Opposition Brief — Abadjian v. Gulf Oil Corp.

a.

a) F NOW 18 1988

No. 88-674

JOSEPH F. SPANION

SERRATE GE ea ae

— —

——s

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

JACK ABADJIAN, MARK BALL,

JOSEPH BROWN, JOHN EGHENIAN,

BRAD MAY, NASSIR MAZAREI,

DONALD PROUSE, AL ROSENSTEIN,

ARAM SHISHMANIAN, JOE SMIDERLE

and STEPHEN WEBBER,

" Petitioners,

GULF OIL CORPORATION, a

Pennsylvania corporation,

THRIFTY OIL CORPORATION, a

California corporation,

Respondents.

On Petition for Writ of Certiorari to the

Court of Appeal of the State of California,

Second Appellate District, Division Two

BRIEF IN OPPOSITION OF RESPONDENT

THRIFTY OIL CO.

DONALD C. SMALTZ

(Counsel of Record)

LEIGHTON M. ANDERSON

MORGAN, LEWIS & BOCKIUS

801 South Grand Avenue

Twenty-First Floor

Los Angeles, California 90017

Telephone: (213) 612-2500

Attorneys for Respondent

Thrifty Oil Co.

WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

COUNTER-STATEMENT REGARDING PARTIES

TO THE PROCEEDING BELOW,

INCLUDING LIST OF AFFILIATED CORPORATIONS

A. Pursuant to Rule 28.1, respondent Thrifty Oil Co.

certifies that it does not have any parent companies,

affiliates or subsidiaries except wholly owned subsidiaries.

B. Under the heading “Parties to the Proceeding Be-

low,” the petition for a writ of certiorari contains the

material misstatements and omissions noted below :

1. The parties to the proceeding below also included

plaintiff Ben Ceson (‘‘Ceson’”). However, Ceson is not a

petitioner and may no longer have an interest in the case.

2. The petition includes the gratuitous assertion that

“all Petitioners met the definition of ‘franchisee’ |as

defined in the PMPA].” (Pet. at ii.) Although the state

trial court made a finding to this effect, respondent

Thrifty Oil Co. appealed that determination.* The court

below did not reach the issue, in light of its ruling that

it did not have subject matter jurisdiction.

3. The petition erroneously refers to “Respondent

Mobil Oil Corporation.” Jd. Mobil Oil Corporation has

never been a party to this case.

4. The petition erroneously contends that Thrifty is

not a party “to the issues presented to this Court.” /d.

That contention is impossible to sustain in light of the

fact that Thrifty was the appellant in the court below,

which reversed an adverse judgment of the trial court.

(Pet. App. 1.)

* Thrifty’s appeal was raised on the grounds, inter alia, that all

but three of the petitioners had terminated their prior “franchise”

relationship with respondent Gulf Oil Corporation, and had entered

into new agreements on a non-franchised basis.

(i)

TABLE OF CONTENTS

PS NE RE A IIE Be RO ss cricsninncncaccancossoncensncevantats

Ne nen peesnvusensiondeenetemnsnhmeniie

STATEMENT OF THE CASE

I. STATEMENT OF FACTS

TR om ks FR iy 6) ne

REASONS FOR DENYING THE PETITION .....

I. THE QUESTIONS PRESENTED BY THE

PETITION DO NOT WARRANT REVIEW BY

ck acl ads andiseboeclpdalineneindininei

Il. THE COURTS THAT HAVE FOUND FED-

ERAL JURISDICTION OVER PMPA CLAIMS

TO BE EXCLUSIVE HAVE CORRECTLY

APPLIED THE GULF OFFSHORE DOC-

TRINE ......

A. Congress’ Express Desire for Uniformity of

Interpretation Stronely Supports Federal

Jurisdiction Over PMPA Cases.......

B. The Expertise of Federal Judces Over Fed-

eral Claims Also Supports Exclusive Juris-

diction, Particularly Because The PMPA Ex-

pressly Mandates The Application of Fed-

eral Procedural Rules

C. The Federal Courts Are More Hospitable to

the Delicate Balance of Competing Interests

Which Congress Attempted to Strike In the

RE a ae

Ill. THE DISTRICT COURT’S REMAND ORDER

DID NOT PRECLUDE THE COURT BELOW

FROM DETEMINING THAT ITS EXERCISE

OF SUBJECT MATTER’ JURISDICTION

WOULD BE CONTRARY TO CONTROLLING

FEDERAL LAW

CONCLUSION

14

16

18

iv

TABLE OF AUTHORITIES

Cases: Page

Avramidis v. Atlantic Richfield Co., 623 F. Supp.

64 (D. Mass. 1985), aff’d sub nom. Avramidis v.

ARCO Petroleum Products Co., 798 R.2d 12 (1st

I (ce aaa Mua 9

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

SD SM TIE. 0 IPUIED secessnecpnarseiiciivaundscnuiisabentanionan 11

Brach v. Amoco Oil Co., 677 F.2d 1213 (7th Cir.

Sa ee en a oe eae 18

California Arco Distributors, Inc. v. Atlantic Rich-

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

cE RA eae Re ee tir et ap des ae ROL EAP PORE NES PEER 10

Carnegie-Mellon University v. Cohill, —— U.S.

%. § Se So; ie: | ee ener 22

Charles Dowd Box Co. v. Courtney, 368 U.S. 502

RR ss AIT SOND PN OE OR ARO TNR APO ITE 14

Chicago & N.W. Transp. Co. v. Kalo Brick & Tile

OR eM CED res ee 12, 20, 21, 22

Da Costa’s Automotive, Inc. v. Birchwood Plaza

Shell, Inc., 482 N.Y.S.2d 832, 106 A.D.2d 481

(N.Y.A.D. 1984)

Eckel v. Atlantic Richfield Co., No. CV 85-8451

(AHS) slip op. (C.D. Cal., January 30, 1986) -... 11

Elimelekh v. Texaco Refining & Marketing, Inc.,

Bus. Fran. Guide (CCH) © 8663 at 16,751 (C.D.

co SRB AMINE lien app menial OAM sot IAMS PRA 11

Frankerd v. Amoco Oil Co., 116 Wis. 2d 254, 342

re ee Ee ED ais cata ntace eee een on dia asace 11

Fresher v. Shell Oil Co., 846 F.2d 45 (9th Cir.

RN eee eA ee ee ea 10

General Inv. Co. v. Lake Shore & M.S. Ry., 260

ik BEG. ; RRR nee rnun sees h CC Se oy ae 14

Gravitt v. Southwestern Bell Tel. Co., 430 U.S.

723, reh’g denied, 431 U.S. 975 (1977).............. 21

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

t.) RRR PAR RAF Ansa yt oR ire rrr EN 8, 13, 14, 16, 17, 18

Hathorn v. Lovorn, 457 U.S. 255, reh’g denied, 458

os ti ee 13, 14, 18

In re Herbert, 806 F.2d 889 (9th Cir. 1986)........ 16

Vv

TABLE OF AUTHORITIES—Continued

Page

Johnson v. Mobil Oil Corp., 364 Pa. Super. Ct.

