The U.S. Supreme Court on March 2 unanimously held that a franchisee that stays in business cannot sue for constructive termination under the Petroleum Marketing Practices Act. The court also decided that a franchisee waives its constructive nonrenewal claim where it actually enters into a renewal agreement.
In Mac’s Shell Service Inc. v. Shell Oil Products Co. LLC , service station franchisees sued their franchisor, Motiva Enterprises LLC, a joint venture of Shell Oil and two other companies, for withdrawing a volume-based rent subsidy. By withdrawing the subsidy upon renewal, the franchisees alleged their rent was escalated to a point that threatened viability. As each franchise agreement expired, Motiva offered new agreements that contained a new formula for calculating rent, which resulted in higher rent. The franchisees sued both for constructive termination and for constructive non-renewal while continuing in operation.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
