Petition for Writ of Certiorari — Abadjian v. Gulf Oil Corp.

Supreme Court, U.S.

88-674. FILED

Olt 15 1988

JOSEPH F. SPANIOL, JR.

No.

CLERK

In The

Supreme Court of the United States

October Term, 1988

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JACK ABADJIAN, MARK BALL,

JOSEPH BROWN, JOHN EGHENIAN,

BRAD MAY, NASSIR MAZAREI,

DONALD PROUSE, AL ROSENSTEIN,

ARAM SHISHMANIAN, JOE SMIDERLE

and STEPHEN WEBBER,

Petitioners,

Vs.

GULF OIL CORPORATION, a

Pennsylvania corporation,

THRIFTY OIL CORPORATION, a

California corporation

Respondents.

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_

PETITION FOR WRIT OF CERTIORARI TO THE

COURT OF APPEAL OF THE STATE OF CALIFORNIA,

SECOND APPELLATE DISTRICT, DIVISION TWO

,%

7

KENNETH P. ROBERTS

A PROFESSIONAL LAW CORPORATION

5850 Canoga Avenue, Suite 400

Woodland Hills, CA 91367

(818) 888-3553

Attorney for Petitioners

COCKLE LAW BRIEF PRINTING CO,, (800) 225-6964

OR CALL COLLECT (402) 342-2831

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QUESTIONS PRESENTED

1. Do State Courts enjoy concurrent ‘1risdiction to

enforce rights created by the Petroleum Marketing Prac-

tices Act, 15 United States Code § 2801 —- 2806 as sup-

ported by the language and decisional history of the

statute or, do federal courts hold exclusive jurisdiction

over PMPA actions as announced by the district court in

Rustom v. Atlantic Richfield Company, 618 F. Supp. 210

(C.D. CA 1985) a decision based upon analogizing the

jurisdictional language of the Petroleum Marketing Prac-

tices Act to the jurisdictional language in Title VII of the

Civil Rights Act?

2. May a state court of appeal disregard a remand

order and subsequent ruling of the circuit court on

appeal, in reversing the trial courts decision for Peti-

tioner, based only on its collateral determination that the

state court lacked jurisdiction, in contravention of both

the opinion of the district court and the prohibition of 28

U.S.C. § 1447(d)?

ii

PARTIES TO THE PROCEEDING BELOW

Petitioners, JACK ABADJIAN, MARK BALL, JOSEPH

BROWN, JOHN EGHENIAN, BRAD MAY, NASSIR

MAZAREI, DONALD PROUSE, AL ROSENSTEIN,

ARAM SHISHMANIAN, JOE SMIDERLE and STEPHEN

WEBBER, and Defendants, GULF OIL CORPORATION,

GULF OIL REAL ESTATE DEVELOPMENT CORPORA-

TION, a wholly owned subsidiary of GULF OIL CORPO-

RATION, assorted individual employees of GULF, AND

THRIFTY OIL CORPORATION were all parties to the

action below.

Although all Petitioners met the definition of ‘fran-

chisee’, only Respondent Mobil Oil Corporation met the

definition of ‘franchisor’ and accordingly, they are the ex-

clusive parties to the issues presented to this Court. How-

ever, the interrelatedness of Petitioner’s claims against

Thrifty Oil Corporation as well as Gulf, have prompted

Petitioners inclusion of Thrifty herein, although admit-

tedly as merely an interested part.

iii

TABLE OF CONTENTS

Page

tc kg uo beens 6 a Ww .e'e a'ea-eiae i

Parties to the Proceeding Below .................... ii

IE ree 1

NY ale esd acc dn aver ssuwewesenesbaeiees 3

te hn cc 5b Kad Awa 6 os O04 48 n0 0 8s 4

Statutory Provisions Involved...................... 6

SES PT EEEE EERE ESCCRE REE TS 7

A. Facts and Lower Court Proceedings ........... 7

B. GULF’s Assertion of the Exclusive Federal Juris-

ES OP ee rs Lee eee eee Tee 10

C. The Court of Appeal’s Reversal Based Only

Upon the Issue of Jurisdiction In Contravention

a Seer er eer 12

meeonme Tor Cramting the Writ... ..........0..0000s: 14

I. Congress Intended that botin the State and Federal

Courts have Jurisdiction over PMPA Claims...... 14

II. Remand Orders are binding decisions on the

Courts of California as to the forum in which the

action is to be litigated

EE SOS aU ON aN

iv

TABLE OF AUTHORITIES

Page

CASES

Bates v. Chevron U.S.A., Inc., 151 G.App. 544, 260

ee ee SE co 2 Gh Wok cee ene ceca Loe ee aes 12

Bsales v. Texaco, Inc. 516 F.Supp. 655 (N.J. 1981) ...... 1

Brach v. Amoco Oil Co., 677 F2d 1213, 1220-1221

SEN cus ob sain sce Gus eee aR ee a ee ee 1

Browning v. Navarro, 743 F.2d 1069 (5th Cir. 1984) ....28

California ARCO Distributors, Inc. v. Atlantic Rich-

field Co., 158 Cal.App.3d 349, 204 Cal.Rptr. 743,

ks ok is wae eae Oe es eee cance: 11, 16, 18

Chandler v. O’Brien, 445 F.2d 1045, (Tenth Circuit

1971) cest. denied 405 US. 9664 .........ccsceccens 13

Cianci v. Superior Court, 40 Cal.3d 903, 710 P.2d 375

5. a eee Baas BO 9 aha rai Bag eee de Ch ly ph A SoM age 1, Ti, 38, 19

DeCosta’s Automotive, Inc. v. Birchwood Plaza Shell,

Inc., 482 N.Y.S. 2d 832 106 A.D. 484 (1984)........ 12

Dowd Box Co. v. Courtney, 368 U.S. 502; 82 S.Ct.

ee Re ies ca ks eh EMER aa eek 20

Emerson v. J.F. Shay Co., 76 Cal.App.3d 579, 589

fe rE nM OAL ie in ota 24

Frankard v. Amoco Oil Co., 342 N.W.2d 247 (1983)

BO EE BPE oo vcd he kek de ladsans ie 12

Guilderhus v. Amoco Oil Co., 470 F.Supp. 1302, 1304

ee en MPO aoe oes Seebeck saat he rere eee 23

Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473,

eto ee Oe | | A eS BE 2, 19

Johnson v. Mobil Oil Corp., 528 A.2d 155, 364

pg ee Ss rer Ere re tre y ee

TABLE OF AUTHORITIES-—Continued

Page

Kunzi v. Pan American World Airway, Inc., 833 F.2d,

$203. Gh CRE TPs nay a eeas ckwneereenie eee 14

Lambert Run Coal Company v. Baltimore and Ohio

Railroad Company, 258 U.S. 377; 42 S.Ct. 349

CIDE 0. vane ceeveecvuyen cede eee eee keene eee es 27

Lanham v. Amoco Oil Co., 481 F.Supp. 405 (D. Md.

is | PPro yer rrr rT ry Terr ry rier ih EE oe 12

Los Angeles Memorial Colliseum Commission v.

National Football League, 634 F.2d 1197, 1201 (9th

Che. TROP oie cic sedeccs sense ee ee 23

Missouri Pacific Railroad Co. v. Fitzgerald, 160 U.S.

556, 16 SAA. BOP CBGO) .. 6 oc ch enous inei ieee) 26, 27

Moody v. Amoco Oil Company, 734 F.2d 1200, 1216

(Fie Gig BSG i oda enschede ene eae 23

Niakan v. Samaan 199 Cal.App.3d 716, 245

Cal Rote. 26 CIGGB). . oc scccaescnunineacns 2, 4, 12, 16

Rath Packing Co. v. Becker, 530 F.2d 1295 (9th Cir.

WFD) os onc cnccdadacannsvetae deus a oul ae eee 26

Ricco v. Shell Oil Corporation, 434 A.2d 1151, 180

N.j. Samer. S99 CUP). 3 oie ocs ss xcktaesneurboneens 12

Roberts v. Amoco Oil Co., 740 F.2d 602 (8th Cir.

TODD) oo oe akcse dunce debpveua need dkere eee 15

Rustom v. Atlantic Richfield Co., 618 F.Supp. 210

CCD. CA WORD osc ca cetandannsepee eee passim

Ted’s Tire Service, Inc. v. Chevron U.S.A. Inc., 470

F.Supp. 163 (D. Conn. 1979) ...... 2; 3, th, 72. 38

Thermatron Products, Inc. v. Hermansdorfer, 423 U.S.

343; 96 S.Ct. 584 (1976)

vi

TABLE OF AUTHORITIES-Continued

Page

Valenzuela v. Kraft, Inc., 739 F.2d 434 (9th Cir. 1984)

oe encceneéatee shumeee Renn n a eee Eee 17, 18, 21, 22, 24

Walters v. Chevron U.S.A., Inc., 269 S.E.2d 495, 154

G.App. G36 CGD oss cccvniasnsvuenene ae 12

STATUTES

28 U.S.C. § 1447(c) (Procedure after removal gen-

CUREIY). oc cc ecndcdecscvieneuen esvepeweneenueeaeen me 8

28 USL. § 16D) «oc siscaccncaveuceee eee passim

15 U.S.C. § 2801 et seq., (Petroleum Marketing

PUOCMORS ACE oicccsccusesehvueedtegereeeee passim

13 UBC. @ SOR. sc cesctcsenpesecicio eee 20

15 USC. § SR occ ccc endenegstiesvas eee 6

15 UGC. § SRGRGGRE: «0 <ccnstusseecnesuuee ere 23

1S UGA. § BeeO ses cosnecsscecessseesss sue 6, 19

1S USC. § GRO os. on cscksscncauusse cee 20, 24

RULEs

United States Supreme Court Rules:

RO E71) 2s. ccaceneshecnuts sumnkeenswetiveeeeeeee 4

PURE BF 1GED. so 0 vod dened nnnasaeeue wayne 4

REPORTS

Senate Report No. 731, 95th Cong., 2nd Sess. 15,

reprinted in [1978] U.S. CODE CONG. & AD.

NEWS G76 cccccdcccccvaguaepceeewsveneere 1, 16, 22

Petitioner respectfully petitions this Court for issu-

ance of its Writ of Certiorari as follows:

Lp

vv

INTRODUCTION

The Federal Petroleum Marketing Practices Act

(hereinafter “PMPA”), 15 United States Code § 2801, et

seq., was enacted June 19, 1978, to establish “minimum

federal standards governing the termination and non-

renewal of franchise relationships for the sale of motor

fuel by the franchisor or supplier of fuel.” S.Rep. No. 731,

95th Cong., 2d Sess. 15, reprinted in 1978 U.S. CODE

CONG. & AD. NEWS 873. Congress was concerned “with

the disparity of bargaining power between distributors

and retailers of motor fuel. With this remedial purpose in

mind, Congress sought to limit the circumstances in

which a distributor could terminate a franchise relation-

ship with the retailer.” Bsales v. Texaco, Inc., 516 F. Supp.

655, 661 (D. N.J. 1981). As the Seventh Circuit Court of

Appeals has concluded:

“... [A]s remedial legislation, the Act must be given

a liberal construction consistent with its overriding

purpose to protect the franchisees. [citations]” (Brach

v. Amoco Oil Co., 677 F.2d 1213, 1220-1221 (1982).)

When analysing whether federal courts have exclu-

sive jurisdiction over a claim brought under a federal law,

one begins with the presumption that concurrent state

and federal jurisdiction exists. Recently the California

Supreme Court followed this presumption in Cianci v.

Superior Court, 40 Cal.3d 903, 710 P.2d 375 (1985), finding

concurrent jurisdiction to exist in actions involving the

Federal Racketeer Influenced and Corrupt Practices Act,

wherein it stated:

““Concurrent jurisdiction has been a common phe-

nomenon in our judicial history, and exclusive fed-

eral court jurisdiction over cases arising under

1

2

federal law has been the exception rather than the

rule.’ (Citation omitted). Accordingly, ‘[iJn consider-

ing the propriety of state court jurisdiction over any

particular federal claim, [we] begin with the presump-

tion that state courts enjoy concurrent jurisdiction.

(Citations omitted) (emphasis added).” (Id. at page

919).

In Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473,

101 S.Ct. 2870, (1981), this Court said:

“The general principal of state court jurisdiction over

cases arising under federal law is straight forward:

state courts may assume subject-matter jurisdiction

over a federal cause of action absent provision by

Congress to the contrary or disabling incapability between

the federal claim and state court adjudication.”

(emphasis added) (Id. at pages 477-478).

The Court in Johnson v. Mobil Oil Corporation, 364

Pa.Super. 275, 528 A.2d 155, 163-164 (1987) gives perhaps

the most thorough analysis of the issue as applied to the

PMPA and concludes:

“. . . We perceive no incompatibility between state

court jurisdiction and promoting Congress’ intent to

protect the needs of both franchisees and franchisors,

to remedy disparity in bargaining power and to pre-

vent arbitrary or discriminatory termination or non-

renewal. For the foregoing reasons, we find that a

state court enjoys concurrent jurisdiction over claims

under the PMPA.” (528 A.2d at 164).

The State of California in Niakan v. Samaan, 199

Cal.App.3d 716; 245 Cal.Rptr. 24 (1988) has recently taken

the opposite position, holding that federal courts have

exclusive jurisdiction to enforce the PMPA. There is no

federal circuit Court of Appeal opinion on this issue and

the federal district courts are divided with the decision

upon which Niakan rests, Rustom v. Atlantic Richfield Com-

pany, 618 F.Supp. 210 (C.D. CA 1985) finding exclusive

federal court jurisdiction, and Ted’s Tire Service, Inc. v.

Chevron U.S.A. Inc., 470 F.Supp. 163 (D. Conn. 1979) find-

ing concurrent state court jurisdiction. Every prior court

2

to consider this issue has determined that concurrent

jurisdiction exists; at least seven other states having con-

sidered the issue, exercising jurisdiction over the PMPA

in reported decisions.

The first issue presented by this Petition is whether

state courts enjoy concurrent jurisdiction to enforce rights

created by the PMPA.

Title 28 of the United States Code § 1447(d) provides

in pertinent part:

“An order remanding the case to the state court from

which it was removed is not reviewable on appeal or

otherwise... ”

As hereafter discussed, in the trial court below, the

case at bar was removed not once, but twice by Defen-

dants to federal court. On both occasions, the federal

court remanded the action for adjudication of the dealer’s

PMPA claims in state court and the Ninth Circuit Court of

Appeal dismissed Defendant’s appeal citing this Court’s

Opinion in Thermatron Products, Inc. v. Hermansdorfer, 423

U.S. 343; 96 S.Ct. 584 (1976).

The second issue presented by this Petition is

whether a state court of appeals is precluded from enter-

taining questions concerning the proper jurisdiction for

actions brought under a federal statute when a federal

court has chosen rightly or wrongly, to remand the case

after removal for adjudication of Petitioner’s PMPA

claims in state court.

a

v

OPINIONS BELOW

The Opinion of the Court of Appeal of the State of

California, Second Appellate District, Division Two, is

printed in Appendix A hereto; the Court of Appeal

declining to publish said Opinion. Also appended nereto,

+

is the Opinion of the United States District Court, Central

District of California.

A Petition for Hearing to the California Supreme

Court was denied on July 20, 1988, with Justice Mosk

dissenting.

La

4

JURISDICTION

The jurisdiction of this Court is invoked upon the

following grounds:

On May 8, 1988, the Court of Appeal of the State of

California, Second Appellate District, Division Two, filed

its Opinion in this case reversing Summary Judgment for

Petitioner on PMPA grounds, having determined that the

federal courts hold exclusive jurisdiction over PMPA

causes of action. The applicable portion of the Court of

Appeal Opinion is set forth in Appendix A, pages 4

through 5, attached hereto.