275, 528 A.2d 155 (1987), appeal granted, 544

BB OG: CGN vnssiinsiscnsincecnuebesaeee 11

Kreisher v. Mobil Oil Corp., No. A036017, un-

published portion of opinion (Cal. App., Feb-

ruary 5, 1988), cert. denied, ——- U.S. ——, 109

ee | rr ee 11

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

Bs NAW aviccsoc:sisnescisicncaciepinicnt eeeeneiae anes aes ii, 32

Missouri Pac. Ry. v. Fitzgerald, 160 U.S. 556

CRY avicsiinccckcnigsrcnnscansdedncsiedes aia 21

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

Rptr. 24 (1988), petition for cert. filed, Septem-

eee DO, BD scccciiccccedece cane 11

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

Cir. 1975), aff'd sub nom., Jones v. Rath Pack-

ine Ce., S00 Ua BED (TBE ee. mccitteeeskesmecentics 21

Ricco v. Shell Oil Co., 180 N.J. Super. 399, 434

B36 S808 40 te 11

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

770 (C.D. Ge. SOO ae eee oe 10, 11

Shell Oil Co. v. Nelson Oil Co., 627 F.2d 228

(Temp. Emer. Ct. App.), cert. denied, 449 U.S.

Die Ce nk iii eee 10

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

470 F. Samp. 166 (2. Come. 1979) «0000 10

Valentine v. Mobil Oil Corp., 789 F.2d 1388 (9th

+ Se, _. | eee ee Lan Saucsanceathonieanteieeaatielaiasees 9, 19

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

1984), op’n amended on denial of reh’g, 815 F.2d

1, 2 Ct A |) reer eee nme 17, 18

Walters v. Chevron U.S.A., Inc., 154 Ga. App.

GIG, ZOD Tet AG CRT nates 11

Statutes and Rules:

Re se to a ee eee 14

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

Practices Act (“PMPA”’) ................. Le ACOA passim

15 U.S.C. § 2801

_—

vi

TABLE OF AUTHORITIES—Continued

Page

25 UBC. 8 BOB ID cccceesccctcectsnsstsccsscctecnsepenincateuaeaen 6, 14

16 U.S. & BBS CR) CBD cocccticecictamedeieenenemean 18

15 UBC. 3 BROCE coisa eens 18

2G UDR. Bh Bee Cie Raccvccsccestccceinscinencdanaauanaasde 15

BB UA. B BGR) wcccctandectnvscsctecstsssnsesienaainaan 12

BIR Cee Be |. 0); Ree LE Ss 21, 22

BIS TE 2 . § Sean ae MRS RN Renn ts 18

BB UTI. B Be i ecccccaccetancencesecstcccscoaeee 13

Rt eM ee nee Et 18

Other:

American Law Institute, Study of the Division of

Jurisdiction Between State and Federal Court

BOB GT CRBS wdsciccsentsiccdioae eee 17

M. Redish & J. Muench, Adjudication of Federal

Causes Of Action In State Court, 75 Mich. L.

OV. SEL . CHO TE ccnwtcsiosciieccaaeaeeee 16

Note, Exclusive Jurisdiction of Federal Court in

Private Civil Actions, 70 Harv. L. Rev. 509

CROGT D svceoresisiinsntaicbitninalccaerccsadalenanaaeantudanenne 14, 19

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

1978 U.S. Code Cong. & Admin. News 873

(“Benete GRGTE D ci cccumcseoeeoee 14, 15, 16, 18

123 Cong. Rec. 10383 (April 5, 1977) ........00000200..... 17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

No. 88-674

JACK ABADJIAN, MARK BALL,

JOSEPH BROWN, JOHN EGHENIAN,

BRAD MAY, NASSIR MAZAREI,

DONALD PROUSE, AL ROSENSTEIN,

ARAM SHISHMANIAN, JOE SMIDERLE

and STEPHEN WEBBER,

» Petitioners,

GULF OIL CORPORATION, a

Pennsylvania corporation,

THRIFTY OIL CORPORATION, a

California corporation,

Respondeixts.

On Petition for Writ of Certiorari to the

Court of Appeal of the State of California,

Second Appellate District, Division Two

BRIEF IN OPPOSITION OF RESPONDENT

THRIFTY OIL CO.

INTRODUCTION

After seven years of litigation, the California courts

have finally reached the correct result and have rejected

petitioners’ unfounced claims under the Petroleum Mar-

keting Practices Act (“PMPA”), 15 U.S.C. § 2801 et

seq. Applying directly applicable case authority, the

2

court below held that PMPA actions are within the ex-

clusive jurisdiction of the federal courts. On two pre-

vious occasions, petitioners had defeated defendants’ right

to a federal forum by expressly disclaiming their reliance

on the PMPA and obtaining remand orders. As a direct

result of petitioners’ tactical maneuvering, the case was

finally submitted to a state court judge who characterized

the PMPA as “lousy legislation” and “a poorly drafted

federal statute that is very hard to understand... .” The

state trial court entered judgment requiring respondent

Gulf Oil Corp. (“Gulf’’) to sell petitioners’ leased service

station premises to them, rather than to respondent

Thrifty Oil Co. (“Thrifty”).

This action was filed in 1981, after Thrifty entered

into its contract with Gulf to purchase more than 300 of

Gulf’s service station properties in the Southwest. A

group of dealers. now petitioners before this Court, sued

in state court to block the sale and force a sale to them-

selves on the same terms. However, petitioners cannot

demonstrate the existence of that alleged right in the

letter or the spirit of the PMPA. While the PMPA

was enacted only to protect service station “franchisees”

from arbitrary or discriminatory terminations or non-

renewals, petitioners were never terminated or nonre-

newed in any alleged “franchise” until they each rejected

Gulf’s offers in 1981-82 to extend the dealership contracts

for a new term after their expiration date. Even though

petitioners rejected Gulf’s renewal offers, they have re-

tained actual possession of the station properties for the

last seven years, while using their unfounded federal-law

claims as an impediment to any eviction proceedings.

Petiticners have also stopped paying rent. so that their

continued occupation has been on a rent-free basis.

In ruling that the PMPA claims could not be adjudi-

cated in state court, the court below did not reach the

merits of petitioners’ claims. However, out of the hun-

i ateaaeeiaciineeeaeeiaeeaimnammail

dreds of cases decided under the PMPA since its enact-

ment in June 1981, no court other than the tria! court

in this case has ever accepted the “first refusal” right

which petitioners assert they had. Moreover, no court

has ever accepted the procedural argument which peti-

tioners now assert, namely, that the state courts allegedly

do not have jurisdiction to consider their own jurisdiction

in a case which has been removed to federal court and

thereafter remanded. The rule against appellate review

of remand orders does not divest the state courts of any

jurisdiction that existed prior to removal, nor does it

confer jurisdiction on the state courts that they would

not otherwise have had.

The questions purportedly presented by the petition are

far from “certworthy,” because they are each intertwined

with the unique procedural circumstances of this case.

