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Anil Enterprises v. Getty Petroleum Marketing

April 11, 2008

ANIL ENTERPRISES, PLAINTIFF,
v.
GETTY PETROLEUM MARKETING, INC. AND LUKOIL AMERICAS CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Hillman, District Judge

OPINION

This matter has come before the Court on defendants' motion to dismiss plaintiff's Complaint. For the reasons expressed below, defendants' motion will be converted into one for summary judgment and be adjourned for sixty days.

I. BACKGROUND

Plaintiff, a franchisee operator of a gasoline service station that has been converted from a Mobil station to a Lukoil station, filed a three count Complaint against defendants Getty Petroleum Marketing ("Getty") and Lukoil Americas Corporation ("Lukoil"), claiming that the conversion of its station from Mobil to Lukoil is a constructive termination of its franchise agreement violative of the Petroleum Marketing Practices Act ("PMPA") and the New Jersey Franchise Practices Act ("NJFPA"). Plaintiff has also asserted a claim for breach of contract under New Jersey law.

More specifically, plaintiff's Complaint tells the story of the creation of the Mobil brand in 1920, the cultivation of its place in the market, the development of its product, services and loyalty of its customers over the years, and then its merger with Exxon, the divestment of its service stations in certain areas, and through various corporate acquisitions, its eventual purchase by defendant Getty, to which plaintiff's franchise agreements were assigned.

Plaintiff complains that even though Getty retained the right to use the Mobil name through 2010, in May 2005 Getty instituted a "Lukoil renaming program," the effect of which "was to take the plaintiff's station from a recognized, identifiable and sought out branded station to a generic station." Plaintiff further complains that when Getty began the Lukoil renaming program "suddenly plaintiff was being charged the same higher price to obtain gasoline wholesale, but was now a generic station with no customer base and no brand loyalty." As a result, plaintiff contends that it had "no choice but to price on the street as if they were still Mobil stations in an attempt to sell gasoline at a loss," but it "resulted in ever shrinking volumes of gasoline sold and added to the alienation of their loyal Mobil brand customers." Based on all of this, plaintiff claims that the conversion from Mobil to Lukoil effectively terminated its franchise agreement.

Plaintiff's complaint is almost identical to the complaints filed in two other cases currently pending before this Court: Akshayraj, Inc. v. Getty Petroleum Marketing, Inc., Civil Action No. 06-2002 (NLH) and Quick Flow v. Getty Petroleum Marketing, Inc., Civil Action No. 06-2954 (NLH), which is consolidated with Akshayraj. In Akshayraj, the plaintiffs filed a seven-count complaint, which contained three of the same counts as in the instant case: (1) constructive termination of the franchise agreement in violation of PMPA, (2) breach of contract for failure to price in good faith, and (3) violation of the NJFPA. In Akshayraj, the defendants had moved to dismiss the plaintiffs' claims, but before that motion was decided, the Court heard oral argument on the plaintiffs' emergency motion for preliminary injunction under PMPA because two of the plaintiffs' services stations were scheduled for conversion a few days later. The Court denied the plaintiffs' motion.

The Court then considered the defendants' motion to dismiss, and dismissed certain claims, converted defendants' motion to dismiss to one for summary judgment on the other claims, and reserved decision on defendants' motion to dismiss Lukoil for lack of jurisdiction. Specifically applicable to this case, the Court converted the defendants' motion to dismiss into one for summary judgment on the three claims that are also asserted here.

Following further briefing from the parties, the Court granted the converted motion for summary judgment on all of the plaintiffs' claims, including the three claims asserted here. Because there was still one viable claim remaining*fn1 --a claim which had survived defendants' motion to dismiss and was not subject to defendants' converted motion--the Court was still required to determine whether personal jurisdiction existed over Lukoil. Following more briefing, the Court determined that plaintiffs had established that Lukoil has sufficient contacts to establish personal jurisdiction.

The Court's decisions in Akshayraj are important here because plaintiff has asserted the same claims. The final resolution of Akshayraj cannot be summarily applied to this case, however, because (1) this case is at the motion to dismiss stage, and not the summary judgment stage, and (2) the proofs submitted with regard to the converted motion for summary judgment might be different here, and, thus, require a different analysis. Therefore, the Akshayraj case is only applicable at this point with regard to the Court's resolution of defendants' motion to dismiss (hereinafter "Akshayraj I"), and not with regard to the ultimate outcome of the converted motion for summary judgment (hereinafter "Akshayraj II"). With these considerations in mind, the Court will analyze defendants' motion to dismiss.

II. DISCUSSION

A. Jurisdiction

This Court has jurisdiction over plaintiff's federal claims under 28 U.S.C. ยง 1331, and supplemental jurisdiction over plaintiff's state ...


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