On July 20, 1988, the California Supreme Court filed

its Order Denying Dealer’s Petition for Review in the

California Supreme Court, and this Petition has been

filed within 90 days of that date.

Jurisdiction for review exists pursuant to United

States Supreme Court Rules, Rule 17.1(b) and 17.1(c) by

reason of a conflict amongst both state courts and federal

courts upon a federal issue, and by reason that the con-

flict presented relates to an important question of federal

law which has not been, but should be, settled by this

Court. The exclusive federal jurisdiction holdings of the

California Court of Appeals here, and in Niakan v. Sam-

aan, 199 Cal.App.3d 716, supra, and Rustom v. Atlantic

Richfield Co., supra, 619 F.Supp. 210 directly confiict with

the state and federal court holdings of Johnson v. Mobil Oil

5

(PA. Super.), supra, 528 A.2d 155, 163-164, Ted’s Tire Ser-

vice Inc. v. Chevron U.S.A. Inc., supra, 470 F.Supp. 163, and

the exercise of jurisdiction by at least seven other states.

Because opposite conclusions have been reached in

published decisions upon the issue of whether concurrent

or exclusive federal jurisdiction exists as to actions cre-

ated by the PMPA, the validity of proceedings involving

the PMPA undertaken in state courts currently and in the

future remain open to question until such time as the

jurisdictional issue is resolved. Keeping in mind the com-

pelling need for the PMPA and its protective provisions, a

need found to exist by Congress, it is submitted that the

issue presented herein is an important question of federal

law to be settled by this Court. Moreover, this Court has

not heretofore considered any issues arising under the

PMPA. In the interest of an orderly and proper develop-

ment of the law in this area of great public importance, an

area also already under the eye of federal agencies, reso-

lution of this issue is deserving of this Court’s attention

and interpretation.

Further, remand orders pursuant to 28 U.S.C.

§ 1447(d) are not reviewable on appeal or otherwise as

has been long established by this Court. Therefore,

whether a state court is precluded from revisiting the

issue Of proper jurisdiction of the causes of action before

it presents yet another issue upon which the Decision of

the California Court of Appeal below conflicts with pre-

vious district court decisions, and additionally, the hold-

ing of this court on a federal question. In that this Court

has expressly recognized that a remand order is a binding

determination of jurisdiction whether or not that order

might be deemed erroneous by an appellate court, the

decision herein is in direct conflict and requires this

Court’s review. As set forth infra, application of 28 U.S.C.

§ 1447(d) to the possibly ambiguous or unforeseen

6

circumstances herein is deserving of this Court’s inter-

pretation and holding.

The validity of remand orders, an important mecha-

nism by which the federal courts exercise control over

their jurisdiction, will remain open to review or side-

stepping by state courts until this issue is resolved.

a

4

STATUTORY PROVISIONS INVOLVED

This case involves two statutory provisions. The

Petroleum Marketing Practices Act, 15 United States

Code § 2801-2806, the provisions of which are set forth in

Appendix G, and the Removal Statute 28 United States

Code § 1447(d), the provisions of which are set forth in

Appendix H. The jurisdictional language of the PMPA at

issue in the present Petition is contained in 15 U.S.C.

§ 2805(a) as follows:

“If a franchisor fails to comply with the requirements

of § 2802 or 2803 of this Title, the franchisee may

maintain a civil action against such franchisor. Such

action may be brought without regard to the amount in

controversy, in the district court of the United States

in any judicial district in which the principal place of

business of such franchisor is located or in which

such franchisee is doing business. Except that no

such action may be maintained unless commenced

within one year after the later of —

“(1) the date of termination of the franchise or non-

renewal of the franchise relationship; or

(2) the date the franchisor fails to comply with the

requirements of § 2802 or 2803 of this Title.”

(Emphasis Added).

The jurisdictional language of Title 28 U.S.C.

§ 1447(d) at issue in the present Petition is as follows:

ss il

7

“An order remanding a case to the State court from

which it was removed is not reviewable on Appeal or

otherwise... ”

STATEMENT OF CASE

A. Facts and Lower Court Proceedings.

In early 1979, having concluded that business was

not profitable in Southern California, Gulf announced a

plan to sell its Los Angeles division assets. Shortly there-

after, Thrifty advised Gulf of its interest in purchasing

Gulf’s Southern California service stations and by Con-

tract dated September 30, 1980, Gulf agreed to sell, and

Thrifty agreed to purchase, all of Gulf’s Los Angeles

division service stations. When Gulf and Thrifty entered

into the September 30, 1980 Contract, each Dealer occu-

pied and operated a service station owned or leased by

Gulf, pursuant to a franchise agreement which included a

lease agreement and a gasoline supply agreement with

Gulf.

Both Thrifty and Gulf recognized that the terms of

their contracts and agreements would trigger the PMPA

and therefore expressly agreed, in paragraph 18, sub-

paragraph (c), of their contracts dated September 30,

1980, that each would abide by the provisions of the

PMPA.

Consistent with its obligations under the PMPA Gulf

identified its dealers to whom a right of first refusal was

required to be given and thereafter, by letter dated

November 24, 1980, notified its Los Angeles division

dealers, stating in part:

“You will be given notification of the offer required

by the PMPA to acquire the station yourself.”

Thereafter Thrifty protested, disputing that the

PMPA gave the dealers a right to first refusal.

In August, 1981, the Petitioners filed this action

against Gulf and Thrifty alleging in their First Cause of

Action that the dealers were entitled to a declaration of

rights that (1) each dealer was a franchisee as defined in

8

15 U.S.C. § 2801; and (2) before Gulf could sell its interest

in the dealer’s service station premises to Thrifty, it must

make a bona fide offer to sell their interest to the dealers

pursuant to the PMPA.

Following the filing of the First Amended Complaint,

both Gulf and Thrifty twice unsuccessfully attempted to

remove the case to federal Court. Because the Ninth

Circuit does not permit pendent party jurisdiction, and

because there did not exist a separate and independent

controversy as to Thrifty, remand was ordered pursuant

to 28 U.S.C. § 1447(c) by the United States District Court

for the Central District of California. The District Court

Opinion, filed March 13, 1984, is attached as Appendix C.

(App. p.8).

Thrifty applied to the United States Court of

Appeals, Ninth Circuit, appealing the Decision of

Remand and Gulf filed in addition, a Petition for Writ of

Mandamus. The Ninth Circuit Court of Appeal dismissed

Defendant’s Appeal by Order dated July 3, 1984, citing

Thermatron, supra. The Circuit Court’s Minute Order is

attached as Appendix D (App. p.24). The Circuit Court

also denied the Petition for Writ of Mandamus, by Order

dated August 22, 1984, attached as Appendix E (App.

p.25).

Thereafter, the dealers moved for summary adjudica-

tion of issues on October 5, 1983. By their Motion, dealers

sought adjudication that the September 30, 1980 Agree-

ment between Defendants Gulf and Thrifty was an event

and occurrence that “triggered” notice and first refusal

rights in Gulf’s interest, be it fee or leasehold, in the

service station properties which the Dealers occupied and

operated as franchisees pursuant to the PMPA, 15 U.S.C.

§ 2801 et seq. After taking the Motions under submission,

the Court (Swearinger, J.) ruled that the Contract between

he

9

Gulf and Thrifty gave each dealer a right of first refusal,

which was required to be offered 45 days prior to the

closing date May, 1981. On December 10, 1984, the trial!

court entered its Minute Order in favor of the dealers

holding:

“The September 30, 1980 Agreement between Defen-

dants was an event and an action that gave to each

moving Plaintiff a right to first refusal to purchase

Gulf’s interest in their respective service stations.

B. Under the [PMPA] Defendant Gulf was obligated

to offer each moving Plaintiff the right as aforesaid at

least 45 days prior to the agreed upon closing date of

the Gulf sales of Thrifty (May 1981).”

The Trial Court’s Minute Order, filed December 10,

1984, is attached as Appendix F (App. p.26). The Court’s

Minute Order further stated that the Court found that

Counts 1, 6 and 7 of the dealer’s Complaint “relate to

rights under the PMPA” and further held that “PMPA

jurisdiction is not exclusively in the Federal Courts.” On

September 11, 1985, at Gulf’s request, the Trial Court

granted severance of the First Cause of Action from the

rest of the Complaint. The only issue remaining there-

under, was the purchase price to be paid by each dealer

upon the exercise of his right of first refusal. In addition,

the trial court awarded the dealers over $200,000 in costs

and attorney’s fees pursuant to statutory provisions con-

tained in the PMPA. Gulf and Thrifty appealed asserting

that the trial court lacked subject matter jurisdiction over

PMPA causes of action, and all of the proceedings in the

action were stayed pending resolution of the Appeal. The

Court of Appeal reversed, holding that the PMPA is

enforceable only in the federal courts and thus the trial

court had erred in deciding the PMPA issues. The Court

of Appeal Opinion filed May 8, 1988, is attached as

Appendix A. (App. p.1).

10

On July 20, 1988, the California Supreme Court filed

its Summary Order denying review of the Court of

Appeal Decision. A copy of the Order of the California

Supreme Court Denying Review is attached as Appendix

B (App. p.7). Both in arguing the case in the Court of

Appeal and in the Petition for Review in the California

Supreme Court, the PMPA jurisdictional issue and the

nonreviewability of Remand Orders pursuant to Title 28

U.S.C. § 1447(d) issues were raised.

B. Gulf’s Assertion of the Exclusive Federal Juris-

diction Issue.

Following the filing of the dealer’s Complaint Gulf

and Thrifty sought removal on the basis that the dealer’s

claims under the PMPA created a federal question. Fol-

lowing the remand order and the dealer’s Motion for

Summary Adjudication of Issues in October 1983, Gulf

and Thrifty again sought removal on the grounds that the

PMPA was a federal statute, but the district court (Hatter,

J.) held that the court had no jurisdiction over Thrifty

because Thrifty was not a franchisor under the PMPA and

there was no separate and independent controversy as

between Gulf and Thrifty. (602 F.Supp. 874, 881-882 (1984)

(App. C, p.16). Gulf thereafter petitioned the Ninth Cir-

cuit for a Writ of Mandate and Thrifty appealed from the

district court’s remand order. Both the Writ and Petition

were denied (App. D, E) Gulf and Thrifty did not directly

challenge the jurisdiction of the state court to hear the

PMPA violation claims until June of 1987 when they

sought relief in the California Court of Appeal, Second

Appellate District, Division Two, from the Superior Court

Order of December 10, 1984 in favor of the dealers under

the PMPA.

Until Rustom was decided, there was a uniform body

of state and federal law pronouncing the concurrent state

court and federal court jurisdiction for claims brought

under the PMPA. The only federal court decision

addressing the issue held in favor of concurrent state

_

11

court jurisdiction. That case, Ted’s Tire, 470 F. Supp. 163,

supra, one of the first cases decided under the PMPA

following its enactment in 1978, announced that service

station dealers could enforce their rights thereunder in

either a state or federal Court:

“[PMPA] stipulates that a civil action to redress a

violation of the statute ‘may be brought’ in a federal

district court; it does not state that such an action

must be instituted in federal court. 15 U.S.C. § 2805. It

has long been established, that absent any indication

that the federal courts have exclusive jurisdiction

Over a particular subject, federal laws may be

enforced in either the state of federal courts.

* * *

[T]here is nothing in the PMPA which suggests that

the Connneticut Superior Court would not have had

jurisdiction over a complaint brought under the

PMPA.” (Ted's Tire, supra, p. 2 at 165).

The California Courts agreed: Cianci, supra, (“[I]n the

PMPA (15 U.S.C. § 2801, et seq.), for example, Congress

created a private right of action without limiting jurisdic-

tion to Federal Courts”); and the California Court of

Appeal followed suit:

“{Wle are cognizant that the state courts have con-

current jurisdiction to enforce the PMPA.” (California

ARCO Distributors, Inc. v. Atlantic Richfield Corp, 158

Cal.App.3d 349, 364 (1984).

Based upon Cianci, supra, and California ARCO Dis-

tributors, Inc., supra, it has been established law in Cali-

fornia at all relevant times that state courts have

concurrent jurisdiction over the PMPA actions.

After seven years of litigation, two remand orders

and an appeal to the Ninth Circuit Court of Appeals,

throughout which it was uniformly held that this dispute

was properly within the Superior Court, judgment for the

dealers was reversed, solely upon the basis of jurisdiction.

In June, of 1987, almost six years after petitioners brought

this lawsuit, and almost two years after the opinion was

12

filed in Rustom, the first reported case to accept a conten-

tion that federal courts held exclusive jurisdiction to con-

sider claims under the PMPA, Gulf and Thrifty raised this

jurisdictional issue. The Court of Appeal reversed the

trial court, asserting that the California Superior Court

lacked subject matter jurisdiction over the PMPA issues

citing the recent California Court of Appeal decision,

Niakan, supra, a decision based solely upon Rustom with-

out further consideration or analysis of the issue (Appen-

dix A, p.4).

In contrast, the Appellate Court for the State of Penn-

sylvania after much consideration and original analysis

of the issue, rejected the Rustom decision and its logic,

instead following Ted’s Tire in its Johnson opinion. In the

ten years since the PMPA was enacted, Rustom, and

recently Niakan, are the only published decisions to hold

that federal courts have exclusive jurisdiction over PMPA

claims. Every other published opinion analysing issues

under the PMPA has found or assumed concurrent juris-

diction, including Lanham v. Amoco Oil Co., 481 F.Supp.

405 (D.Md. 1979) [remanding litigation to the State Court

forum for trial on the merits]; Johnson v. Mobil Oil Co.,

supra, [rejecting Rustom,]; Frankard v. Amoco Oil Co, 116

Wis. 2d 254, 342 N.W.2d 247 (1983); Walters v. Chevron

U.S.A., Inc., 154 G.App., 636, 269 S.E.2d 495 (1980); Bates

v. Chevron U.S.A., Inc., 151 G.App. 544, 260 S.E.2d 367

(1979); Ricco v. Shell Oil Co., 180 N.J.S. 399, 434 A.2d 1151

(1981); and DeCosta’s Automotive, Inc., v. Birchwood Plaza

Shell, Inc., 482 N.Y.S. 2d 832 (1984).

C. The Court of Appeals Reversal Based Only

Upon the Issue of Jurisdiction in Contravention of Title

28, United States Code § 1447(d).

Although the District Court had remanded this case

twice and the Ninth Circuit Court of Appeal had dis-

missed Defendant’s Appeal of Remand, and in addition

|

13

Defendant’s Petition for Writ of Mandamus, the Californ-

ia Court of Appeal reversed judgment for the dealers on

jurisdictional grounds.

Title 28 of the United States Code § 1447(d) provides:

“An order remanding a case to the state court from

which it was removed is not reviewable on appeal or

otherwise. . . .”

The effect of Title 28 United States Code § 1447(d)

was plainly stated in the often cited case of Chandler v.

O’Brien, 445 F.2d 1045 (10th Circuit 1971), cert. denied,

405 U.S. 964, as follows:

“Thus so far as the question of a forum in which a

case is to be litigated is concerned, the determination

of a federal district court that a case is not removable

and remanding it to the state court is final.”

The present action was removed not once, but on two

separate occasions to the United States district court. On

both occasions, the action was remanded because after

careful review of the issue, the United States district

court determined that there did not exist a separate and

independent controversy as to Thrifty and accordingly,

the proper forum for the dispute was in the state court.