Those circumstances include petitioners’ disclaimers in

federal court that, “We have not purported to allege a

cause of action under the Petroleum Marketing Practices

Act ....” The circumstances also include a rare form

of error by the federal district court, which remanded the

removed action to state court despite the acknowledged

existence of a federal claim. Even if this error cannot

be reviewed, it need not—and should not—be com-

pounded.

Thus, there is no issue of general importance to

warrant Supreme Court review. After seven years of

litigation, the court below penetrated petitioners’ unmeri-

torious contentions and concluded that petitioners’ exclu-

sive remedy was to have their claims adjudicated in an

action filed in federal court. The fact that petitioners

made a conscious decision not to pursue a federal court

remedy does not change the correctness of this ruling,

which should be allowed to stand and to bring this pro-

tracted litigation to an end.

4

STATEMENT OF THE CASE

I. STATEMENT OF FACTS.

In July 1978, Gulf decided to withdraw from gasoline

marketing in the Southwest. Even prior to that decision,

Gulf had been offering inducements to its retail service

station dealers if they would terminate their “Gulf”

branded franchise agreements, and enter into new agree-

ments on an ‘“unbranded” basis.' As a result of the

planned withdrawal, Gulf needed to dispose of more than

300 service station properties in California, Arizona and

Nevada.

In July 1980, Thrifty offered to purchase those stations

for cash, and a written contract was executed by Gulf

and Thrifty on September 30, 1980. That contract ex-

pressly provided that “Gulf will continue to supply gaso-

line directiy to existing dealers who [will] continue to

operate stations purchased by [Thrifty].” Gulf and

Thrifty also agreed to comply with the provisions of the

PMPA to the extent it applied to any affected dealer.*

After the contract was signed, Gulf informed its deal-

ers that “you will be given notification and the offer

required by the [PMPA] to acquire the station [you

occupy] yourself.” Guif’s Vice President, Mr. Kemple,

testified that the intent of the letter was only to assure

1 Seven of the petitioners accepted Gulf’s offer of ‘unbranded”

gasoline supply agreements. Three of the dealers declined the

offer, and their contracts were then renewed on a “Gulf” branded

basis. The eleventh petitioner, Stephen Webber, did not become

a party to a motor fuel supply relationship with Gulf until April 7,

1979, and Gulf did not offer a branded relationship to him.

2 During the negotiations, Guif’s representatives suggested that

some of its retail service station dealers might have the right

under the PMPA to purchase the service stations they were cur-

rently occupying under lease agreements. However, Gulf’s repre-

sentatives appeared confused concerning the effect of the PMPA,

and no resolution was reached except to provide that the parties

would honor whatever rights actually existed under the statute.

simi

| LL

5

the dealers that their rights, if any, would be accommo-

dated. Despite that intention, Gulf began to issue ‘‘No-

tices of Nonrenewal” to some of its dealers, which cited

Gulf’s decision to sell the stations as the basis for the

nonrenewal and which contained an offer to sell the leased

station to the affected dealer. During December 1980 and

January 1981, Gulf cancelled its contracts with five of

its dealers (none of whom became plaintiffs in this case)

by allowing those dealers to purchase their stations.

When Thrifty learned that stations included in its

purchase contract were being sold to third parties,

Thrifty notified Gulf that its conduct constituted a mate-

rial breach of the agreement. After review, Gulf’s attor-

neys agreed with Thriftv that the dealers did not have

a right of first refusal. As long as the dealers’ leases

and supply agreements were not being disturbed, Gulf

acknowledged that the PMPA was not implicated and

that Gulf could not obtain a unilateral benefit (cancel-

lation of its gasoline supply obligation) by depriving

Thrifty of stations conveyed under the contract.

After reaching this conclusion, Gulf requested an ex-

tension of the escrow period so that it could either renew

its agreements with the dealers or persuade them to

terminate their relationship with Gulf by mutual consent.

Commencing in July 1981, Gulf offered three-vear re-

newal agreements to each of its dealers, including neti-

tioners, which were on the same terms as the existing

lease and supply agreements, except for an increase in

the amount of rent.* However, each of the petitioners

refused these offers for a continued relationship.‘

3 The rent was proposed in accordance with Gulf’s national rent

policy. The dealers disputed Gulf’s evidence on this issue, but the

issue was never tried.

4Commencing on September 10, 1981, Gulf issued Notices of

Nonrenewal to petitioners, based on their refusal to agree to the

renewal offers. When petitioners refused to vacate the leased

6

II. PROCEDURAL HISTORY.

Petitioners filed the Complaint against Gulf and

Thrifty in Los Angeles County Superior Court on August

3, 1981. The Complaint and the Amended Complaint,

which was filed shortly thereafter, alleged that Gulf’s

dealers had the right to purchase their leased service

stations on a first refusal basis. The Amended Complaint

expressly cited the PMPA in support of that claim.

On September 14, 1981, Gulf and Thrifty removed the

Amended Complaint to the United States District Court

for the Central District of California. However, peti-

tioners argued that the action only sought state law

remedies based on state law theories, asserting that

“'Wle have not purported to allege a cause of action

under the Petroleum Marketing Practices Act... .”

Petitioners also argued that since Thrifty was not a

“franchisor” for purposes of the PMPA’s enforcement

provisions, 15 U.S.C. § 2805(a), Thrifty must be a party

only to pendent state law claim (i.e., a “pendent party”)

over whom the federal court could not acquire jurisdic-

tion. The district court adopted petitioners’ arguments

and remanded the entire action to state court on January

4, 1982.

Without ever filing any further amendment to their

complaint, petitioners then proceeded in state court to file

a motion “under PMPA” for partial summary judgment.°

premises, Gulf filed unlawful detainer actions against them. How-

ever, Gulf has never conveyed the properties to Thrifty as required

under the contract, and the litigation at bench includes Thrifty’s

cross-complaint against Gulf for breach of its contract to convey

those station properties.

5 Earlier, the state court judge then assigned to the case, Judge

Schauer, had questioned petitioners’ contention that their claims

could be asserted as a matter of state law. The court asked, “Why

do you eschew this idea of bringing an action under the [Petroleum

Marketing Practices} Act? ... Why have you avoided at least

theoretically bringing an action under the Act?” The attorney who

7

Based on this explicit reliance on federal law, defendants

again removed the action to the district court on October

17, 1983. However, the same district court judge con-

cluded that “the claims against Thrifty do not arise

under PMPA,” and that the district court could not

entertain these claims. (Pet App. 8, 22.) Even though

acknowledging that the claims against Gulf, at least,

were within its original jurisdiction, the district court

further concluded that it was “require[d] ... to remand

the entire case.” (Id.) At no time did the district court

raise, address or consider any issue as to whether the

state courts had jurisdiction over PMPA claims.

When the action was returned to state court, the par-

ties filed various motions for partial summary judgment.

After a hearing, a newly assigned judge ruled that the

contract between Gulf and Thrifty was “an event and

an action that gave to each moving Plaintiff a right of

first refusal.” (Pet. App. 26.) The trial judge also held

that “PMPA jurisdiction is not exclusively in the Federal

Courts ....” (Pet. App. 27.) On a subsequent occasion,

the judge explained his negative views concerning the

PMPA and the federal legislative process, as follows:

{[T]his is an unusually complex problem involving a

poorly drafted federal statute that is very hard to

understand.

