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Mac's Shell Service v. Shell Oil Products Co.

Docket No.: 08-240
Certiorari Granted: 6/15/2009
Argued: January 19, 2010
Decided: March 2, 2010
Consolidated with: CONSOLIDATED W

PartyNames: Mac's Shell Service, Inc., et al. v. Shell Oil Products Company LLC, et al.
Petitioner: Mac's Shell Service et al.
Respondent: Shell Oil Products Co. et al.

Court Below: United States Court of Appeals for the First Circuit

Mac's Shell Service et al.
v.
Shell Oil Products Co. et al.
Question Presented:

The First Circuit held that in order to receive the protections of the Petroleum Marketing Practices Act ("PMPA" or "Act"), 15 U.S.C. ยง 2801 et seq., a franchisee faced with an unlawful lease must either sign the lease and forego any potential claim that the lease violates the Act or refuse to sign the lease and then challenge the lease following receipt of a notice of nonrenewal. The Ninth Circuit rejected an interpretation of the PMPA that would require the franchisee to discontinue its business in order to preserve its rights under the Act. A single question is thus presented: Whether the PMPA encompasses a claim for "constructive" nonrenewal of the franchise relationship where: (i) the petitioner-franchisees filed suit prior to receiving new lease agreements that violated the Act; (ii) the lease agreements were presented on a take-it-or-leave-it basis; (iii) respondent-franchisor stated it would terminate the franchises unless petitioners signed the lease agreements; and (iv) the franchisees signed the lease agreements, under protest, and pursued their legal claims against the franchisor.

Question:

Does the PMPA encompass a claim for "constructive nonrenewal" of franchisee's lease when: i) franchisees filed suit prior to receiving new lease agreements that violated the act, ii) lease agreements were presented on a take-it-or- leave-it basis, iii) franchisor stated it would terminate the leases unless franchisees signed the new agreements, and iv) franchisees signed lease agreements under protest and pursued their legal claims against the franchisor?

Note:

TH 08-372 FOR ONE HOUR ORAL ARGUMENT

Holding: reversed in part, affirmed in
Vote: 9-0
Read MAC'S SHELL SERVICE V. SHELL OIL PRODUCTS CO. opinion (PDF)
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