The second remand order was directly appealed to the

Ninth Circuit Court of Appeal. That Appeal was dis-

missed, the Ninth Circuit Court of Appeal citing Ther-

matron, supra, wherein, this Court stated as follows:

“There is no doubt that in order to prevent delay in

the trial of remanded cases by protracted litigation of

jurisdictional issues (citation omitted) Congress immu-

nized from all forms of appellate review any remand order

issued on the grounds specified in § 1447(c), whether or

not that order might be deemed erroneous by an

Appellate Court.” (Emphasis Added) Thermatron,

supra, p.3 at 351.

Notwithstanding the remand orders, over seven

years after this case was first filed, the issue of jurisdic-

tion continues to be litigated.

14

Uniformly, published decisions of both the district

and circuit courts in agreement with this Court have held

that remand orders are immunized from all forms of

appellate review, whether or not the court of appeal

below considers the remand order erroneous as to the

forum in which the dispute should be litigated.

A recent Ninth Circuit Court Opinion has reaffirmed

this entire line of cases. In Kunzi v. Pan American World

Airways, Inc., 833 F.2d 1291 (9th Cir. 1987), the Ninth

Circuit Court of Appeal stated:

“Remand orders issued pursuant to 28 U.S.C.

§ 1447(c) and based on the grounds specified therein,

ie., that removal was improvident and without juris-

diction, are immune from appellate review. (citations

omitted). In such cases, 28 U.S.C. § 1447(d) acts as an

absolute bar to review by appeal or mandamus. (cita-

tion omitted). This prohibition applies even if the

district court’s jurisdictional decision was erro-

neous.” (Emphasis Added) Id. at 1293.

There are no published opinions wherein a state

court of appeal is permitted to review and reverse the

jurisdictional determination of the district court, and, in

fact, all decisions on the issue hold that such an order is

“immune” from review even if the appellate court

believed the order to be in error.

,%

-

REASONS FOR GRANTING THE WRIT

I. Congress Intended that both the State and Fed-

eral Courts have Jurisdiction over PMPA Claims.

The issue presented, whether state courts have juris-

diction to consider claims arising under the PMPA, 15

U.S.C. § 2801 et. seq. is one of great public importance in

that the PMPA affects the nations second largest industry,

the petroleum industry and provides the tens of thou-

sands of retail gasoline station franchisees such as Peti-

tioners whose very livelihood is held in the balance by

the provisions of the PMPA, some measure of protection

ee

15

from the abusive and arbitrary conduct to which the

industry has subjected franchisees. The PMPA was

enacted by Congress in 1978 to protect petroleum fran-

chisees from unfair conduct on the part of the franchisor,

and to eliminate the disparity of bargaining power

between the two.

Various published decisions have commented on the

remedial nature of the PMPA and Congress’ intent to

provide broad protection to service station franchisees

against unfair termination or non-renewal by oil com-

panies. As the Eighth Circuit noted in Roberts v. Amoco Oil

Company, 740 F.2d 602, 604 (8th Cir. 1984):

““In the nation’s second largest industry, the major

oil firms have the gasoline station dealers in virtual

bondage, hinged on the constant threat that their

short term contracts will not be renewed unless they

submit to burdensome franchisor-imposed practices.

* * *

It is generally conceded that the gasoline station

situation is almost hopeless and offers a prime exam-

ple of the worst abuses in franchising.’ ”

The Senate Report reads as follows:

“It is also important to note that often the reasonable

expectations of the parties to a motor fuel franchise

are that the relationship will be a continuing one.

This expectation by the franchisee, in particular, is

often the result of and fostered by, statements and

actions of the franchisor. As a result, non-renewal of

a motor fuel franchise relationship at the expiration

of its term can be almost as punitive as termination

of the franchise during its term. The reasonable

expectations of the franchisee, rather than any defini-

tive contract rights, are destroyed.

* * *

An essential requirement of the federal legislation is

that the grounds for termination and non-renewal

provided by the legislation not be so broad as to

deny franchisees meaningful protection from arbi-

trary or discriminatory termination and non-

16

renewals or prevent fulfillment of the reasonable

renewal expectations of franchisees.” (S. Rep. No.

731, 95th Cong., 2d Sess. 18, reprinted in 1978 U.S.

CODE CONG. & AD. NEWS 873, 874)

An announcement from this Court is necessary, at

this time, to provide effective guidance to the tens of

thousands of retail gasoline station franchisees and their

legal counsel who currently or in the future must deal

with claims under the PMPA. Pending this Court’s inter-

pretation and settlement of the jurisdictional issue,

actions brought by dealers under the provisions of the

PMPA both currently and in the future, face uncertainty.

Many states, such as Pennsylvania may continue to rely

on the language of Ted’s Tire, supra, and California ARCO

Distributors, Inc., supra, and file claims under the PMPA

in state court and expend considerable financial resources

and invest years of their lives seeking to establish their

rights under the PMPA only to face reversal and dis-

missal of their actions based only on the issue of jurisdic-

tion. Other courts, such as California, may follow Rustom,

supra, and its progeny, Niakan, supra, leaving dealers with

no forum in which to enforce rights granted them under

the PMPA in conjunction with state law claims because

district courts, such as the Ninth Circuit, do not exercise

pendent party jurisdiction.

It would seem contrary to the remedial nature of this

legislation to find that federal courts have exclusive juris-

diction thus forcing gasoline station dealers, a great por-

tion of whom are located in extremely rural areas, to hire

expensive big city attorneys in distant cities with little or

no comprehension of the franchisee’s business or the

context in which his problems arise, to represent the

dealer in federal district court regarding violations of the

PMPA. In states such as California, the result adds insult

to injury: the dealer seeking relief under both his state

causes of action and the PMPA must therefore fight his

battles in both the state and federal courts.

©

a |

17

Furthermore, should state courts be found lacking in

jurisdiction to hear claims arising under the PMPA, dis-

trict courts will be burdened by a great deal more PMPA

cases than perhaps presently contemplated. A major com-

ponent of most petroleum franchise relationships, in

addition to the gasoline supply and trademark agree-

ments is a premises lease agreement. Unlawful detainer

actions in connection therewith, are actions frequently

brought by franchisors in terminating a franchise, and

although currentiy brought in state courts, will of neces-

sity be removed to federal district court. The dealer wish-

ing to assert PMPA defenses to an unlawful detainer

action by the franchisor would be required to raise those

questions in the district court. Thus, the impact of exclu-

sive federal jurisdiction would not be limited to dealers

in that it will significantly and, it is contended, needlessly

increase the work load of district courts.

The proponents of exclusive federal court jurisdiction

Over matters arising under PMPA take their cue from a

single federal court opinion, that of Rustom, supra, in

which the district court considered the jurisdictional

issue in light of Valenzuela v. Kraft, Inc., 739 F.2d 434 (9th

Cir. 1984). As heretofore noted the appellate court’s deci-

sion below following Rustom, is inconsistent with the

express language of the statute, all other published fed-

eral and state case precedence, and the pronouncements

of both this Court and the California Court of Appeal.

The court in Valenzuela, dealing with a similarily

vague and ambiguous piece of legislation, Title VII of the

Civil Rights Act held that in the absence of an explicit

statutory directive, exclusive federal jurisdiction may be

implied from the legislative history of the federal act.

Exclusive jurisdiction over Title VII of the Civil Rights

Act was determined to exist based on implications drawn

from the statutory references to federal procedure rules

18

and trom an absence in the legislative history of any

reference to potential state court jurisdiction. (Valenzuela,

supra, 739 F.2d at 436.)

The district court in Rustom, analogizing the jurisdic-

tional language in the PMPA to that of Title VII of the

Civil Rights Act, concluded that the same factors were

present in the PMPA, in the same degree. (Rustom, supra,

p. 3 at 212-213). However, a careful analysis of the Rustom

courts reasoning reveals that it is erroneous because it

rests primarily upon the improper application of guide-

lines announced in Valenzuela to the factors present or

more accurately, absent from the PMPA.

In Valenzuela, the Ninth Circuit reasoned that federal

courts have exclusive jurisdiction over Title VII for two

reasons. First, the legislative history of Title VII refers to

enforcement in federal courts but does not refer to enfor-

cement in state courts. Second, Title VII contains refer-

ences to procedural mechanisms available only in the

federal court system. Similarly, according to Rustom, the

legislative history of the PMPA refers only to enforce-

ment of actions brought in federal court and the PMPA

incorporates substantive standards found in the Federal

Rules of Civil Procedure. A closer examination of the

PMPA reveals that the court’s reasoning in Valenzuela,

does not apply to the PMPA.

In fact, a much better analogy could be made to the

jurisdictional language of any number of other federal

acts, including the Federal Racketeer Influenced and Cor-

rupt Practices Act or the Labor Management Relations

Act of 1947. The California Supreme Court in its Decision

in Cianci, supra, reasoned that concurrent jurisdiction

exists in actions involving the Federal Racketeer Influ-

enced and Corrupt Practices Act citing and relying upon

California ARCO Distributors, Inc., and Ted’s Tire, as exam-

ples of actions involving statutes, (in each instance the

19

PMPA), wherein concurrent jurisdiction existed. The Cali-

fornia Supreme Court in Cianci, supra, said:

“ ‘Congress, . . . may confine jurisdiction to the fed-

eral courts either explicitly or implicitly. Thus, the

presumption of concurrent jurisdiction can be rebutted

by an explicit statutory directive, by unmistakeable impli-

cation from legislative history, or by clear incompatibility

between the state court jurisdiction and federal interest.’

(citation omitted). Put otherwise ‘the presumption is

that jurisdiction is concurrent, and some strong showing

of need for exclusive jurisdiction is required to overcome

that presumption.’” (Citation omitted) (emphasis

added) (Id. at page 910).

The Court in Valenzuela, began its analysis by noting

that while Title VII made affirmative references to actions

being brought in federal court without mentioning

actions brought in state court, that fact was not deter-

minative of jurisdiction. (739 F.2d at 436).

“It is black-letter law, however, that the mere grant of

jurisdiction to a federal court does not operate to

oust the state court from concurrent jurisdiction over

the cause of action.” (Gulf OffShore Corp. v. Mobil Oil

Corp., 453 U.S. 473, 479, 101 S.Ct. 2870, 2875-2876, 69

L.Ed.2d 784 (1981).

Thus, the PMPA’s enforcement provision at 2805:

“such action may be brought without regard to the

amount in controversy, in the district court... ”, cannot

provide the explicit statutory directive of exclusive juris-

diction necessary to rebutt the presumption of concurrent

jurisdiction. (Id. at 478, 101 S.Ct. at 2875).

Additionally, an examination of the PMPA reveals

that there is no statutory directive providing for exclusive

federal jurisdiction. Indeed, the statute is expressly con-

trary to any conclusion that exclusive jurisdiction exists

thereunder.

Pursuant to 15 U.S.C. § 2806, governing the relation-

ship between the statutory provisions of the PMPA, and

State and local laws, Congress expressly authorized and

20

empowered State legislatures to enact statutes which

would be “the same as” the PMPA, as they might relate to

termination and non-renewal of franchise agreements.

Specifically, 15 U.S.C. § 2806(a) provides, in part:

“To the extent that any provision of this sub-chapter

applies to the termination. . . of any franchise, or to

the non-renewal of any franchise relationship, no

state . . . may adopt, enforce or continue in effect

...any law or regulation... unless such provision of

such law relationship is the same as, the applicable

provisions of this chapter.”

Congress has expressly empowered states to enact

statutes the “same as” the PMPA and therefor authorized

petroleum termination dispute litigation in state tribu-

nals. Clearly congress intended that there exist a uniform

body of statutory law, but not that disputes be litigated

exclusively in federal court whether litigation be filed

under the PMPA or parallel state statutes. To conclude,

that the PMPA vests exclusive jurisdiction in federal

courts results in the absurd situation that state and fed-

eral courts have concurrent jurisdiction in substance but

not in form. In other words, state courts can act under

laws that are the “same as” the PMPA and must apply

federal standards, but can only do so under state legisla-

tion. Such a conclusion would frustrate the remedial pur-

poses of the PMPA and is not supported by the plain

language of the PMPA.

To the contrary, the enforcement provisions of 15

U.S.C. § 2805 et. seq., provide that a PMPA claim “may be

brought” in federal court. Use of the discretionary term

“may” is a clear legislative proclaimation that concurrent

jurisdiction shall exist. In Dowd Box Co. v. Courtney, 368

U.S. 502; 82 S.Ct. 519 (1962) the Supreme Court was asked

to decide whether the Labor Management Relations Act

of 1947 granted exclusive jurisdiction to federal courts.

21

Section 301(a) of the Act provided that actions for viola-

tions of the law “may be brought in any district court in

the United States. . . .without respect to the amount in

controversy.” The court, upon examination of the statute

stated that this language “simply gives the federal dis-

trict court jurisdiction over suits for violation of certain

unspecified types of contracts” and that “it does not state

or even suggest that federal jurisidiction shall be exclu-

sive.” It provides suits of the kind described “may” be

brought in the federal district courts, not that they must

be.” (Id. at 506).

The Court in Valenzuela, however relied on “the

absence of reference [in the legislative history] to the

state courts combined with Congress’ affirmative refer-

ences to the federal courts...” (Valenzuela, supra, p. 19 at

436.) Similarly, the Rustom Court analogized that the leg-

islative history of the PMPA “refer[s] only to the mainte-

nance of an action under the PMPA in federal court...”

(Rustom, supra, at 618 F.Supp. at 212).

However, the legislative history is in fact silent in

connection with any stated need for exclusive federal

jurisdiction over actions filed pursuant to the PMPA. A

close look at the legislative history of this Act reveals that

there are only passing references to enforcement in fed-

eral courts of PMPA claims and in fact demonstrates

there exists neither “an unmistakable implication from

legislative history” nor a “clear incompatibility between

state court jurisdiction and federal interests” in favor of

exclusive federal jurisdiction.

While the senates report of the PMPA mentions, in its

summary of major provisions, that the “provisions of

Title 15 are enforceable by private civil actions in the U.S.

District Court.” At no time does the legislative history

provide that such action “shall” or “must” be brought in

the U.S. District Court. Indeed, in the more detailed

section by section analysis of the PMPA, the senate report

22

merely refers to such actions being brought in “the

courts” whether for equitable relief or monetary

damages. 3

“The courts are authorized to grant equitable relief

necessary to remedy the effects of any violation of

the requirements of the legislation. The courts are

instructed to grant preliminary and injunctive

relief .. . the court is barred from issuing permanent

injunctive relief if...” (Emphasis Added). [S. Rep.

No. 731, 95th Cong. 2d Sess. 40, reprinted in 1978 U.S.

CODE CONG. & AD. NEWS 873, 879].

Conspicuously absent from this detailed, section by

section review, is any reference to federal or U.S. District

Courts. Instead, the generic, all encompassing term “the

courts” is used.

The second prong of the Valenzuela reasoning relied

on statutory provisions in Title VII of the Civil Rights Act

which required the Courts to apply federal procedural

rules relating to such matters as requests for injunctive

relief. It is doubtful whether Congress has the constitu-

tional power to require state courts to follow such rules.

(Valenzuela, supra, p. 19 at 436.)

For example, Title VII of the Civil Rights Act requires

preliminary injunctions to be issued “in accordance with

Rule 65 of the Federal Rules of Civil Procedure.” (739

F.2d at 435-36). Furthermore, Courts are required to hear

Title VII cases “at the earliest practicable date and to

cause such cases to be in every way expedited.” (Id. at

436). Because the Valenzuela court did not believe Con-

gress would attempt “to regulate the procedures and

priorities of the State Courts” it concluded that Title VII

contained an unmistakeable implication to vest federal

courts with exclusive jurisdiction.