You have to get a good grip on your tail before

you start reading that PMPA. It is a very complex

and complicated and poorly constructed statute.

It is a classic example of the kind of legislation we

get out of the Congress when the interest of the Con-

gressmen is a Self-perpetuation and tending to the

interests of all of the lobbyists that perpetuate it.

was present at the hearing responded that he had not been privy

to that decision. Judge Schauer responded, “Its a tortured course—

a tortuous course.”

8

It is lousy legislation. Its intention is probably

very good, but it is expressed very awkward. It is a

terrible job .... We don’t know what the appellate

court is going to do.

After the trial judge had purported to decide the

PMPA issue, the remainder of the case was decided on

stipulated facts, and a judgment was entered on January

16, 1986. (App. la.) The Judgment orders the stations

to be sold to the dealers at a price which is only 20%

higher than the net book value of the properties on

Gulf’s records, without any compensation to Thrifty.

Thrifty and Gulf appealed the judgment. On May 8,

1988, the court below reversed the trial court’s judgment,

holding that petitioners’ PMPA claims are subject to ex-

clusive federal jurisdiction. (Pet. App. 1.) Petitioners

filed a Petition for Review in the California Supreme

Court, which that court denied on July 20, 1988. (Pet.

App. 7.)

REASONS FOR DENYING THE PETITION

I. THE QUESTIONS PRESENTED BY THE PETITION

DO NOT WARRANT REVIEW BY THIS COURT.

The petition for a writ of certiorari should be denied

because neither of the questions presented relate to an

issue on which there is any substantial difference of

opinion or need for Supreme Court intervention. More-

over, in deciding that it lacked subject matter jurisdiction

over the PMPA, the court below correctly applied prior

holdings by both federal and state courts, including this

Court’s opinion in Gulf Offshore Co. v. Mobil Oil Corp.,

453 U.S. 473 (1981).

In overview, this case concerns petitioners’ attempt to

obtain an unearned windfall profit on the basis of an un-

meritorious allegation that when Gulf sold the approxi-

mately 300 service station properties in the Southwest to

Thrifty, the PMPA required that the stations occupied

9

by petitioners to be sold to petitioners at Thrifty’s price.°

Despite petitioners’ reliance on a distorted interpretation

of the PMPA as their only alleged basis for the purported

purchase option, petitioners have sought strenuously at

every turn to avoid federal court as the forum in which

to litigate their claims.

Petitioners’ reasons for avoiding the federal courts have

nothing to do with the hardships allegedly suffered by

“rural” service station dealers in retaining “expensive

big city attorneys.” (Pet. at 16.) Actually, petitioners

all reside and have their businesses in metropolitan Los

Angeles, and have employed the same counsel in both the

state and the federal court proceedings. However, peti-

tioners were aware that even though the state courts may

be less familiar with the PMPA, the state courts in

California are more hospitable to claims by service station

dealers in actions against “big oil companies,” even if

those claims are fundamentally lacking in legal or factual

merit.

Petitioners’ tactical preference for state court proved

to be correct in this case, at least initially. In granting

each petitioner an option to purchase his leased service

station property,’ the California trial court judge ex-

6 The “package” price offered by Thrifty for the more than 300

stations was computed by multiplying Gulf’s net book value for

the properties by a factor of 1.2 (120%). Although equitable

as applied to the transaction as a whole, when a book value ap-

praisal method is applied to the specific locations involved in this

case, for purposes of attempting to give petitioners the benefit

of Thrifty’s price, the result is significant undervaluations in com-

parison to fair market value.

7 By contrast, none of the many federal district or circuit courts

that have been presented with similar claims under the PMPA

have ever awarded “relief” in the form of a forced sale of service

station property. See, e.g., Avramidis v. Atlantic Richfield Co.,

623 F. Supp. 64, 68 (D. Mass. 1985), aff'd sub nom. Avramidis v.

ARCO Petroleum Products Co., 798 F.2d 12 (1st Cir. 1986); see

also Valentine v. Mobil Oil Corp., 789 F.2d 1388, 1390 (9th Cir.

10

pressed his intention to apply what he believed to be the

“good intentions” of the PMPA, even though he found

the statute to be “poorly constructed” and “very hard to

understand.” (Supra at 7-8.) While many state court

judges do not share that apparent antipathy to federal

legislation, the judge’s comments illustrate that the prin-

cipal factors supporting exclusive federal jurisdiction—

which are (1) the desirability of uniform interpretation,

(2) the expertise of federal judges in federal law, and

(3) the greater hospitality of federal courts to federal

claims—are all strongly present with respect to PMPA.

Moreover, there is no conflict among the circuits re-

garding exclusive jurisdiction under the PMPA, because

the circuit courts have not had any occasion to address

the issue.8 As far as Thrifty’s research has disclosed,

Rustom v. Atlantic Richfield Co., 618 F. Supp. 210 (C.D.

Cal. 1985), was the first case in which the issue of ex-

clusive jurisdiction under the PMPA was squarely de-

cided.* Apparently, the issue did not arise prior to

1986) (‘first refusal” claim advanced under parallel provision of

the PMPA; held: “[o]ur review of the PMPA discloses no pro-

vision giving [the dealer] the right he asserts”); Fresher v. Shell

Oil Co., 846 F.2d 45 (9th Cir. 1988) (no violation of PMPA in the

sale of service stations to a third party).

8 The only possible reference to the issue by a circuit-level fed-

eral court was in Shell Oil Co. v. Nelson Oil Co., 627 F.2d 228, 231

n.l (Temp. Emer. Ct. App.), cert. denied, 449 U.S. 1022 (1980), in

which the court’s statement that “federal courts have exclusive

jurisdiction over the claims raised by Shell” may have included

Shell’s claims under the PMPA, as well as Shell’s claims under the

Economic Stabilization Act of 1970.

® Previously, in Ted’s Tire Service, Inc. v. Chevron U.S.A., Inc.,

470 F. Supp. 163, 165-66 (D. Conn. 1979), the court suggested in

dictum that PMPA jurisdiction would be concurrent; the court

stated that, if the complaint were amended to allege a PMPA claim,

the action “would be within the removal jurisdiction of this Court.”

Id. A few courts subsequently cited Ted’s Tire on this point, also

in dictum, without examining the issue. See, e.g., California Arco

Distributors, Ine. v. Atlantic Richfield Co., 158 Cal. App. 3d 349,

364, 204 Cal. Rptr. 743 (1984).

11

Rustom because PMPA cases were being litigated ex-

clusively in the federal courts.’® After Rustom, the doc-

trine of exclusive jurisdiction over PMPA has been

adopted without exception by state and federal courts in

California." Indeed, only an intermediate-level appellate

court in Pennsylvania has subsequently expressed any

dissenting view.'*? However, this Court should be aware

that the Supreme Court of Pennsylvania has granted

10 The only exceptions appear to be Ricco v. Shell Oil Co., 180

N.J. Super. 399, 434 A.2d 1151 (1981), and Frankard v. Amoco

Oil Co., 116 Wis. 2d 254, 342 N.W.2d 247 (1983). However, neither

court addressed the jurisdictional issue. Indeed, in Ricco, the

plaintiff took the position that the New Jersey Franchise Practices

Act was the controlling law, and asserted contentions under the

PMPA only “in the alternative.” In Frankard, the Wisconsin ap-

pellate court stated that any question of whether the PMPA was

properly before the trial had been waived, even though plaintiffs

did not raise their PMPA claim until five days prior to trial.

