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BECK OIL v. TEXACO REFINING & MARKETING

May 27, 1993

BECK OIL COMPANY, INC.; DARYL BECKER, D/B/A E.P. BECKER, INC.; V.W. BOWMAN OIL CO., INC.; WABASH INDEPENDENT OIL CO., INC.; WARFIELD OIL CO., INC., PLAINTIFFS,
v.
TEXACO REFINING & MARKETING, INC., DEFENDANT.



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

OPINION

We deal here with the Petroleum Marketing Practices Act.

And the issues are raised by cross-motions for summary judgment.

I. FACTS

In early 1984, Texaco Inc. purchased Getty Oil Company which had marketed gasoline and other petroleum products under the "Getty" brand name. After the Getty acquisition, Texaco, Inc. reorganized its corporate structure. This resulted in the creation of Defendant Texaco Refining and Marketing, Inc., (TRMI) as a wholly-owned subsidiary of Texaco Inc. to perform the refining and marketing operations associated with the Texaco brand of motor fuels, as well as other petroleum products, at both the wholesale and retail levels.

Plaintiffs V.W. Bowman Oil Co., Inc., Warfield Oil CO. and Beck Oil Co. were Texaco brand distributors who had franchises with Texaco in 1984. Plaintiffs Wabash Independent Oil Co. and Becker Inc. were Getty brand distributors under Getty distributor agreements entered into in 1983. Each of the franchises were for a period of three years. As a result of the merger and Texaco's reorganization, each agreement was assigned to TRMI as of December 31, 1984.

In January 1985, TRMI decided to withdraw from marketing motor fuels at retail in a contiguous area located within the states of Illinois, Wisconsin, Indiana, and Kentucky, and to consequently terminate all franchise agreements whose marketing premises were located in the withdrawal area, effective September 30, 1985. Specifically, the withdrawal area was composed of 69 counties in Illinois, 47 counties in Wisconsin, 88 counties in Kentucky, and 74 counties in Indiana. Initially, TRMI did not withdraw from the five county Chicago metropolitan area because of its national significance; however, when a long term reasonable and economical means of supply for Chicago could not be located, TRMI withdrew from the Chicago area in 1986.

Around March 11, 1985, TRMI sent written notices to the Governors of the states within the withdrawal area notifying them of it's plans. On March 27, 1985, TRMI sent written notices of termination to all of the Texaco and Getty franchisees whose marketing premises were located in the withdrawal area.

Plaintiffs originally filed this action in 1985 as case No. 85-3437 against Texaco, Inc. Thereafter, TRMI was voluntarily substituted for Texaco Inc. as the real party in interest. By agreement, the case was dismissed in 1989; however, Plaintiffs were given six months in which to refile the action.

II. SUMMARY JUDGMENT

Under Fed.R.Civ.P. 56(c), summary judgment shall be granted if the record shows that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Black v. Henry Pratt Co., 778 F.2d 1278, 1281 (7th Cir. 1985). The moving party has the burden of providing proper documentary evidence to show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists when "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Unquestionably, in determining whether a genuine issue of material facts exists, the evidence is to be taken in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Once the moving party has met its burden, the opposing party must come forward with specific evidence, not mere allegations or denials of the pleadings, which demonstrates that there is a genuine issue for trial. Howland v. Kilquist, 833 F.2d 639 (7th Cir. 1987). "A scintilla of evidence in support of the non-movant's position is insufficient to successfully oppose summary judgment; `there must be evidence on which the jury could reasonably find for the [nonmoving party].'" Brownell v. Figel, 950 F.2d 1285 (7th Cir. 1991) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2511-12, 91 L.Ed.2d 202 (1986)).

III. ANALYSIS

The parties have stipulated that the sole issues to be resolved here are:

  1. Whether Defendant's determination to withdraw was
  made in good faith and in the normal course of
  business, as required by 2802(b)(2)(E) of the
  ...

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