Unlike Title VII, however, the PMPA does not

attempt to regulate court procedure. While the PMPA

provides that a franchisee who prevails on an action

23

thereunder is entitled to actual damages “consistent with

the Federal Rules of Civil Procedure... ” (15 U.S.C.

§ 2805(d)(1), it is unclear what that reference to the

federal rules means. Rustom gives no indication of the

meaning and there is no reported decision which con-

strues the provision. By implication, the conclusion

would be that damages are to be awarded consistent with

the Federal Rules of Civil Procedure, which state court

tribunals are clearly authorized and capable of doing.

Rustom also relies upon the fact that the PMPA

adopts the second circuit standard for granting prelimi-

nary injunctions. But adopting the standard does not

incorporate Rule 65 into the PMPA. In fact, the standard

incorporated into the PMPA departs from the standard

followed by federal courts generally and the Ninth Cir-

cuit in particular. (See: Moody v. Amoce Oil Company, 734

F.2d 1200, 1216 (7th Circuit, 1984).

The PMPA standards for injunctive relief depart from

the general equity relief standard in that the “equity

standard requires a balance of hardship ‘decidedly’ in

favor of the party seeking the injunction, while the stan-

dard in the act only requires that, on balance, the fran-

chisee suffer comparitively more hardship than the

franchisor.” (Guilderhus v. Amoco Oil Co., 470 F. Supp.

1302, 1304 (D. Mn. 1979).

Contrary to the assertion in Rustom, the Ninth Circuit

in particular, does not apply the PMPA standard for

injunctive relief. In the Ninth Circuit, a preliminary

injunction requires the showing of either (1) a combina-

tion of probable success on the merits and probability of

irreparable injury or (2) serious questions are raised and

the balance of hardship tips sharply in its favor. (See: Los

Angeles Memorial Colliseum Commission v. National Football

League, 634 F.2d 1197, 1201 (9th Cir. 1980)).

24

While Congress may not have power to require state

courts to follow the procedural rules of Title VII, it does

have the power to compel state courts to follow substan-

tive law based upon federal standards as contained in the

PMPA. (See: Emerson v. ].F. Shay Co., 76 Cal.App.3d 579,

589 (1978)).

Clearly, Congress had and did exercise the power to

require state courts to grant preliminary injunctions

based upon a federal standard and to award actual dam-

ages consistent with Federal Rules of Civil Procedure.

Those are not procedural rules, but are provided merely

as guidelines for trial courts to follow and cannot give

rise to state and federal court jurisdictional incom-

patibility such as that created by the language of the Civil

Rights Act, in Valenzuela.

The Rustom courts analogy between the jurisdictional

language of the PMPA and that of Title VII upon closer

examination is not only lacking in factual underpining,

but is illogical. While Congress might justifiably have

been concerned that the protections intended when enact-

ing the Civil Rights Act would not be enforced at the state

court level, that is, by the very states whose long history

of discrimination made necessary the legislation; when

Congress enacted the PMPA, it acted merely to protect

franchisees and end the disparity of bargaining power

between the franchisor and the franchisee. Congress also

intended to establish a uniformity of franchise termina-

tion rules as evidenced by the limited preemption lan-

guage of PMPA, 15 U.S.C. § 2806(a). To conclude

otherwise, that state courts can hear and determine dis-

putes arising out of terminations of petroleum franchises

by applying state law and federal authority, but not

under the PMPA pursuant to concurrent jurisdiction,

makes a judicial mockery out of clear legislative scheme.

That is, to insure only a uniform body of rules or laws

25

governing franchise termination, and not a requirement

that disputes be litigated only in federal courts. This

Court, should find as the Court in Johnson did:

“We perceive no incompatibility between state court

jurisdiction in promoting Congress’ intent to protect

the needs of both franchisees and franchisors, to

remedy disparity and bargaining power and to pre-

vent arbitrary or discriminitory termination or non-

renewal. For the foregoing reasons, we find that a

state court enjoys concurrent jurisdiction over claims

brought under the PMPA.” (citations omitted).

(528 A.2d 164)

II. Remand Orders are binding decisions on the

Courts of California as to the forum in which the

action is to be litigated.

The appellate decision herein, reversing the trial

court judgment in favor of Plaintiffs on purely jurisdic-

tional grounds, substitutes the appellate courts opinion

as to the proper jurisdictional forum. Therefore, this

Court’s guidance is requested to ascertain the correct

application of 28 U.S.C. § 1447(d) to this possibly ambig-

uous and unforeseen circumstance. The district court

herein, not once, but twice, denied possession of the

matter and the Ninth Circuit Court of Appeal subse-

quently dismissed an appeal citing 28 U.S.C. § 1447(d).

The petitioners thereafter, succeeded on the merits in the

state court, only to be met by reversal in the Court of

Appeal, based only on its determination that the United

States district court was the proper forum. Although it

did so without directly reversing, vacating or modifying

that decision, Petitioners herein contend that nevertheless

this constitutes a prohibited review by an appellate court

of a remand order.

26

Judge Hatter’s Order of Remand based upon “the

undisputed material facts and underlying law” (Mem-

orandum Opinion, App. D, p.15) is binding under the

principals of 28 U.S.C. § 1447(d), and is not subject to

review by appeal or otherwise, either directly or

indirectly:

“The decision of the district court that the case does

not envoke the federal jurisdiction and must be

remanded precludes further litigation of the issue of the

forum in which the removed case is to be litigated. (Cita-

tion omitted) (Rath Packing Co. v. Becker, 530 F2d

1295, at 1303 (9th Cir. 1975).)

Explaining the logic behind this rule of law, the

Court in the frequently cited case of Missouri Pacific Rail-

road Company v. Fitzgerald, 160 U.S. 556, 583, 16 S.Ct. 389

(1896) stated:

“So far as the mere question of the forum was con-

cerned, Congress was manifestly of opinion that

determination of the circuit court that jurisdiction

could not be maintained should be final, since it

would be an uncalled for hardship to subject the party

who, not having sought the jurisdiction of the circuit

court, succeeded on the merits in the state court, to the

risk of the reversal of his judgment, not because of error

supervening on the trial, but because of a disputed

question of diverse citizenship had been erroneously

decided by the circuit court... ”

(Missouri, supra, at 583)

That the proceedings in state court following a

remand order are binding upon state courts of appeal and

the highest court of the state, was further spelled out in

Missouri as follows: .

“A state court cannot be held to have decided against

a federal right when it is the circuit court, and not the

state court, which has denied its possession . . . as

under the statute a remanding order of the circuit

court is not reviewable by this Court on Appeal or

writ of error from or to that Court, so it would seem to

follow that it cannot be reviewed on writ of error to a state

27

court, the prohibition being that ‘no appeal or writ of

error from the decision of the circuit court remanding such

cause shall be allowed ...” (Missouri, supra, at 583).

The very fact that the district court specifically

assumed jurisdiction of this matter for purposes of mak-

ing conclusory findings on material issues related

directly to the court’s jurisdiction, demands a conclusion

that concurrent jurisdiction over PMPA claims exist, and

that in fact, the District Court for the Central District of

California has found concurrent jurisdiction exists as to

Petitioner’s claims. The Court of Appeals determination

to the contrary, that jurisdiction lies exclusively in the

federal courts, is therefor at odds both with the prohibi-

tion of § 1447(d) and with the specific determination by

the district court of the jurisdictional issue raised by Gulf.

The District Court’s assumption of jurisdiction could only

occur upon the basis that it found concurrent jurisdiction to

exist because “if it is determined that the removed case is one

over which the federal courts have exclusive jurisdiction, the

federal court cannot hear the action.” (Federal Practice and

Procedures, Wright, Miller, Cooper, § 3722 at p. 284). As

held by this Court in Lambert Run Coal Company v. Bal-

timore and Ohio Railroad Company, 258 U.S. 377; 42 S.Ct.

349 (1922) the federal district court must dismiss a case

that is within its exclusive jurisdiction because when the

state court from which the case is removed did not have

jurisdiction over the claims the federal court cannot

acquire any derivative jurisdiction, and therefore:

“The circuit court of appeals, in remanding the cause

to the district court, should have directed a dismissal for

want of jurisdiction...” (Id. at page 383).

The determination of the court of appeal reversing

judgment for Petitioners on jurisdictional grounds, con-

stituted a prohibited review of the order of remand. If the

Ninth Circuit Court of Appeal would not permit direct

review of the remand order and the determination that

were

28

jurisdiction was properly in the state court, clearly a

collateral review by the California Court of Appeal must

be prohibited also. Where this Court has prohibited itself

from review of a state court proceeding following

remand, including that of the highest court of the state, it

would seem to follow that a state court of appeal is

prohibited also. As annunciated in Browning v. Navarro,

743 F.2d 1069 (Sth Cir. 1984):

“The United States Supreme Court has held that an

order of a district court remanding a cause to the

state court is not reviewable by the Supreme Court

on appeal from a final judgment in the highest Court

of this state. (citations omitted).

‘Even on review in the Supreme Court of a state court

proceeding following remand the propriety of the remand,

in a non-civil rights case, cannot be questioned.” (Brown-

ing v. Navarro, supra, at 1177).

The Court of Appeals reversal of Judgment for Peti-

tioners on jurisdictional grounds although done without

directly questioning the propriety of the remand, consti-

tutes its determination collaterally that jurisdiction was

properly in the federal court, a decision petitioners con-

tend was a form of a prohibited appellate review of the

remand order.

A.

—

CONCLUSION

For the foregoing reasons, it is respectfully submitted

that this Court should grant its Writ of Certiorari to

review the Decision of the California Court of Appeal in

this case. Intervention by this Court is necessary at this

time to resolve the conflict of decisions between both the

courts of appeal and the district courts and more impor-

tantly by reason that the conflict presented relates to an

important question of federal law which has not been,

2

29

but should be settled by this Court: that is, the proper

forum for actions proceeding under the PMPA.

Moreover, it is respectfully requested that this Court

clarify that its many decisions pursuant to 28 U.S.C.

§ 1447(d) prohibiting review of a remand order are appli-

cable at the state court level, and thus orders of remand

are binding decisions upon the issue of jurisdiction.

It is respectfully submitted that the proper develop-

ment of law in this area of great public importance

requires the issue of jurisdiction under the PMPA to be

answered at this time, and further, that a state court

directly or indirectly substituting its opinicn as to the

proper forum of an action where that issue has previ-

ously been decided by a federal court erodes proper

federal control of its jurisdiction. pursuant to 1447(d) thus

requiring this courts intervention.

KENNETH P. ROBERTS

A PROFESSIONAL LAW CORPORATION

By: /s/ Kenneth P. Roberts

Kenneth P. Roberts

Dated: October 17, 1988

App. 1

APPENDIX A

NOT FOR PUBLICATION

IN THE COURT OF APPEAL OF THE

STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

JACK ABADJIAN, MARK BALL, ) B 016989

JOSEPH BROWN, BEN CESON, )

JOHN EGHENIAN, BRAD MAY, ) (Super. Ct. No. C

NASSIR MAZAREI, DONALD 377024 Cons.

PROUSE, AL ROSENSTEIN, with case Nos.

ARAM SHISHMANIAN, JOE C 399330, 406851,

SMIDERLE, AND STEPHEN 406852, 406854,

WEBBER, 406855, 406856,

Plaintiffs and 406857, 406858,

Respondents, 407545, 409749,

v.

GULF OIL CORPORATION,

a Pennsylvania corporation;

THRIFTY OIL CO., a

California corporation, Filed

Defendants and May 8 - 1988

)

)

)

)

)

)

)

) 410941 and 410942.)

)

)

)

)

)

Appellants. Robert M. Wilson

)

)

)

)

)

)

)

)

)

)

)

)

Court of Appeals

Second District

Clerk

BRAD MAY and

ARAM SHISHMANIAN,

Plaintiffs-Cross-

Appellants,

v.

GULF OIL CORPORATION, a

Pennsylvania corporation;

THRIFTY OIL CO.,

a California corporation,

Defendants-Cross-

Respondents.

App. 2

In this protracted dispute among two oil companies

and twelve gasoline station operators, the trial court

ruled in favor of the gas station dealers under the federal

Petroleum Marketing Practices Act, 15 U.S.C. section 2801

et seq. (hereafter “PMPA”). We reverse

The essential facts are undisputed. Prior to 1978 Gulf

Oil Corporation leased some 300 gas stations in its Los

Angeles Division to dealers, and by separate contracts

supplied them with gasoline. In July 1978, having con-

cluded that business was not profitable in Southern Cali-

fornia, Gulf determined to sell its Los Angeles Division

assets. In 1980 Thrifty Oil Company offered to buy all of

Gulf’s Los Angeles Division service stations. A letter

contract dated September 30, 1980, sealed the transaction.

Paragraph 18, subparagraph (c) of the contract stated

that Gulf and Thrifty agreed to abide by the provisions of

the PMPA, insofar as they were applicable. Thrifty and

Gulf swiftly fell into contention concerning what was due

to the dealers under the PMPA.

Gulf sent copies of a letter dated November 24, 1980,

to all of its Los Angeles Division dealers, stating in part:

“{YJou will be giver: notification and the offer required by

the Petroleum Marketing Practice Act to acquire the sta-

tion yourself.” Thrifty protested, disputing that the

PMPA gave the dealers a right of first refusal. Conse-

quently, Gulf asked Thrifty to delay the close of escrow in

order to sort out the various parties’ rights and

obligations.

In August 1981, the dealers filed this action against

Thrifty and Gulf in superior court, alleging in their first

cause of action that the proposed sale was a conspiracy to

App. 3

deny them their right of first refusal under the PMPA,

and seeking a declaration of rights. Gulf cross-com-

Dlained for declaratory relief. Thrifty sued Gulf for

breach of the purchase agreement; the court granted

Gulf’s petition to compel arbitration of Thrifty’s cross-

complaint.

After Gulf and Thrifty twice unsuccessfully

attempted to remove the case to federal court (Abadjian v.

Gulf Oil Corp. (C.D. Cal. 1984) 602 ESupp. 874, 877), the

dealers filed for summary adjudication of issues on

August 20, 1984. On December 10, 1984, the trial court

ruled in favor of the dealers: “The September 30, 1980

agreement between Defendants was an event and an

action that gave to each moving Plaintiff a right of first

refusal to purchase Gulf’s interest in their respective

service stations. [§ Under the [PMPA] Defendant Gulf

was Obligated to offer each moving plaintiff the right as

aforesaid at least 45 days prior to the agreed upon closing

date of the Gulf sale to Thrifty (May 1981).”

On September 11, 1985, the trial court granted Gulf’s

request to sever the first cause of action from the rest of

the complaint. The only remaining issue on that cause of

action was the price to be offered to each dealer for his

gas station. The parties stipulated to the facts from which

the court determined the purchase prices. Thrifty and

Gulf appealed from the resulting judgment. Thrifty also

appealed from the order compelling arbitration.

Two dealers, Brad May and Aram Shishmanian,

cross-appealed. May complained that he was entitled to

purchase all, rather than just a portion of the property

Gulf transferred to Thrifty. Shishmanian objected to being

App. 4

required to pay for improvements Gulf made to his sta-

tion after the action was filed, but before judgment.

In addition, the court awarded the dealers over

$200,000 in costs and attorney fees. Gulf appealed from

this award. All appeals were consolidated. All other pro-

ceedings in the action were stayed pending resolution of

this appeal.

Thrifty and Guif assert that the California superior

court lacked subject matter jurisdiction over the PMPA

issues, because Congress intended the federal courts to

have exclusive jurisdiction under the PMPA. They are

correct. (Niakan v. Samaan (1988) 199 Cal.App.3d 716.)