In other state court cases cited by petitioners (Pet. at 12), the

PMPA was considered only as a collateral issue, and the courts

expressly commented that the franchisee would be compelled to liti-

gate his PMPA claims in federal court. Walters v. Chevron U.S.A.,

Inc., 154 Ga. App. 636, 269 S.E.2d 495 (1980); Bates v. Chevron

U.S.A., Inc., 151 Ga. App. 544, 260 S.E.2d 367 (1979); see also

Da Costa’s Automotive, Inc. v. Birchwood Plaza Shell, Inc., 482

N.Y.S.2d 832, 106 A.D.2d 484 (N.Y.A.D. 1984) (plaintiff did not

have standing to assert PMPA). Also, petitioners erroneously state

that Lanham v. Amoco Oil Co., 481 F. Supp. 405 (D. Md. 1979), “re-

mand{[ed] litigation to the State Court forum for trial on the

merits.” There is nothing in Lanham to support that assertion.

11 Blimelekh v. Texaco Refining & Marketing, Inc., Bus. Fran.

Guide (CCH) { 8663 at 16,751, 16,752 (C.D. Cal. 1986); Eckel v.

Atlantic Richfield Co., No. CV 85-8451 (AHS) slip op. (C.D. Cal.,

January 30, 1986); Niakan v. Samaan, 199 Cal. App. 3d 716, 245

Cal. Rptr. 24 (1988), petition for cert. filed, September 30, 1988;

Kreisher v. Mobil Oil Corp., No. A036017, unpublished portion of

opinion (Cal. App., February 5, 1988), cert. denied, ——— U.S. ——,

109 S. Ct. 244 (1988). The opinion of the court below (Pet. App. 1)

cited Niakan in support of its holding that PMPA is subject to

exclusive federal jurisdiction.

12 Johnson v. Mobil Oil Corp., 364 Pa. Super. Ct. 275, 528 A.2d

155 (1987), appeal granted, ——— Pa. ——, 544 A.2d 445 (1988).

12

an appeal on that very issue. Johnson v. Mobil Oil Corp.,

Pa. - , 544 A.2d 445 (1988).

Moreover, the distinction between exclusive and con-

current jurisdiction in PMPA cases ordinarily has little

significance, since PMPA actions may be removed to fed-

eral court in the rare instances in which they are filed

in state court. See, e.g., Lanham v. Amoco Oil Co., 481

F. Supp. at 405. The only reason the issue became im-

portant in the case at bench is that the federal court

erroneously decided not to accept removal jurisdiction.

(Pet. App. 8.) While the problems created by that error

were important to the litigants in this case, there is no

plausible argument that the issue has any more general

significance.

There is also no reason for this Court to entertain the

alleged issue relating to whether the district court’s

remand order foreclosed any subsequent decision that

jurisdiction was exclusively in the federal courts. As

demonstrated by a recent decision of this Court, the dis-

trict court’s remand order “had no relevance to [the state

court’s| inquiry into whether the pre-emption doctrine

barred the state courts from exercising their jurisdic-

tion.” Chicago & N.W. Transp. Co. v. Kalo Brick & Tile

Co., 450 U.S. 311, 315 n.5, 331-332 (1981). An order

remanding a case to the state court from which it was

removed does not imply that the case was properly filed

there, but only that it was removed “improvidently and

without jurisdiction.” 28 U.S.C. § 1447(c). No issue as

to the existence of state jurisdiction is necessary to such

a determination, and no finding as to state jurisdiction

was made by the federal judge in this case.

In sum, the petition has not demonstrated any error

by the court below or any significant conflict among

lower courts over the questions the petition purports to

present. For these reasons, and for the reasons more

fully set forth below, the petition for a writ of certiorari

should be denied.

13

II. THE COURTS THAT HAVE FOUND FEDERAL JU-

RISDICTION OVER PMPA CLAIMS TO BE EXCLU-

SIVE HAVE CORRECTLY APPLIED THE GULF

OFFSHORE DOCTRINE.

In Gulf Offshore Co. v. Mobil Oil Corp., 458 U.S. 473

(1981), this Court was asked to determine whether fed-

eral courts have exclusive jurisdiction over personal in-

jury and indemnity cases arising under the Outer Conti-

nental Shelf Lands Act (“OCSLA’’), 438 U.S.C. § 1313

et seq. Although the Court concluded that there is no ex-

clusive federal jurisdiction under OCSLA, the Court

noted the following general principles of law:

In considering the propriety of state-court jurisdic-

tion over any particular federal claim, the Court

begins with the presumption that state courts enjoy

concurrent jurisdiction . . . . Congress, however,

may confine jurisdiction to the federal courts either

explicitly or implicitly. Thus, the presumption of

concurrent jurisdiction can be rebutted by an ex-

plicit statutory directive, by unmistakable implica-

tion from legislative history, or by a clear incompati-

bility between state-court jurisdiction and federal

imterests....

Id. at 478 (citations omitted; emphasis added); see also

Hathorn v. Lovorn, 457 U.S. 255, 267-68, reh’g denied,

458 U.S. 1131 (1982) (suggesting that actions under

Sections 5 and 12(f) of the Voting Rights Act may be

subject to exclusive federal jurisdiction) .'* In determin-

13 Tn ruling that state courts have concurrent jurisdiction over

OCSLA actions, the Court noted, inter alia, that the only legisla-

tive history material urged as supporting exclusive jurisdiction

were the criticisms of two Senators who opposed the OCSLA bill.

453 U.S. at 482-83. Further, state laws had been expressly incor-

porated within the OCSLA statute (id. at 480-81), so that state

court judges would have as much or more expertise in applying

their own state law. Jd. at 484.

14The fact that exclusive jurisdiction may be implicit, rather

than explicit, shows that petitioners may not rely solely on the

statutory language that PMPA actions “may be brought” in fed-

acerca

14

ing whether federal jurisdiction may be implied from

legislative intent or federal policy, the Court also listed

three factors to be employed in the analysis:

[T]he factors generally recommending exclusive

federal-court jurisdiction over an area of federal

law include the desirability of uniform interpreta-

tion, the expertise of federal judges in federal law,

and the assumed greater hospitality of federal courts

to peculiarly federal claims....

Gulf Offshore at 483-84 (footnotes omitted; emphasis

added).

As set forth below, the principles recognized in Gulf

Offshore strongly support the ruling by the court below

that the claim under the PMPA is within the exclusive

jurisdiction of the federal courts.

A. Congress’ Express Desire for Uniformity of Inter-

pretation Strongly Supports Federal Jurisdiction

Over PMPA Cases.

