subchapter.

15 U.S.C. § 2806(a) (emphasis added). The plain meaning of the provision is to proscribe any state attempt to regulate the termination or nonrenewal of franchise agreements in a manner that is inconsistent with the PMPA.

Exxon contends that "even though plaintiffs have not been terminated or nonrenewed, the federal PMPA governs this case and preempts plaintiffs' state law claims." (Def's Mem. Supp. Mot. Summ. J. at...

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