Since the PMPA is enforceable only in the federal courts,

the trial court erred in deciding the PMPA issues. This

determination disposes of most of the issues on appeal,

as well as the cross-appeals of May and Shishmanian. The

dealers will have to be satisfied with prosecuting their

state law causes of action.

The parties agree that the order granting attorney

fees has no basis other than the PMPA. (15 U.S.C. § 2805,

subd. (d)(1)(C).) Since we have held that the trial court

lacked jurisdiction under the PMPA, it follows that the

trial court lacked power to award attorney fees under the

PMPA.

Finally, Thrifty contends that the trial court erred in

compelling arbitration of its cross-complaint against Gulf.

We agree.

Article 17 of the Gulf-Thrifty contract provides

remedies for each party should the other breach the

purchase agreement. Subdivision (a) states that if Thrifty

App. 5

breaches, Gulf may retain one quarter of the earnest

money as liquidated damages, “provided, however, Guif

may elect not to accept the earnest-money deposit as

liquidated damages, and may instead, avail itself of all

rights, powers and remedies now or hereafter existing at law or

at equity, by statute or otherwise, including the right of

specific performance.” (Emphasis added.) The emphasized

portion of subdivision (a) permits Gulf to go to court to

pursue legal and equitable remedies.

Subdivision (b) states that if Gulf breaches, Thrifty

“may elect not to demand the return of the earnest money

deposit as its sole remedy for Gulf’s breach and may

instead, institute arbitration proceedings against Gulf

pursuant to paragraph 19(e) for the return of its deposit

and such damages (in an amount which shall not, in any

event, exceed One Million Dollars ($1,000,000)) as may be

attributable to such breach of the agreement by Gulf, or

at Buyer’s option avail itself of all rights, powers and

remedies now or hereafter existing at law or at equity, by

statute or otherwise, including the right to specific perfor-

mance.” (Emphasis added.)

The emphasized language in subdivision (b) is iden-

tical to the emphasized language in subdivision (a). Sub-

division (b) states that Thrifty has a choice of arbitration

or legal action if Gulf defaults, just as subdivision (a)

gives Gulf the choice of liquidated damages or legal

action if Thrifty defaults. Equity as well as symmetry and

logic demands it. Therefore, the trial court erred when it

ordered Thrifty and Gulf into arbitration. The choice was

Thrifty’s.

App. 6

The judgment is reversed and remanded with

instructions to dismiss the first cause of action. The

award of attorney fees is reversed. The order compelling

arbitration between Thrifty and Gulf is reversed. The

parties are to bear their own costs on appeal.

NOT FOR PUBLICATION

/s/ Roth, P.J.

ROTH

We concur:

/s/ Gates, J.

GATES

/s/ Fukuto, J.

FUKUTO

App. 7

APPENDIX B

ORDER DENYING REVIEW

AFTER JUDGMENT BY THE COURT OF APPEAL

2nd District, Division 2, No. B018989

S006012

IN THE SUPREME COURT

OF THE STATE OF CALIFORNIA

IN BANK

SUPREME COURT

FILED

JUL 20, 1988

Laurence P. Gill, Clerk

Deputy

ABADJIAN et al., Respondents,

v.

GULF OIL CORP. et. al., Appellants.

and related cases

Respondents’ petition for review DENIED.

Mosk, J., is of the opinion the petition should be

granted.

KAUFMAN

Acting Chief Justice

App. 8

APPENDIX C

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

JACK ABADJIAN, MARK BALL, CV

JOSEPH BROWN, BEN CESON, 83-6686:

JOHN EGHENIAN, BRAD MAY, TJH(Px)

NASSIR MAZAREI, DONALD

PROUSE, AL ROSENSTEIN, HERB MEMO-

SCHWEIZER, ARAM SHISHMANIAN, ) RANDUM

JOE SMIDERLE, AND OPINION

STEPHEN WEBBER,

Plaintiffs, (Filed

v. March 13,

GULF OIL CORPORATION, a —

Pennsylvania corporation;

GULF OIL REAL ESTATE

DEVELOPMENT CORPORATION,

a wholly owned subsidiary of

GULF OIL CORPORATION; ROBERT

W. BALDWIN; J. ROGER KEMPLE;

TOM OTJEN; JOE MAYERS; GEORGE

WILLIAMS; OTTO MEYER; GLEN R.

JENSEN, THRIFTY OIL CO., a

California corporation; and

DOES 1 through 100, inclusive,

Defendants.

AND RELATED CROSS-CLAIMS AND

CONSOLIDATED ACTIONS

a a a a ee ee ee ee ee ee ee ee ee

This cause of action arises from the decision of Gulf

Oil Corporation (“Gulf”) to withdraw from the Southern

California gasoline market and to sell its service stations

in the area to Thrifty Oil Company (“Thrifty”). With the

exception of plaintiff Herb Schweizer,’ each plaintiff

—e llrr—“—i—SOTCS

App. 9

occupies and operates a gasoline service station under a

lease originally executed with Gulf before June, 1978.

Plaintiffs can be classified into two subgroups according

to the marketing plan they have adopted from Gulf. Some

of the plaintiffs oeprate their leased service stations

under a single supply agreement with Gulf and market

fuel purchased from the company using its trademark,

trade name and symbol.” The remaining plaintiffs operate

“unbranded” service stations pursuant to several contin-

uous supply agreements with Gulf. All these stations

were included in the service stations Gulf agreed to sell

to Thrifty.

The “unbranded” operators allegedly discontinued

their use of Gulf trademarks and symbols on the sugges-

tion of the company. Plaintiffs contend that because Gulf

had difficulty competing in the Southern California mar-

ket it decided to create a debranding program for its

independent operators. The first amended complaint

alleges that in January, 1978, Gulf called a general opera-

tors meeting which several plaintiffs attended. (See First

Amended Complaint, §14.) According to plaintiffs, Gulf

anounced a new marketing program at this meeting,

whereby branded Gulf service station operators would

debrand their stations and sell Gulf motor fuel without

the benefit of trademarks and logos. (See First Amended

Complaint, §14.) In exchange, Gulf allegedly promised

the proposed debranded operators an increased supply of

motor fuel at reduced rates, if they agreed to the new

marketing plan. Id. Consequently, several operators

agreed to adopt this plan.

Following the announced debranding program, Gulf

prepared to sell its assets in the Southern California

App. 10

market to another oil distributor. In 1979, Gulf initially

planned to see all of its assets located in the Los Angeles

Division, which covered the states of Arizona, California,

and Nevada, as part of a “package deal”. The available

package included Gulf’s asphalt plants, its Santa Fe

Springs Refinery, and more than three hundred service

stations, including the stations leased to the plaintiffs. By

September, 1980, Gulf had accepted an offer from Thrifty

covering the leased service stations (rather than the entire

“package deal”) and the parties executed a written agree-

ment (the “1980 Letter Agreement”) acknowledging the

proposed transaction.

After Gulf notified the independent operators about

the Thrifty sale, the relationship between Gulf and the

independent operators deteriorated. In August 1981,

plaintiffs filed their original complaint in state court

alleging several violations of state and federal law. Most

of the counts in the complaint were premised on state

law. The state counts involved claims for fraud, violations

of the California Franchise Investment Law, estoppel,

unfair competition and requests for declaratory and

injunctive relief arising from an alleged conspiracy

between Gulf and Thrifty to violate plaintiffs’ rights

under both state and federal law. Thrifty sought unlawful

detainer actions against the leasees as their new landlord.

The alleged federal question jurisdiction arises from

plaintiffs’ claim that the September, 1980, sales agreement

between Thrifty and Gulf terminated plaintiffs’ fran-

chises and obligated Gulf, under the provisions of the

Petroleum Marketing Practices Act (the “PMPA”), 15

U.S.C. § 2801 et. seq., to offer plaintiffs first refusal rights

before closing the Thrifty sale. In opposition, Gulf argues:

App. 11

(1) whether there is a franchise relationship with each

plaintiff, and (2) if yes, then the franchise relationship has

been assigned to Thrifty as part of the sale of assets

transaction. Thus, the defendants claim none of plaintiffs’

rights have been violated under the PMPA.

In November, 1981, defendants first petitioned for

removal to federal court asserting that the amended state

complaint alleged a federal question under the PMPA.

However, this Court remanded the entire case to state

court for the following reasons. First, the Court found

jurisdiction over Thrifty unattainable under the Act since

Thrifty is not plaintiffs’ franchisor. Secondly, the Court

found jurisdiction over the claims against Gulf could not

be maintained because it could not sever Gulf’s claims

from the nonremovable claims against Thrifty. Finally, the

Court remanded on the grounds that the Ninth Circuit

does not recognize pendent party jurisdiction. See

Aldinger v. Howard, 513 F.2d (9th Cir. 1975), aff'd. 427 US.

1 (1976).

Defendants now seek a second opportunity at

removal. This most recent removal petition, filed October

17, 1983, contends that plaintiffs’ October, 1983, filing of a

motion for summary adjudication in state court under the

PMPA justifies removal to federal court. At the subse-

quent removal hearing, the Court requested additional

information concerning the merits of defendants’ claim

that Thrifty is a franchisor as contemplated under the

Act. Defendants submit the Santa Fe Springs Refinery

Contract (“SFSR Contract”), which assigns Gulf’s rights

in supply agreements with independent dealer-operators

to Thrifty, as proof supporting their renewed claim of

federal jurisdiction of the counts relating to Thrifty. Thus,

App. 12

the Court faces a reconsideration of its earlier remand

order and addresses the issue of defendant’s timeliness in

this second removal petition.

Timeliness of the Present Removal Petition

Plaintiffs are generally considered the masters of

their complaints and free to decide the forum in which to

bring an action. However, Congress has provided a mech-

anism for a defendant to gain access to a federal tribunal

though the plaintiff brings his action in state court. Under

the removal statute, a defendant need only show that the

removal petition is timely filed and that a federal court

has original jurisdiction over the action. 28 U.S.C.

§ §1446(b) and 1446(a).

Section 1446(b) sets forth a thirty day limitation for

filing a petition once a basis for removability exists. Here,

plaintiffs assert that defendants second removal petition,

filed October 17, 1983, is untimely and should relate back

to the filing date for the original complaint, not the date

when plaintiffs filed for summary adjudication in state

court. Thus, plaintiffs argue this Court lacks jurisdiction

over the petition.

However, the statutory time limit for removal peti-

tions is merely a “formal and modal requirement”; it is

not jurisdictional. See Fristoe v. Reynolds Metal Co., 615

F2d 1209, 1212 (9th Cir. 1980); 1A Moore’s Federal Practice

and Procedure ¥ 0.168[3.-5] (1974 ed.). Even if the Court

adopted the relation back argument, plaintiffs would be

estopped from objecting to the timeliness of the removal

petition, since defendants’ present petition for removal is

based on plaintiffs’ own October 5, 1983 motion for sum-

mary adjudication of actions arising “under PMPA.” Id.

oi steeped

j

aia

App. 13

At a minimum, the court may find that plaintiffs most

recent summary judgment motion extends the time

period for defendants to file a removal petition. More-

over, the plain language of the removal statute provides

that the thirty day period commences after defendants

receive “a copy of an amended pleading, motion, order or

other paper” from which removability can be ascertained.

§ 1446(b) (emphasis added). Thus, de.endants’ petition

falls within the necessary time limitation.

Theories for Removability

In a removal action action involving multiple defen-

dants, movants can invoke several theories to support

federal jurisdiction. They can remove on the grounds that

the cause of action arises under federal law, or they can

rely on diversity of citizenship, or they can remove under

the pendent party theory. 28 U.S.C. § 1441; See also

Aldinger v. Howard, 513 F.2d 1257 (9th Cir. 1975), aff’d., 427

U.S. 1 (1976); Schroeder v. TransWorld Airlines, Inc., 702

F.2d 189, 191 (9th Cir. 1983). In the present action, diver-

sity and pendent party jurisdiction are unavailable to

these defendants. The complaint indicates that several

defendants, including Thrifty, are California residents or

citizens, thus, complete diversity does not exist as to

them. In addition, the Ninth Circuit strongly disapproves

of pendent party jurisdiction unless the parties can show

an independent ground of jurisdiction exists over the

claims against against the pendent party. See, Benson v.

U.S. Small Business Administration, 644 F.2d 1366, 1367

(9th Cir. 1981); Libby, McNeil, and Libby v. City National

Bank, 592 F.2d 504, 510 (9th Cir. 1978); Avala v. United

States, 550 F.2d 1196 (9th Cir. 1977). Therefore, this

App. 14

Court’s decision on removability turns on the federal

character of the claims against Thrifty.?

The Merits of Federal

Jurisdiction in this Case

Federal jurisdiction under the PMPA must be

decided on the merits because the jurisdictional issue and

substantive issues are so intertwined with the resolution

of crucial facts. Sun Valley Gasoline, Inc. v. Ernst Enter-

prises, Inc., 711 F.2d 138, 139 (9th Cir. 1983). In PMPA

cases, the Ninth Circuit has instructed the district courts

to avoid dismissal for lack of subject matter jurisdiction

solely on the face of the pleadings. Id. at 139-40. Relying

on the Sun Valley holding, defendants contend the Ninth

Circuit has prohibited jurisdictional fact finding under

PMPA without a trial on the merits. Thus, they argue that

by asserting a federal claim against Thrifty on the face of

their papers plaintiffs have created a jurisdictional issue

which must be resolved at trial.

This Court does not read the holding of Sun Valley as

broadly as defendants wish. In ruling on a challenge to

subject matter jurisdiction, a district court is ordinarily

free to hear evidence regarding jurisdiction before trial,

resolving factual disputes where necessary. Augustine v.

United States, 704 F.2d 1074, 1077 (9th Cir. 1983); Thornhill

Publishing Co. v. General Telephone and Electronics Corp.,

594 F.2d 730, 733 (9th Cir. 979). Courts have been careful to

distinguish between the standards of jurisdictional analysis

under motions to dismiss and jurisdictional fact finding in

summary judgment proceedings. Augustine, 704 F.2d at

733-34. In Sun Valley, the district court dismissed,

pursuant to Fed. R. Civ. P. 12(h)(3), ten counts of the

|

App. 15

complaint that alleged PMPA violations on the grounds

defendant noted the absence in the complaint of an alle-

gation regarding defendants ability to use a refiner’s

trademark, commonly referred to as “branding author-

ity.” Sun Valley, 711 F.2d at 139. Later, the court of appeals

refused to uphold the dismissal of the PMPA claims

without specific jurisdictional fact finding by the court

under the Act. Id. at 141. However, the court of appeals

left open the district court’s ability to resolve PMPA

jurisdictional questions in summary judgment proceed-

ings by noting, “[w]le do not exclude the possibility that

these claims may be suitable for Rule 56 disposition.” Id.

In an exemplary pretrial proceeding where the party

seeking dismissal prevailed, the court had an opportunity

to develop substantial evidence on the interrelated juris-

dictional and factual issues under the rigorous standards

of Rule 56. See Thornhill, 594 F.2d at 735-36 (Sherman Act

case in which Ninth Circuit affirmed summary judgment

on the issue of interstate commerce under the Act after

reviewing deposition testimony and exhibits). Similarly,

in the instant case, this Court has had an opportunity to

conduct an extensive review of the record and of matters

outside the pleadings to resolve the material issues. The

parties seeking remand will prevail on the basis of the

undisputed material facts and underlying law. However,

my decision is limited solely to the questions relating to

jurisdiction over the claims against Thrifty.

The purpose of PMPA is to establish “minimum Fed-

eral Standards governing the termination and non-

renewal of franchise relationships for the sale of motor

fuel by the franchisor or supplier of such fuel.” Checkrite

Petroleum, Inc. v. Amoco Oil Co., 678 F.2d 5, 7 (2d Cir.