The first of three Gulf Offshore factors is “the de-

sirability of uniform interpretation ....”*° In the case

of the PMPA, Congress has provided the courts with an

explicit, unmistakable declaration of federal policy, as

follows:

eral court. 15 U.S.C. §2805(a). The antitrust laws are a good

example of statute which comes under the exclusive jurisdiction

of the federal courts, General Inv. Co. v. Lake Shore & M.S. Ry.

Co., 260 U.S. 261, 287 (1922), even though the relevant enforce-

ment provision states only that persons suffering injury “may” sue

in federal court. 15 U.S.C. § 15. Charles Dowd Box Co. v. Courtney,

368 U.S. 502 (1962), did not hold that the statutory term “may” is

a “clear pronouncement of legislative intent” as petitioners contend.

(Pet. at 20.) Rather, this Court recognized that other factors must

still be considered where state jurisdiction “is not excluded by ex-

press provision... .” 368 U.S. at 508.

15 See also Note, Exclusive Jurisdiction of Federal Court in

Private Civil Actions, 70 Harv. L. Rev. 509, 511-13 (1957), cited

with approval in Gulf Offshore, 453 U.S. at 483-84 nn.12 & 13, and

Hathorn, 457 U.S. at 266 n.18.

15

In recent years, the friction between franchisors

and franchisees in marketing of motor fuels has be-

come so great that it has threatened adverse impacts

upon the Nation’s motor fuel distribution and mar-

keting system. Numerous States have initiated vari-

ous legislative actions to address these petroleum

product franchising problems. These actions have,

unfortunately, resuited in an uneven patchwork of

rules governing franchise relationships which differ

from State to State.

Needed is a single, uniform set of rules governing

the grounds for termination and nonrenewal of

motor fuel marketing franchises .... Such a set of

rules would clearly define the rights and obligations

of the parties to the franchise relationship in the

crucial area of termination of a franchise or non-

renewal of the franchise relationship.

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

U.S. Code Cong. & Admin. News 873, 877 (“Senate Re-

port”) (emphasis added). In adopting the PMPA, Con-

gress chose to preempt all inconsistent state law so that the

PMPA would provide “certainty and uniformity in... a

nationwide motor fuel distribution and marketing net-

work.” Jd. at 874; see 15 U.S.C. § 2806(a).**

These clear statements in the legislative history—as

well as the text of the PMPA itself—demonstrate that

Congress sought to provide both sides of the relationship

with the benefit of a “single, uniform set of rules” that

would replace the “uneven patchwork” of state regula-

tion. This express federal policy of uniformity is better

served if jurisdiction over PMPA is maintained exclu-

sively within the federal system, as compared to spread-

16 The fact that States are only empowered to adopt laws which

are “the same” as the PMPA, id., is not an argument against exclu-

sive jurisdiction, as petitioners contend. (Pet. at 20.) For example,

the fact that States have enacted a variety of antitrust laws does

not nullify exclusive federal jurisdiction over the Sherman and

Clayton Acts. (See n.14, supra.) The PMPA’s provision that any

State’s law must be “the same” only reinforces the principle of

uniformity.

EE EEE

16

ing jurisdiction among myriad additional courts through-

out the 50 States.1' The Congressional declaration of the

need for uniformity in the application of the PMPA dem-

onstrates the need for exclusive federal jurisdiction over

PMPA claims.

B. The Expertise of Federal Judges Over Federal

Claims Also Supports Exclusive Jurisdiction, Par-

ticularly Because The PMPA Expressly Mandates

The Application of Federal Procedural Rules.

The second Gulf Offshore factor supporting exclusive

jurisdiction is the “expertise of federal judges in federal

law... .” In contrast to OCSLA, which relies on legal

concepts drawn from each state’s law, Gulf Offshore, 453

U.S. at 484, the PMPA is exclusively the creation of the

federal government, and is intended to supplant all in-

consistent state law. See, e.g., In re Herbert, 806 F.2d

889, 892 (9th Cir. 1986). While numerous States had

previously adopted laws designed to address problems in

the petroleum franchisor-franchisee relationship, none of

those statutes were equivalent to the PMPA in its at-

tempt to provide clear and definitive guidelines. Senate

Report at 877. The PMPA is a uniquely federal statute

and one under which their prior experience and expertise

benefits the lower federal courts."

17 Where a statutory right may depend on judicial development

for its content, “the danger of legal chaos will vary directly with

the number of courts independently interpreting the right.” M.

Redish & J. Muench, Adjudication Of Federal Causes Of Action

In State Court, 75 Mich. L. Rev. 311, 332 (1976). This is an im-

portant consideration in light of the importance Congress ex-

pressly attached to uniformity in the PMPA. As noted by the

commentators quoted above, “the likelihood of varying interpre-

tations of federal law .. . is substantially reduced when only fed-

eral courts are making the interpretations.” Jd. at 332 n.88.

18 Tn its study of the division of responsibility between state and

federal courts, the American Law Institute concluded that state

judges are less exposed to the intricacies of federal substantive

law, and that federal judges have developed “an expertness in deal-

17

Indeed, the principal author of the PMPA, Congress-

man Dinglell, spoke directly to the intended role of the

federal courts in cases under the PMPA:

The key to this legisiation is the balance which is

struck by including flexibility in the grounds which

justify termination of nonrenewal and simultane-

ously requiring the franchisor prove to an im-

partial arbiter, a Federal court judge, that permissi-

ble grounds for termination or nonrenewal do in

fact exist. Franchisee rights under this bill are, as

a result, more meaningful than limitations on fran-

chisor conduct, provided in some State laws, which

are arguably more stringent... .

123 Cong. Rec. 10383 (April 5, 1977) (emphasis added).

The quoted statement is a clear declaration of the bene-

fits the PMPA’s sponsors believed would flow from having

federal courts decide issues under the PMPA, in contrast

to the existing system in which state court judges applied

state laws which were “arguably more stringent.”

In considering the “federal court expertise’ prong of

the Gulf Offshore analysis, the fact that the PMPA ex-

pressly mandates the application of federal procedural

ing with questions of federal law that comes from more extended

contact with such questions ... .” American Law Institute, Study

of the Division of Jurisdiction Between State and Federal Court

166-67 (1969).

19 The legislative history of the PMPA is thus materially dif-

ferent from OCSLA’s legislative history. Gulf Offshore, 453 U.S.

at 482-483. As the Ninth Circuit stated in Valenzuela v. Kraft, Inc.,

739 F.2d 434, 486 (9th Cir. 1984), op’n amended on denial of reh’g,

815 F.2d 570 (9th Cir. 1987), “the absence of reference to the

state courts combined with Congress’s affirmative references to the

federal courts suggests an intent to make federal jurisdiction

exclusive.” Although the legislative history sometimes refers, ge-

nerically, to “the courts,” petitioners are unable to cite even a single

instance in which the legislative history expressly or implicitly con-

templates state court jurisdiction. (Pet. at 22.) Petitioners’ asser-

tion that these statutory directives are “merely ... guidelines” (Pet.

at 24) is contradicted by the mandatory language of those statutory

provisions.