App. 16

1982), quoting S. Rep. No. 95-731, 95th Cong., 2d Sess. 15,

reprinted in [1978] U.S. Code Cong. & Ad. News 873

(emphasis added). Congress enacted PMPA to protect

franchisees from arbitrary or discriminatory termination

of their franchises. S. Rep. No. 95-731, supra at 874. The

Act limits the termination of any franchise except on the

specifically enumerated grounds and upon compliance

with notice requirements. 15 U.S.C. § §2802(a), (b)(1).

Crucial elements that extend jurisdiction under the Act

are the existence of a franchise relationship and the

occurrence of an event within the regulatory scheme of

the statute. See 15 U.S.C. §2802.

The status of Gulf as plaintiffs’ initial franchisor is

undisputed. Both the branded and unbranded dealers

operated their stations under supply agreements with

Gulf which predated June, 1978. Even the unbranded

dealers sold Gulf gasoline under the company’s trade

name before the new marketing program in 1978. Thus,

the branded dealers operate under a franchise agreement

described in 15 U.S.C. §2801(1)(A); the unbranded dealers

operate under a franchise within the reach of 15 U.S.C.

§ 2801(1)(B) (ii)(II). The triggering event for PMPA juris-

diction over these dealers arose when Gulf allegedly

terminated the dealers franchises. The claims against

Thrifty arises from the same nucleus of facts. Therefore,

defendants can properly remove this action only if inde-

pendent grounds of federal jurisdiction can be estab-

lished over Thrifty.

The absence of an independent franchise agreement

between Thrifty and plaintiffs defeated defendant's first

attempt at removal. Defendants now contend that Gulf’s

assignment under the SFSR contract to Thrifty created a

App. 17

“franchise relationship” between Thrifty and plaintiffs.

However, the record lacks any evidence of a subsequent

contract between Thrifty and plaintiffs; the record lacks

any proof of a marketing plan by Thrifty for plaintiffs;

finally, the parties do not mention the existence of any

franchise fee imposed upon plaintiffs by Thrifty. All of

the above items are essentially components of a franchise

agreement. See e.g. Cal. Corp. Code §31005 (West 1977);

See also 34 Cal. Jur. 3d, Franchise, Distribution, and Dealer-

ship Contracts §1 (3d ed. 1977).

Moreover, the issue of Thrifty’s lack of Gulf trade-

mark rights is undisputed. Thrifty generally asserts that

the SFSR contract included “branding authority or trade-

mark rights”, but it points to the specific terms of that

agreement noting, “Although, in general, ‘Gulf indicia’

are excluded from the sale under paragraph 2.07 of the

SFSR Contract. . . .” See Thrifty’s Supplemental Mem-

orandum In Support of Jurisdiction at 4.4 This Gulf indi-

cia represents the trademark rights essential to finding a

valid franchise relationship. See 15 U.S.C. § §2801 (1)(B)(i)

and (2).°

In defining the “franchise relationship” under PMPA,

the Congress recognized the interrelated nature of the

leased premises with the motor fuel supply agreement in

petroleum franchises. The Senate noted:

The franchise relationship in the petroleum

industry is unusual, in fact perhaps unique, in that

the franchisor commonly not only grants a trademark

license, but often controls, and leases to the fran-

chisee, the real estate premises used by the fran-

chisee. In addition, the franchisor almost always is

the primary, even exclusive, supplier of the fran-

chisee’s principal item: motor fuel.

App. 18

S. Rep. No. 95-731, 95th Cong., 2d Sess. 17, reprinted in

1978 U.S. Code Cong. & Ad. News 873, 875. Thus, it

appears at first glance that Congress intended PMPA to

reach every motor fuel supply agreement where the sup-

plier is the primary source of fuel or the exclusive sour ..

This broad reading of the statute could bring Thrifty

within the definition of a franchisor “but for” the limiting

language noted further in the legislative history. “The

term ‘franchise’ is defined in terms of a motor fuel trade-

mark license. It should be noted that the term is applica-

ble only to the use of a trademark which is owned or

controlled by a refiner.” Supra at 888 (emphasis added).

Although the Ninth Circuit remains silent on

whether branding authority is essential to the existence

of a franchise relationship under PMPA, see Sun Valley,

711 F.2d at 141, most courts favor the express need for

granting trademark use to support a finding of a fran-

chise relationship. See Lasko v. Consumers Petroleum of

Connecticut, Inc., 547 F. Supp. 211, 219 (D. Conn. 1981)

(implying necessity of branding authority), and Blackwell

v. Power Test Corp., 540 F. Supp. 802, 807 (D.N.J. 1981)

(SAME), aff’d. mem., 688 F.2d 818 (3d Cir. 1982). Given the

emphasis placed on the use of trademark rights in PMPA

cases, only two alternative theories could possibly pro-

vide jurisdiction over Thrifty absent branding authority

by Gulf. Either the Court must find (1) a valid assignment

of the franchise relationship by Gulf to Thrifty, or (2) it

must find that Gulf and Thrifty’s sales transaction

involved a less than arms length deal between the par-

ties. See Bsales v. Texaco, Inc., 516 F. Supp. 655, 661 (D.N.J.

1981) (cited for the latter proposition).

}

App. 19

The legislative history of PMPA allows the assign-

ability of a petroleum franchise as provided by state law.

S. Rep. No. 95-731, supra at 901. In the absence of an

express agreement, the applicable California statutes

“clearly manifest a policy in favor of the free trans-

ferability of all types of property, including rights under

contracts.” Farmland Irrigation Co. v. Dopplmaier, 48 Cal.

2d 208, 222, 308 P.2d 732, 740 (1957); See Cal. Civ. Code

§14581 (West 1982); see also, Cal. Comm. Code § 2210

(West 1968). But, a closer analysis of the PMPA legisla-

tive history reveals a district court’s ability to invoke its

equitable powers and preempt state law on assignability

to comply with the overall scheme of the Act:

[T]here is an area in which Federal termination pro-

visions under this legislation and state-granted rights

of assignability of a franchise man conflict. It is

intended that the harmonizing of these competing

interests be left to judicial balancing of competing

equities on a case-by-case basis. No hard and fast

statutory rule would accomplish the desired goal of

harmonizing the competing statutory objectives as

equitably as application of general principles of

equity to specific fact situations.

S. Rep. No. 95-731, supra at 901.

Under PMPA, a franchisor’s withdrawal from a rele-

vant geographic market can amount to a termination of

non-renewal of the franchise agreement that triggers both

notice and first refusal rights for franchisors. See 15

U.S.C. §2802(b)(2)(E). The undisputed facts indicate that

Gulf intended to seel all its assets in the Los Angeles

Division and to withdraw from the highly competitive

Southern California gasoline market.? The subsequent

actions taken to see plaintiffs’ leased premises and the

; =

App. 20

Santa Fe Springs Refinery are incidental to Gulf’s stated

purpose: market withdrawal. For this Court to find that

the “package deal” involving Thrifty amounted to an

assignment of the “franchise relationship,” and not a

market withdrawal, would result in the complete circum-

vention of the Act. Thus, it is my determination view that

Thrifty cannot hold the same status as a franchisor to

these plaintiffs as held by Gulf. At most, Thrifty may

have an assignment of the leased premises under state

law if Gulf complied with PMPA in the first instance.

As a general rule, a contractual relationship between

the individual parties is a precondition for jurisdiction

under PMPA. See Bsales, 516 F. Supp. at 662 N.4. How-

ever, a second alternative theory for PMPA jurisdiction

over a noncontractual third party such as Thrifty involves

a judicially recognized, narrow exception to the franchise

relationship rule. In Bsales, the district court implied in

dicta that through an “extraordinary situation” a landlord

of premises used in a franchise operation may owe cer-

tain duties to the franchisee, even though the landlord is

not a franchisor. 516 F. Supp. at 661. The district court

noted:

{I]f the landlord and the franchisor enter into a lease

which is not the product of arm’s length negotiations

and that lease expires and is not renewed, then the

franchisee may have a cause of action [under PMPA

against both the franchisor and the landlord. Sim-

ilarly, the absence of an arm’s length relationship

between the franchisor and the landlord at the time

that an option to renew a lease is under consideration

might give the franchisee rights against both parties,

if the option is not exercised.

Id. at 661 (emphasis added)

App. 21

In Bsales, similar to the allegations in this case, plain-

tiffs alleged a conspiracy existed between the franchisor

and the landlord to deprive plaintiffs of their rights

under PMPA. The district court did not find a conspiracy

between the parties in the absence of “direct and explicit

evidence of such a conspiracy.” 516 F. Supp. at 662. The

court concluded that an inference of a conspiracy could

not be made merely by an allegation that the defendants

negotiated with their own interest in mind, absent proof

that the franchisor exercised control over the new land-

lord. Id. at 662-63. Even a party’s negotiating in bad faith

is not actionable under this theory. Id. at 663 n. 8.

The instant plaintiffs argue that defendants con-

spired to terminate their service station leases and

deprive plaintiffs’ of their first refusal right under PMPA.

(See First Amended Complaint 733b.) The only evidence

plaintiffs allege establishes a conspiracy between defen

dants Thrifty and Gulf is the SFSR contract and the

September 1980 letter agreement, but the undisputed

facts demonstrate these agreements resulted from vig-

orous negotiations to purchase Gulf’s Los Angeles Divi-

sion assets after Gulf decided to withdraw from that

market. Although Gulf and Thrifty entered into a sales

agreement that included the stations leased by plaintiffs,

this Court finds plaintiffs have offered no evidence estab-

lishing an intent by either defendant to circumvent the

Act. Nor is there any evidence that Gulf in any way

controlled Thrifty’s actions during their negotiations or

anytime afterwards. While the complaint properly

alleges, inter alia, Gulf failed to comply with the notice,

termination, and first refusal rights of plaintiffs as

é

:

baal nia

App. 22

required by PMPA, these allegations are unrelated to any

proven conspiracy between Gulf and Thrifty.

be

bd

CONCLUSION

Having decided that the claims against Thrifty do not

arise under PMPA, the Court no longer has an indepen-

dent basis of subject matter jurisdiction to entertain

plaintiffs state law claims against Thrifty. Limitations on

the Court’s power to exercise “pendent party” jurisdic-

tion and the interrelatedness of the claims against all the

defendants requires this Court to remand the entire case.

Thus, the motions of plaintiffs for remand to state court

are granted and the Court does not make any further

findings.

Date: March 9, 1984

Terry J. Hatter, Jr.

TERRY J. HATTER, JR.

United States District Judge

,%

FOOTNOTES

1. Plaintiff Herb Schweizer was one of several Gulf

dealers to whom Gulf offered a right of first refusal to

acquire its interest in the service station. Schweizer

accepted Gulf’s offer and thus has no claim against it

for noncompliance with the Petroleum Marketing

Practices Act, 15 U.S.C. §2801 et seq.

2. These plaintiffs are catagorized as “branded dealers.”

They are identified as Jack Abadjian, Brad May, and

Al Rosenstein.

witr —

App. 23

3. Since the Court has already determined that the

claims against Gulf and Thrifty are inextricably inter-

twined, removability under 28 U.S.C. §1441(c) is also

unavailable to these defendants. Section 1441(c) pro-

vides that a separate and independent federal claim

: may be joined with otherwise nonremovable state

| claims, thereby permitting removal of an entire action

to federal court.

4. In addition, Barry W. Berkett, Vice President and

Assistant Secretary of Thrifty Oil Co., testified

through deposition testimony that he was unaware of

any of the plaintiffs ever purchasing motor fuel from

Thrifty as of December 2, 1983 (Berkett deposition at

16).

5. Thrifty has not, as of December 2, 1983, granted any

of the plaintiffs the right to utilize the Gulf trademark

(Burkett deposition at 36).

6. A contract may be nonassignable if the duties

imposed upon one party is of such a personal nature

that their performance by someone else would in

effect deprive the contracting party of the benefit of

its bargain. See Dopplmaier, 48 Cal.2d at 222, 308 P.2d

at 740. It is possible that a franchise agreement

involving trademark rights is such a contract, how-

ever, the present decision rests strictly on an inter-

pretation of the federal statute invc ved in this case

leaving questions of franchise agreement assign-

ability to the state court for its resolution.

7. See I. Roger Kemple’s deposition testimony at 78-79;

99-100.

4

3

a _— rd Le

App. 24

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JACK ABADJIAN, et al., ) No. 84-5831

Plaintiffs-Appellees, )

) DC# CV 83-6686 TJH

VS. ) Central California

THRIFTY OIL COMPANY, ‘eae

Defendant/ Appellant,

)

GULF OIL CORPORATION, a) jun" 3, 1984

Pennsylvania corporation, et al., ) is

Defendants.

AND RELATED CROSS- )

CLAIMS AND )

CONSOLIDATED ACTIONS )

Before: KENNEDY, ALARCON and FERGUSON, Circuit

Judges

The appeal from the district court remand order is

dismissed. Thermatron Products, Inc. v. Hermansdorfer, 423

U.S. 343, 346 (1975).

App. 25

APPENDIX E

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GULF OIL CORPORATION, a_) No. 84-7330

Pennsylvania corporation, et al., )

Petitioners, ) DC# CV 83-6686 TJH

) Central California

vs. )

UNITED STATES DISTRICT ) ORDER

COURT FOR THE CENTRAL ) FILED

DISTRICT OF CALIFORNIA, ) Aug 22, 1984

Respondent, PHILLIP B.

)

JACK ABADJIAN, et al., ) WINBERRY

Real Parties in Interest ) Clerk, U.S. Court of

, ) Appeals

Before: ANDERSON, FARRIS and BOOCHEVER, Circuit

Judges

The petition for writ of mandate is denied. Petitioner

has not met the requirements of this circuit for extraordi-

nary relief. See Bauman v. United States District Court, 557

F.2d 650 (9th Cir. 1977)

App. 26

APPENDIX F

SUPERIOR COURT OF CALIFORNIA, COUNTY

OF LOS ANGELES

Date DECEMBER 10, 1984

HONORABLE RONALD E. SWEARINGER JUDGE

___ Deputy Sherriff __, Deputy Clerk

A.CARRASCO Court Attendant C HERNANDEZ,

Reporter

NONE (Parties and

counsel! checked if

present)

C 377 024 C/W C399330, C406851, Counsel for

C406852, C406853, C406854, Plaintiff

C406855, C406857, C406858,

C407545, C409749, C410941, Counsel for

C410942 Defendant

JACK ABADJIAN, et al

VS

GULF OIL CORPORATION, et al

NATURE OF PROCEEDINGS:

RULING ON MOTIONS FOR SUMMARY JUDGMENT

The matters having been argued and submitted and the

Court having considered the contents of the moving and

responding papers and the authorities therein cited rules

as follows:

PLAINTIFF’S MOTION:

Plaintiff’s motion is granted. The Court finds the follow-

ing issues to be without substantial controversy and are

established in favor of Plaintiffs and against Defendants;

a. The September 30, 1980 agreement between Defen-

dants was an event and an action that gave to each

moving Plaintiff a right of first refusal to purchase Gulf’s

interest in their respective service stations.

App. 27

b. Under the PMPA Defendant Gulf was obligated to

offer each moving Plaintiff the right as aforesaid at least

45 days prior to the agreed upon closing date of the Gulf

sale to Thrifty (may 1981).

GULF’S MOTION FOR SUMMARY JUDGMENT:

Gulf contends that Plaintiffs may not obtain state court

relief for alleged franchise discontinuance because relief

has not been sought under PMPA. Gulf further contends

that PMPA preempts any state law dealing with alleged

franchise termination.

Plaintiffs contend that they may obtain state court relief

on the gravamens alleged in their complaints. The Court

agrees. Counts 1, 6 and 7 relate to rights under the PMPA

and PMPA Jurisdiction is not exclusively in the Federal

Courts in the context of this proceeding.

Plaintiffs concede that to the extent that they have claims

under Section 20999.1 Business and Professions Code,

that Section has been preempted by the PMPA.

Count 2 is particulary preempted. Counts, 3, 4 and 5 are

not based on alleged franchise termination as per PMPA

but relate to other gravamen.

The moving party asks the Court to determine that the

PMPA has preempted the field, contends that plaintiffs

have taken the position that they are not proceeding

under PMPA and that certain causes of action may not be

pursued. The Court concludes that moving party is

incorrect.

Ol

App. 28

The motion is a hybrid, but the issues presented may be

decided by the Court pursuant to Beech Aircraft v. Superior

Court (1976) 61 Cal. App. 3d 501, 516.

The motion is denied.

THRIFTY’S MOTION FOR SUMMARY JUDGMENT RE

IMPAIRMENT:

Thrifty contends that if Section 20999.25, Business and

Profession Code were applied to the dispute, the obliga-

tion of the Gulf/Thrifty contract would be impaired since

the Section was not in effect when the agreement was

made.

This issue is moot since PMPA preempts Business and

Professions Code Section 20999.25 (Cal Arco Distributors

V. Atlantic Richfield) and Plaintiffs acknoledge this.

The motion is denied.

THRIFTY’S MOTION RE TERMINATION:

The motion is denied, the basis for the motion being

obviated by the Court’s ruling as to Plaintiffs’ motion.

lt is to be noted that the question of “termination” pre-

sented in the case does not relate to ordinary termination

but must be considered in the context of the Petroleum

Marketing Practices Act and the Court notes and concurs

in the finding of Judge Terry Hatter of the United States

District Court that Thrifty cannot be considered as a

successor franchisor by assignment.

Copies of this minute order are mailed Via U.S. mail

addressed as follows:

App. 29

JACK D. FUDGE

RALPH ZAREFSKY

LOUIS A. KARASIK

MARY E. TARDUNO

McCutchen, Black, Verleger & Shea

600 Wilshire Boulevard

Los Angeles, California 90017;

KENNETH P. ROBERTS, ESQUIRE

Shapiro, Laufer, Krane, Jacobson & Posell

2029 Century Park East

Suite 2600

Los Angeles, California 90067;

DONALD C. SMALTZ, ESQUIRE

Smaltz & Nelley

530 West Sixth Street

10th Floor

Los Angeles, California 90051/.

App. 30

APPENDIX G

PETROLEUM MARKETING PRACTICES ACT,

15 U.S.C. §§ 2801-2806

SUBCHAPTER I~FRANCHISE PROTECTION

§ 2801. Definitions

As used in this subchapter:

(1A) The term “franchise” means any contract-

(i) between a refiner and a distributor.

(ii) between a refiner and a retailer,

(iii) between a distributor and another distribu-

tor, or

(iv) between a distributor and a retailer,

under which a refiner or distributor (as the case may be)

authorizes or permits a retailor or distributor to use, in

connection with the sale, consignment, or distribution of

motor fuel, a trademark which is owned or controlled by

such refiner or by a refiner which supplies motor fuel to

the distributor which authorizes or permits such use.

(B) The term “franchise” includes—

(i) any contract under which a retailer or dis-

tributor (as the case may be) is authorized or permit-

ted to occupy leased marketing premises, which

premises are to be employed in connection with the

sale, consignment, or distribution of motor fuel

under a trademark which is owned or controlled by

such refiner or by a refiner which supplies motor fuel

to the distributor which authorizes or permits such

occupancy;

(ii) any contract pertaining to the supply of

motor fuel which is to be sold, consigned or distrib-

uted-

App. 31

(I) under a trademark owned or controlled by

a refiner; or

(II) under a contract which has existed con-

tinuously since May 15, 1973, and pursuant to

which, on May 15, 1973, motor fuel was sold, con-

signed or distributed under a trademark owned or

controlled on stich date by a refiner; and

(III) the unexpired portion of any franchise, as

defined by the preceding provisions of this para-

graph, which is transferred or assigned as authorized

by the provisions of such franchise or by any applica-

ble provision of State law which permits such trans-

fer or assignment without regard to any provision of

the franchise.

(2) The term “franchise relationship” means the

respective motor fuel marketing or distribution obliga-

tions and responsibilities of a franchisor and a franchisee

which result from the marketing of motor fuel under a

franchise.

(3) The term “franchisor” means a refiner of distrib-

utor (as the case may be) who authorizes or permits,

under a franchise, a retailer or distributor to use a trade-

mark in connection with the sale, consignment, or distri-

bution of motor fuel.

(4) The term “franchisee” means a retailer or dis-

tributor (as the case may be) who is authorized or permit-

ted, under a franchise, to use a trademark in connection

with the sale, consignment, or distribution of motor fuel.

(5) The term “refiner” means any person engaged in

the refining of crude oil to produce motor fuel, and

includes any affiliate of such person.

App. 32

(6) The term “distributor” means any person,

including any affiliate of such person, who-

(A) purchases motor fuel for sale, consign-

ment, or distribution to another; or

(B) receives motor fuel on consignment for

consignment or distribution to his own motor fuel

accounts or to accounts of his supplier, but shall

not include a person who is an employee of, or

merely serves as a common carrier providing trans-

portation service for, such supplier.

(7) The term “retailer” means any person who pru-

chases motor fuel for sale to the generai public for ulti-

mate consumption.

(8) The term “marketing premises” means, in the

case of any franchise, premises which, under said fran-

chise, are to be employed by the franchisee in connection

with the sale, consignment, or distribution of motor fuel.

(9) The term “leased marketing premises” means

marketing premises owned, leased, or in any way con-

trolled by a franchisor and which the franchisee is autho-

rized or permitted, under the franchise, to employ in

connection with the sale, consignment, or distribution of

motor fuel.

(10) The term “contract” means any oral or written

agreement. For supply purposes, delivery levels during

the same month of the previous year shall be prima facie

evidence of an agreement to deliver such levels.

(11) The term “trademark” means any trademark,

trade name, service mark, or other identifying symbol or

name.

,

App. 33

(12) The term “motor fuel” means gasoline and die-

sel fuel of a type distributed for use as a fuel in self-

propelled vehicles designed primarily for use on public

streets, roads, and highways.

(13) The term “failure” does not include—

(A) any failure which is only technical or

unimportant to the franchise relationship; or

(B) any failure for a cause beyond the reason-

able control of the franchisee.

(14) The terms “fail to renew” and “nonrenewal”

mean, with respect to any franchise relationship, a failure

to reinstate, continue, or extend the franchise relation-

ship-

(A) at the conclusion of the term, or on the

expiration date, stated in the relevant franchise;

(B) at any time, in the case of the relevant

franchise which does not state a term of duration

or an expiration date; or

(C) following a termination (on or after June

19, 1978) of the relevant franchise which was

entered into prior to June 19, 1978, and has not

been renewed after such date.

(15) The term “affiliate” means any person who

(other than by means of a franchise) controls, is

controlled by, or is under common control with, any

other person.

(16) The term “relevant geographic market area”

includes a State or a standard metropolitan statistical area

App. 34

as periodically established by the Office of Management

and Budget.

(17) The term “termination” includes cancellation.

(18) The term “commerce” means any trade, traffic,

transportation, exchange, or other commerce-

(A) between any State and any place outside of

such State; or

(B) which affects any trade, transportation,

exchange, or other commerce described in subpara-

graph (A).

(19) The term “State” means any State of the United

States, the District of Columbia, the Commonwealth of

Puerto Rico, the Virgin Islands, American Samoa, Guam,

and any other commonwealth, territory, or possession of

the United States.

§2802. Franchise relationship

General prohibition against termination or nonrenewal

(a) Except as provided in subsection (b) of this sec-

tion and section 2803 of this title, no franchisor engaged

in the sale, consignment, or distribution of motor fuel in

commerce may-

(1) terminate any franchise (entered into or

renewed on or after June 19, 1978) prior to the con-

clusion of the term, or the expiration date, stated in

the franchise; or

(2) fail to renew any franchise relationship (with-

out regard to the date on which the relevant fran-

chise was entered into or renewed).

a

App. 35

Precondition and grounds for

termination or nonrenewal

(b)(1) Any franchisor may terminate any franchise

(entered into or renewed on or after June 19, 1978) or may

fail to renew any franchise relationship, if-

(A) the notification requirements of section

2804 of this title are met; and

(B) such termination is based upon a ground

described in paragraph (2) or such nonrenewal is

based upon a ground described in paragraph (2) or

(3).

(2) For purposes of this subsection, the following

are grounds for termination of a franchise or nonrenewal

of a franchise relationship:

(A) A failure by the franchisee to comply with

any provision of the franchise, which provision is

both reasonable and of material significance to the

franchise relationship, if the franchisor first acquired

actual or constructive knowledge of such failure-

(i) not more than 120 days prior to the date

on which notification of termination or nonrenewal is

given, if notification is given pursuant to section

2804(a) of this title; or

(ii) not more than 60 days prior to the date on

which notification of termination or nonrenewal is

given, if less than 90 days notification is is given

pursuant to section 2804(b)(1) of this title.

(B) A failure by the franchisee to exert good

faith efforts to carry out the provisions of the fran-

chise, if-

|

App. 36

(i) the franchisee was apprised by the fran-

chisor in writing of such failure and was afforded a

reasonable opportunity to exert good faith efforts to

carry out such provisions; and

(ii) such failure thereafter continued within

the period which began not more than 180 days

before the date notification of termination or non-

renewal was given pursuant to section 2804 of this

title.

(C) The occurrence of an event which is rele-

vant to the franchise relationship and as a result of

which termination of the franchise or nonrenewal of

the franchise relationship is reasonable, if such event

occurs during the period the franchise is in effect and

the franchisor first acquired actual or constructive

knowledge of such occurrence-

(i) not more than 120 days prior to the date

on which notification of termination or nonrenewal is

given, if notification is given pursuant to section

2804(a) of this title; or

(ii) not more than 60 days prior to the date on

which notification of termination or nonrenewal is

given, if less than 90 days notification is given pur-

suant to section 2804(b)(1) of this title.

(D) An agreement, in writing, between the fran-

chisor and the franchisee to terminate the franchise

or not to renew the franchise relationship, if-

(i) such agreement is entered into not more

than 180 days prior to the date of such termination

or, in the case of nonrenewal, not more than 180 days

App. 37

prior to the conclusion of the term, or the expiration

date, stated in the franchise;

(ii) the franchisee is promptly provided with

a copy of such agreement, together with the sum-

mary statement described in section 2804(d) of this

title; and

(iii) within 7 days after the date on which the

franchisee is provided a copy of such agreement, tine

franchisee has not posted by certified mail a written

notice to the franchisor repudiating such agreement.

(E) In the case of any franchise entered into

prior to June 19, 1978, and in the case of any fran-

chise entered into or renewed on or after such date

(the term of which is 3 years or longer, or with

respect to which the franchisee was offered a term of

3 years or longer), a determination made by the

franchisor in good faith and in the normal course of

business to withdraw from the marketing of motor

fuel through retail outlets in the relevant geographic

market area in which the marketing premises are

located, if-

(i) such determination-

(I) was made after the date such franchise

was entered into or renewed, and

(II) was based upon the occurrence of

changes in relevant facts and circumstances after

such date;

(ii) the termination or nonrenewal is not for

the purpose of converting the premises, which are

the subject of the franchise, to operation by

| .

App. 38

employees or agents of the franchisor for such fran-

chisor’s own account; and

(iii) in the case of leased marketing premises-—

(I) the franchisor, during the 180-day

period after notification was given pursuant to sec-

tion 2804 of this title, either made a bona fide offer to

sell, transfer, or assign to the franchisee such fran-

chisor’s interest in such premises, or, if applicable,

offered the franchisee a right of first refusal of at

least 45 days duration of an offer, made by another,

to purchase such franchisor’s interest in such prem-

ises; or

(II) in the case of the sale, transfer, or

assignment to another person of the franchisor’s

interest in such premises in connection with the sale,

transfer, or assignment to such other person of the

franchisor’s interest in one or more other marketing

premises, if such other person offers, in good faith, a

franchise to the franchisee on terms and conditions

which are not discriminatory to the franchisee as

compared to franchises then currently being offered

by such other person or franchises then in effect and

with respect to which such other person is the

franchisor.

(3) For purposes of this subsection, the following

are grounds for nonrenewal of a franchise

relationship:

(A) The failure of the franchisor and the fran-

chisee to agree to changes or additions to the provi-

sions of the franchise, if-

App. 39

(i) such changes or additions are the result of

determinations made by the franchisor in good faith

and in the normal course of business; and

(ii) such failure is not the result of the fran-

chisor’s insistence upon such changes or additions

for the purpose of preventing the renewal of the

franchise relationship.

(B) The receipt of numerous bona fide customer

complaints by the franchisor concerning the fran-

chisee’s operation of the marketing premises, if-

(i) the franchisee was promptly apprised of

the existence and nature of such complaints follow-

ing receipt of such complaints by the franchisor; and

(ii) if such complaints related to the condition

of such premises or to the conduct of any employee

of such franchisee, the franchisee did not promptly

take action to cure or correct the basis of such

complaints.

(C) A failure by the franchisee to operate the

marketing premises in a clean, safe, and healthful

manner, if the franchisee failed to do so on two or

more previous occasions and the franchisor notified

the franchisee of such failures.

(D) In the case of any franchise entered into

prior to June 19, 1978, (the unexpired term of which,

on such date, is 3 years or longer) and, in the case of

any franchise entered into or renewed on or after

such date (the term of which was 3 years or longer, or

with respect to which the franchisee was offered a

term of 3 years or longer), a determination made by

App. 40

the franchisor in good faith and in the normal course

of business, if-

(i) such determination is—

(I) to convert the leased marketing premises

to a use other than the sale or distribution of motor

fuel,

(II) to materially alter, add to, or replace such

premises,

(III) to sell such premises, or

(IV) that renewal of the franchise relationship

is likely to be uneconomical to the franchisor despite

any reasonable changes or reasonable additions to

the provisions of the franchise which may be accept-

able to the franchisee;

(ii) with respect to a determination referred to

in subclause (II) or (IV), such determination is not

made for the purpose of converting the leased mar-

keting premises to operations by employees or agents

of the franchisor for such franchisor’s own account;

and

(iii) in the case of leased marketing premises

such franchisor, during the 90-day period after noti-

fication was given pursuant to section 2804 of this

title, either-

(I) made a bona fide offer to sell, transfer, or

assign to the franchisee such franchisor’s interests in

such premises; or

(II) if applicable, offered the franchisee a

right of first refusal of at least 45-days duration of an

App. 41

offer, made by another, to purchase such franchisor’s

interest in such premises.