18

rules is also a material factor that supports exclusive

jurisdiction.*° See Hathorn, 457 U.S. at 267 (reference

in the Voting Rights Act to the three-judge court pro-

cedure under 28 U.S.C. § 2284); see also Valenzuela, 789

F.2d at 436 (Title VIi requires application of Fed. R.

Civ. P. 65). Even if Congress has the power to mandate

state court application of the Federal Rules of Civil Pro-

cedure,*’ feceral judges plainly have greater expertise in

anplving those Rules than do state court judges. Under

Gulf Offshore, this important factor strongly supports

the finding of exclusive federal court jurisdiction.

C. The Federal Courts Are More Hospitable to the

Delicate Balance of Competing Interests Which Con-

gress Attempted to Strike In the PMPA.

The third factor to be considered under the Gulf Of-

shore analysis is whether federal courts would be more

“hospitable” than state courts to peculiarly federal

claims. Gulf Offshore, 453 U.S. at 484. As noted above.

the PMPA is a uniquely federal statute; no other state

law is similar to the PMPA in terms of its detailed

delineation of permissible versus impermissible grounds

for termination or nonrenewal. Moreover, while many

state statutes were “arguably more stringent,” the PMPA

was intended to strike a “delicate balance” between

meaningful protections to franchisees and needed flexi-

bilitv to franchisors. Brach v. Amoco Oil Co., 677 F.2d

1218, 1220 (7th Cir. 1982); Senate Repert at 877.

20 Section 2805(d) of the PMPA (15 U.S.C. § 2805(d)) provides

that, if a franchisee prevails in an action under the PMPA, he may

be entitled to actual damages “consistent with the Federal Rules

of Civil Procedure ....” Section 2805(b)(2) of the PMPA im-

poses detailed standards to be applied to motions for a preliminary

injunction which “embraced a judicial standard utilized by the

Second Circuit.” Senate Report at 899.

21In Valenzuela, the Ninth Circuit expressly questioned whether

Congress has the power to mandate state court application of fed-

eral procedural rules. Valenzuela, 739 F.2d at 436.

19

Where, as here, federal law is being used to supplant

an existing body of state law, it is likely that federal

court judges will enforce the law in a way that is more

faithful to federal policy than to the displaced state

policy.2 Since the PMPA contains clements that were

not explicitly embodied in any existing state statutes, the

need for interpretations that will be fully sympathetic to

the entire mix of federal concerns is especially evident

under the PMPA.

Contrariwise, the potential for izhospitable treatment

by state courts is vividly illustrated in the case at bench.

Here, the state court judge expressed the opinion that the

PMPA is “lousy legislaticn.” The state court judge also

invidiously remarked that the PMPA is “a classic ex-

ample of the kind of legislation that we get out of the

Congress . ” Those statements explicitly suggested

that the PMPA’s detailed provisions were only the result

of “self-perpetuation” by elected federal representatives

and industry lobbysists. The state court judge’s bottom

line is that the PMPA is “a poorly drafted federal stat-

ute that is very hard to understand.”

While the hostility to federal legislation reflected by

such remarks is not necessarily characteristic of state

court judges as a class, such attitudes are much less likely

to be prevalent within the federal system.** The role

22 As one commentator has noted, “A third factor militating for

exclusive federal jurisdiction is the probability that the federal

courts will be more sympathetic to a new federal statute than will

the state courts, especially when the matter involved is controversial

and the national policy is likely to be accepted with reluctance by

certain groups.” Note, Exclusive Jurisdiction of the Federal Courts

In Private Civil Actions, 70 Harv. L. Rev. 509, 512 (1957) (footnote

omitted; emphasis added).

23 For example, the Ninth Circuit in rejecting a franchisee’s

claim under a parallel provision of the PMPA for a “first refusal”

purchase option noted that “Congress here seems to have known

precisely what it was doing.” Valentine v. Mobil Oil Corp., 789

F.2d at 1391.

20

Congress intended for the PMPA in a national policy

relating to motor fuel distribution requires a faithful and

evenhanded application, and strongly supports exclusive

federal jurisdiction over PMPA claims.

For the reasons stated above, the petition for a writ

of certiorari should be denied with respect to the first

“Question Presented” set forth therein.

Ill. THE DISTRICT COURT’S REMAND ORDER DID

NOT PRECLUDE THE COURT BELOW FROM DE-

TERMINING THAT ITS EXERCISE OF SUBJECT

MATTER JURISDICTION WOULD BE CONTRARY

TO CONTROLLING FEDERAL LAW.

As the second “Question Presented,” petitioners assert

that the decision by the court below \constituted a pro-

hibited “review” of the district court’s remand order,

even though petitioners acknowledge that the court below

did not reverse, vacate or modify that remand order.

(Pet. at 25.) Petitioners’ theory is that the decision

below indirectly reviewed the remand order by substitut-

ing the opinion of the court below as to the proper juris-

dictional forum. (Jd.) However, petitioners’ theory is

contradicted by applicable Supreme Court authority and

by the facts of this case.

In Chicago & N.W. Transportation Co. v. Kalo Brick

& Tile Co., 450 U.S. 311 (1981), this Court held that a

decision to remand an action to state court, after re-

moval, “had no relevance to [to the state court’s] inquiry

into whether the pre-emption doctrine barred the state

courts from exercising their jurisdiction.” Jd. at 315

n.5. Although the state court in that case concluded that

it could exercise jurisdiction over a shipper’s claim

against a railroad, the Court held that the shipper’s ac-

tion was subject to the exclusive jurisdiction of the Inter-

state Commerce Commission. 7d. at 323, 331-332. Thus,

the district court’s remand order in that case did not

constitute the last word on the subject of the proper

21

ci . , \

forum for the litigation, and the state court’s judgment

was instead reversed since the court had assumed a juris-

diction that was precluded by federal law. Jd.

By contrast, none of the cases cited by petitioners in-

volved issues of exclusive federal jurisdiction.** Neither

this Court nor any other court has ever held that a

district court may confer state court jurisdiction to hear

where Congress has expressly or implicitly decided to

limit jurisdiction to the federal courts. While 28 U.S.C.

Section 1447(d) provides that “[a]n order remanding to

state court ... is not reviewable... ,” a state court’s

inquiry into its own jurisdiction does not constitute such

a prohibited review. Since the rule against appellate

review of remand orders does not mean that they are

free from error, see, e.g., Gravitt v. Southwestern Bell

Tel. Co., 480 U.S. 728, 723, reh’g denied, 431 U.S. 975

(1977), intractable problems would be created if state

courts were compelled to adhere consistently to a flawed

analysis of the facts or law in the case, merely because

a district court expressed erroneous views in its remand

decision. The only reasonable interpretation of Section

1447(d) is simply that the remand order itself cannot be

reversed, vacated or modified by any other court, but

state courts have the same jurisdiction as they did before

removal to consider their own jurisdiction, or to decide

24 The only two cases cited by petitioners as direct authority are

Missouri Pac. Ry. v. Fitzgerald, 160 U.S. 556 (1896), and Rath

Packing Co. v. Becker, 530 F.2d 1295 (9th Cir. 1975), aff'd sub nom.