Definition

(c) As used in subsection (b)(2)(C)-of this section,

the term “an event which is relevant to the franchise

relationship and as a result of which termination of the

franchise or nonrenewal of the franchise relationship is

reasonable” includes events such as-

(1) fraud or criminal misconduct by the fran-

chisee relevent to the operation of the marketing

premises;

(2) declaration of bankruptcy or judicial deter-

mination of insolvency of the franchisee;

(3) continuing severe physical or mental disabil-

ity of the franchisee of at least 3 months duration

which renders the franchisee unable to provide for

the continued proper operation of the marketing

premises;

(4) loss of the franchisor’s right to grant posses-

sion of the leased marketing premises through expir-

ation of an underlying lease, if the franchisee was

notified in writing, prior to the commencement of the

term of the then existing franchise-

(A) of the duration of the underlying lease, and

(B) of the fact that such underlying lease might

expire and not be renewed during the term of such

franchise (in the case of termination) or at the end of

such term (in the case of nonrenewal);

(5) condemnation or other taking, in whole or in

a

App. 42

part, of the marketing premises pursuant to the

power of eminent domain;

(6) loss of the franchisor’s right to grant the right

to use the trademark which is the subject of the

franchise, unless such loss was due to trademark

abuse, violation of Federal or State law, or other fault

or negligence of the franchisor, which such abuse,

violation, or other fault or negligence is related to

action taken in bad faith by the franchisor;

(7) destruction (other than by the franchisor) of

all or a substantial part of the marketing premises;

(8) failure by the franchisee to pay to the fran-

chisor in a timely manner when due all sums to

which the franchisor is legally entitled;

(9) failure by the franchisee to operate the mar-

keting premises for-

(A) 7 consecutive days, or

(B) such lesser period which under the facts

and circumstances constitutes an unreasonable

period of time;

(10) willful adulteration, mislabeling or mis-

branding of motor fuels or other trademark viola-

tions by the franchisee;

(11) knowing failure of the franchisee to comply

with Federal, State, or local laws or regulations rele-

vant to the operation of the marketing premises; and

(12) conviction of the franchisee of any felony

involving moral turpitude.

App. 43

Compensation, etc., for franchisee upon

condemnation or destruction of marketing premises

(d) In the case of any termination of a franchise

(entered into or renewed on or after June 19, 1978), or in

the case of any nonrenewal of a franchise relationship

(without regard to the date on which such franchise

relationship was entered into or renewed)-

(1) if such termination or nonrenewal is based

upon an event described in subsection (c)(5) of this

section, the franchisor shall fairly apportion between

the franchisor and the franchisee compensation, if

any, received by the franchisor based upon any loss

of business opportunity or good will; and

(2) if such termination or nonrenewal is based

upon an event described in subsection (c)(7) of this

section and the leased marketing premises are subse-

quently rebuilt or replaced by the franchisor and

operated under a franchise, the franchisor shall,

within a reasonable period of time, grant to the fran-

chisee a right of first refusal of the franchise under

which such premises are to be operated.

§ 2803. Trial and interim franchises

Nonapplicability of statutory nonrenewal provisions

(a) The provisions of section 2802 of this title shall

not apply to the nonrenewal of any franchise relation-

ship-

(1) under a trial franchise; or

(2) under an interim franchise.

Definitions

(b) For purposes of this section-

eo

App. 44

(1) The term “trial franchise” means any fran-

chise-

(A) which is entered into on or after June 19,

1978;

(B) the franchisee of which has not previously

been a party to a franchise with the franchisor;

(C) the initial term of which is for a period of

not more than 1 year; and

(D) which is in writing and states clearly and

conspicuously—

(i) that the franchise a trial franchise;

(ii) the duration of the initial term of the

franchise;

(iii) that the franchisor may fail to renew the

franchise relationship at the conclusion of the initial

term stated in the franchise by notifying the fran-

chisee, in accordance with the provisions of section

2804 of this title, of the franchisor’s intention not to

renew the franchise relationship; and

(iv) that the provisions of section 2802 of this

title, limiting the right of a franchisor to fail to renew

a franchise relationship, are not applicable to such

trial franchise.

(2) The term “trial franchise” does not include

any unexpired period of any term of any franchise

(other than a trial franchise, as defined by paragraph

(1)) which was transferred or assigned by a fran-

chisee to the extent authorized by the provisions of

App. 45

the franchise or any applicable provision of State law

which permits such transfer or assignment, without

regard to any provision of the franchise.

(3) The term “interim franchise” means any fran-

chise-

(A) which is entered into on or after June 19,

1978;

(B) the term of which, when combined with the

terms of all prior interim franchises between the

franchisor and the franchisee, does not exceed 3

years;

(C) the effective date of which occurs imme-

diately after the expiration of a prior franchise, appli-

cable to the marketing premises, which was not

renewed if such nonrenewal-

(i) was based upon a determination described

in section 2802(b)(2)(E) of this title, and

(ii) the requirements of section 2802(b)(2)(E)

of this title were satisfied; and

(D) which is in writing and states clearly and

conspicuously—

(i) that the franchise is an interim franchise;

(ii) the duration of the franchise; and

(iii) that the franchisor may fail to renew the

franchise at the conclusion of the term stated in the

franchise based upon a determination made by the

franchisor in good faith and in the normal course of

business to withdraw from the marketing of motor

’ rt ¥

App. 46

fuel through retail outlets in the relevant georgraphic

market area in which the marketing premises are

located if the requirements of section 2802(b)(2)(E)(ii)

and (iii) of this title are satisfied.

Nonrenewal upon meeting statutory

notification requirements

(c) If the notification requirements of section 2804

of this title are met, any franchisor may fail to renew any

franchise relationship—

(1) under any trial franchise, at the conclusion of

the initial term of such trial franchise; and

(2) under any interim franchise, at the conclusion

of the term of such interim franchise, if-

(A) such nonrenewal is based upon a deter-

mination described in section 2802(b)(2)(E) of this

title; and

(B) the requirements of section 2802(b)(2)(E)(ii)

and (iii) of this title are satisfied.

§2804. Notification of termination or nonrenewal of

franchise relationship

Genera! requirements applicable to franchisor

(a) Prior to termination of any franchise or

nonrenewal of any franchise relationship, the

franchisor shall furnish notification of such ter-

mination or such nonrenewal to the franchisee

who is a party to such franchise or such franchise

relationship—

(1) in the manner described in subsection

(c) of this section; and

niinieiieiemeeieenieieiieineimnnienaiaill

App. 47

(2) except as provided in subsection (b)

of this section, not less than 90 days prior to

the date on which such termination or non-

renewal takes effect.

Additional requirements applicable to franchisor

(b)(1) In circumstances in which it would not be

reasonable for the franchisor to furnish notification, not

less than 90 days prior to the date on which termination

or nonrenewal takes effect, as required by subsection

(a)(2) of this section-

(A) such franchisor shali furnish notification to

the franchisee affected thereby on the earliest date on

which furnishing of such notification is reasonably

practicable; and ‘

(B) in the case of leased marketing premises, such

franchisor-—

(i) may not establish a new franchise relation-

ship with respect to such premises before the expira-

tion of the 30-day period which begins-

(I) on the date notification was posted or per-

sonally delivered, or

(II) if later, on the date on which such termi-

nation or nonrenewal takes effect; and

(ii) may, if permitted to do so by the franchise

agreement, repossess such premises and, in circum-

stances under which it would be reasonable to do so,

operate such premises through employees or agents.

eee

App. 48

(2) In the case of any termination of any fran-

chise or any nonrenewal of any franchise relationship

pursuant to the provisions of section 2802(b)(2)(E) of

this title or section 2803(c)(2) of this title, the fran-

chisor shall-

(A) furnish notification to the franchisee not less

than 180 days prior to the date of which such termi-

nation or nonrenewal takes effect; and

(B) promptly provide a copy of such notification,

together with a plan describing the schedule and

conditions under which the franchisor will withdraw

from the marketing of motor fuel through retail out-

lets in the relevant geographic area, to the Governor

of each State which contains a portion of such area.

Manner and form of notification

(c) Notification under this section-

(1) shall be in writing;

(2) shall be posted by certified mail or personally

delivered to the franchisee; and

(3) shall contain-

(A) a statement of intehtion to terminate the

franchise or not to renew the franchise relationship,

together with the reasons therefor;

(B) the date on which such termination or non-

renewal takes effect; and

(C) the summary statement prepared under

subsection (d) of this section.

App. 49

Preparation, publication, etc., of statutory summaries

(d)(1) Not later than 30 days after June 19, 1978, the

Secretary of Energy shall prepare and publish in the

Federal Register a simple and concise summary of the

provisions of this subchapter, including a statement of

the respective responsibilities of, and the remedies and

relief available to, any franchisor and franchisee under

this subchapter.

(2) In the case of summaries required to be fur-

nished under the provisions of section 2802(b)(2)(D)

of this title or subsection (c)(3)(C) of this section

before the date of publication of such summary in the

Federal Register, such summary may be furnished

not later than 5 days after it is so published rather

than at the time required under such provisions.

§2805. Enforcement provisions

Maintenance of civil action by franchisee against

franchisor; jurisdiction and venue; time for

commencement of action

(a) Ifa franchisor fails to comply with the require-

ments of section 2802 or 2803 of this title, the franchisee

may maintain a civil action against such franchisor. Such

action may be brought, without regard to the amount in

controversy, in the district court of the United States in

any judicial district in which the principal place of busi-

ness of such franchisor is located or in which such fran-

chisee is doing business, except that no such action may

be maintained unless commenced within 1 year after the

later of-

(1) the date of termination of the franchise or

nonrenewal of the franchise relationship; or

IN

App. 50

(2) the date the franchisor fails to comply with

the requirements of section 2802 or 2803 of this title.

Equitable relief by court; bond requirements;

grounds for nonexercise of court’s equitable powers

(b)(1) In any action under subsection (a) of this

section, the court shall grant such equitable relief as the

court determines is necessary to remedy the effects of any

failure to comply with the requirements of section 2802 or

2803 of this title, including declaratory judgment, manda-

tory or prohibitive injunction relief, and interim equitable

relief.

(2) Except as provided in paragraph (3), in any

action under subsection (a) of this section, the court

shall grant a preliminary injunction if-

(A) the franchisee shows-

(i) the franchise of which he is a party has

been terminated or the franchise relationship of

which he is a party has not been renewed, and

(ii) there exists sufficiently serious questions

going to the merits to make such questions a fair

ground for litigation; and

(B) the court determines that, on balance, the

hardships imposed upon the franchisor by the issu-

ance of such preliminary injuctive relief will be less

than the hardship which would be imposed upon

such franchisee if such preliminary injunctive relief

were not granted.

(3) Nothing in this subsection prevents any court

from requiring the franchisee in any action under

App. 51

subsection (a) of this section to post a bond, in an

amount established by the court, prior to the issu-

ance or continuation of any equitable relief.

(4) In any action under subsection (a) of this sec-

tion, the court need not exercise its equity powers to

compel continuation or renewal of the franchise rela-

tionship if such action was commenced-

(A) more than 90 days after the date on which

notification pursuant to section 2804(a) of this title

was posted or personally delivered to the franchisee;

(B) more than 180 days after the date on which

notification pursuant to section 2804(b)(2) of this title

was posted or personally delivered to the franchisee;

or

(C) more than 30 days after the date on which

the termination of such franchise or the nonrenewal

of such franchise relationship takes effect if less than

90 days notification was provided pursuant to sec-

tion 2804(b)(1) of this title.

Burden of proof;

burden of going forward with evidence

(c) In any action under subsection (a) of this sec-

tion, the franchisee shall have the burden of proving the

termination of the franchise or the nonrenewal of the

franchise relationship. The franchisor shall bear the bur-

den of going forward with evidence to establish as an

affirmative defense that such termination or nonrenewal

was permitted under section 2802(b) or 2803 of this title,

and, if applicable, that such franchisor complied with the

requirements of section 2802(d) of this title.

a

App. 52

Actual and exemplary damages and attorney

and expert witness fees to franchisee;

determination by court of right to

exemplary damages and amount; attorney

and expert witness fees to franchisor

for frivolous actions

(d)(1) If the franchisee prevails in any action under

subsection (a) of this section, such franchisee shall be

entitled—

(A) consistent with the Federal Rules of Civil

Procedure, to actual damages;

(B) in the case of any such action which is

based upon conduct of the franchisor which was in

willful disregard of the requirements of section 2802

or 2803 of this title, or the rights of the franchisee

thereunder, to exemplary damages, where appropri-

ate; and

(C) to reasonable attorney and expert witness

fees to be paid by the franchisor, unless the court

determines that only nominal damages are to be

awarded to such franchisee, in which case the court,

in its discretion, need not direct that such fees be

paid by the franchisor.

(2) The question of whether to award exemplary

damages and the amount of any such award shall be

determined by the court and not by a jury.

(3) In any action under subsection (a) of this sec-

tion, the court may, in its discretion, direct that rea-

sonable attorney and expert witness fees be paid by

the franchisee if the court finds that such action is

frivolous.

App. 53

Discretionary power of court to compel

continuation or renewal of franchise

relationship; grounds for noncompulsion;

right of franchisee to actual damages

and attorney and expert witness

fees unaffected

(e)(1) In any action under subsection (a) of this

section with respect to a failure of a franchisor to renew a

franchise relationship in compliance with the require-

ments of section 2802 of this title, the court may not

compel a continuation or renewal of the franchise rela-

tionship if the franchisor demonstrates to the satisfaction

of the court that-

(A) the basis for such nonrenewal is a deter-

mination made by the franchisor in good faith and in

the normal course of business-—

(i) to convert the leased marketing premises

to a use other than the sale or distribution of motor

fuel,

(ii) to materially alter, add to, or replace such

premises,

(iii) to sell such premises,

(iv) to withdraw from the marketing of motor

fuel through retail outlets in the relevant geographic

market area in which the marketing premises are

located, or

(v) that renewal of the franchise relationship

is likely to be uneconomical to the franchisor despite

any reasonable changes or reasonable additions to

the provisions of the franchise which may be accept-

able to the franchisee; and

Atel

App. 54

(B) the requirements of section 2804 of this title

have been complied with.

(2) The provisions of paragraph (1) shall not

affect any right of any franchisee to recover actual

damages and reasonable attorney and expert witness

fees under subsection (d) of this section if such non-

ren:wal is prohibited by section 2802 of this title.

§2806. Relationship of statutory provisions to State

and local laws

(a) To the extent that any provision of this subchap-

ter applies to the termination (or the furnishing of noti-

fication 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 con-

tinue in effect any provision of any law or regulation

(including any remedy or penalty applicable to any viola-

tion thereof) with respect to termination (or the furnish-

ing of notification with respect thereto) of any such

franchise or to the nonrenewal (or the furnishing of noti-

fication with respect thereto) of any such franchise rela-

tionship unless such provision of such law or regulation

is the same as the applicable provision of this subchapter.

(b) Nothing in this subchapter authorizes any trans-

fer or assignment of any franchise or prohibits any trans-

fer or assignment of any franchise as authorized by the

provisions of such franchise or by any applicable provi-

sion of State law which permits such transfer or assign-

ment without regard to any provision of the franchise.

App. 55

APPENDIX H

§ 1447. Procedure after removal generally

(a) In any case removed from a State court, the

district court may issue all necessary orders and process

to bring before it all proper parties whether served by

process issued by the State court or otherwise.

(b) It may require the petitioner to file with its clerk

copies of all records and proceedings in such State court

or may cause the same to be brought before it by writ of

certiorari issued to such State court.

(c) If at any time before final judgment it appears

that the case was removed improvidently and without

jurisdiction, the district court shall remand the case, and

may order the payment of just costs. A certified copy of

the order of remand shall be mailed by its clerk to the

clerk of the State court. The State court may thereupon

proceed with such case.

(d) An order remanding a case to the State court

from which it was removed is not reviewable on appeal

or otherwise, except that an order remanding a case to

the State court from which it was removed pursuant to

section 1443 of this title shall be reviewable by appeal or

otherwise.

June 25, 1948, c. 646, 62 Stat. 939; May 24, 1949, c. 1'39,

§ 84, 63 Stat. 102; July 2, 1964, Pub.L. 88-352, Title IX,

§ 901, 78 Stat. 266.

Al