Jones v. Rath Packing Co., 430 U.S. 519 (1977). (Pet. at 26-27.)

Neither case involved an issue of exclusive federal jurisdiction. In

Fitzgerald, this Court rejected a contention that the state courts

lacked jurisdiction, but that contention was asserted solely on the

ground that the federal court improperly remanded the claim on

diversity grounds. Moreover, Rath Packing rejected a claim that

the district court’s remand order prevented the defendant from

securing a federal forum by way of a declaratory relief action.

530 F.2d at 1303, 1305-06.

22

any factual and legal issues fairly presented by the case.”

This Court recognized that principle in treating the re-

mand order as “irrelevant” to the issue of state court

jurisdiction in Kalo Brick, 450 U.S. at 315.

Petitioners also fail to present any reason to find that

the second question presented is certworthy in any way,

and the purported issue is lacking in sufficient signifi-

cance to warrant review by this Court. The alleged

issue is inextricably intertwined with the unique pro-

cedural history of this case, and is not one of general

importance or one that is subject to any significant dis-

agreement. Moreover, there is simply no reason for this

Court to accept petitioners’ invitation to broaden the

scope of Section 1447(d) beyond anything contemplated

by existing law, and the expanded rule sought by peti-

tioners would create irreconcilable conflicts with existing

law and federal policies relating to the exclusive or pri-

mary jurisdiction of federal courts and administrative

agencies.

“5 In this case, the district court’s opinion did not even address the

question of exclusive jurisdiction. Rather, the court felt that it

could not acquire removal jurisdiction over a PMPA case which

included a ‘‘non-franchisor” defendant. (Pet. App. 13-14, 22.) In

that regard, the district court’s decision is at odds with this

Court’s recent decision in Carnegie-Mellon University v. Cohill,

—- U.S. ——-, 108 S. Ct. 614 (1988), which held that pendent

claims may be remanded “when all federal-law claims in the action

have been eliminated ....” Id. at 616 (emphasis added). The dis-

senting opinion in Carnegie-Mellon expressed the view that a re-

mand would not even be statutorily authorized under those circum-

stances. Id. at 623-24.

23

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

DONALD C. SMALTZ

(Counsel of Record)

LEIGHTON M. ANDERSON

MORGAN, LEWIS & BOCKIUS

801 South Grand Avenue

Twenty-First Floor

Los Angeles, California 90017

Telephone: (213) 612-2500

Attorneys for Respondent

Thrifty Oil Co.

DATED: November 18, 1988

2

es

‘

’

APPENDIX

la

APPENDIX |

SUPERIOR COURT OF

THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

Case No. 377024

Consolidated with Case Nos.:

399 330 406 857

406 851 406 858

406 852 407 545

406 853 409 749

406 854 410 941

406 855 410 942

406 856

JACK ABADJIAN, et al.,

Plaintiffs,

v

GULF COIL CORPORATION,

a Pennsylvania corporation, et al.,

Defendants.

And Related Counterclaims, Cross-Claims

and Consolidated Actions

[Filed Jan. 16, 1986]

2a

JUDGMENT

The First Cause of Action of the Complaint herein for

declaratory relief having been severed for separate trial

to the Court without a jury; and the parties, in light of

the Court’s Memorandum Ruling of December 10, 1984,

having stipulated to all facts material to that cause of

action;

NOW, THEREFORE, it is adjudged and declared as

follows:

1. The September 30, 1980 Agreement between de-

fendant Gulf Oil Corporation (“Gulf”) and defendant

Thrifty Oil Company (“Thrifty”) was an event and an

action that gave to each plaintiff a right of first refusal

to purchase Gulf’s interest in the leased premises occupied

by the respective plaintiffs.

2. The first refusal price which each dealer is entitled

to receive from Gulf as of November 30, 1985, calculated

in accordance with the formula stipulated to by the

parties in their December 5, 1985 “Stipulation or Facts”

is as follows:

Service First Refusal

Fee Properties Station No. Price

Ball 1712 $ 82,475.00

Brown 724 $146,370.00

Eghenian 769 $198,488.00

Mazarei 1284 $304,711.00

Prouse 581 $101,599.00

Rosenstein 1099 $212,231.00

Shishmanian 392 $414,014.00

Smiderle 968 $ 45,922.00

Leaseholds

Abadjian 1311 $ 3,629.00

Ceson 334 $ 32,107.00

May 321 $ 57,718.00

Webber 316 $—10,838.00

3a

3. Each plaintiff must exercise his right of first re-

fusal within forty-five (45) days of the date that the

judgment herein becomes final. The right of first refusal

must be exercised by depositing the first refusal price,

calculated in accordance with the formula stipulated to

by the parties in the December 11, 1985 “Stipulation of

Facts,” in an escrow to be established by Gulf with in-

structions that the first refusal price is to be transferred

to Gulf upon delivery to the plaintiff of an appropriate

deed or other conveyance transferring Gulf’s interest in

the leased premises of the respective plaintiffs to each

plaintiff depositing the amount of the first refusal price.

4. The monthly rent which each plaintiff is obligated

to pay Gulf and the unpaid rent which has accrued as of

November 30, 1985, plus interest thereon at 7% per

annum, are as follows:

Accrued Rent As Of

Monthly 11/30/85 With

Plaintiff Rental Interest At 7%

Abadjian $1,083.00 $22,984.00

Ball 2,346.00 34,276.00

Brown 2,126.00 50,588.00

Ceson 2,757.00 43,327.00

Eghenian 2,636.00 21,033.00

May 1,561.81 53,150.00

Mazarei 2,674.00 75,272.00

Prouse 2,051.00 21,165.00

Rosenstein 1,221.00 16,519.00

Shishmanian 2,743.00 99,744.00

Smiderle 1,370.00 4,413.00

Webber 2,348.67 (plus 76,951.00

gallonage rent of

1¢ per gallon over

65,000 gallons)

5. Each of the plaintiffs is occupying the service sta-

tion property he leased from Gulf under the terms of an

expired lease. Any plaintiff not exercising the right of

4a

first refusal hereinabove provided for is obligated to

vacate the leased premises immediately after the right

of first refusal granted by Gulf has expired, and each

plaintiff shall be obligated at the time the first refusal

right expires without having been exercised to pay Gulf

the amount of accrued rent and unpaid interest thereon

at 7% per annum.

6. This Court shall retain on-going and continuing

jurisdiction to determine the first refusal prices at which

Gulf must make offers to the plaintiffs when the judg-

ment herein becomes final. Such final first refusal prices

shall be determined by the Court in accordance with the

formula stipulated to by the parties in their December

11, 1985 “Stipulation of Facts.”

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7. This judgment resolves the conflicting claims of

plaintiffs and Thrifty in properties owned by Gulf. For

this reason, prejudice to the parties can be avoided only

by speedy resolution of any appeal of this judgment.

Accordingly, this Court respectfully requests that any

appeal be handled by the Court of Appeal on an expedited

basis.

Dated: Jan 15,1986 /s/ Ronald E. Swearinger

RONALD E. SWEARINGER

Judge

Los Angeles County

Superior Court