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KHAN v. STATE OIL CO.

November 13, 1995

BARKAT U. KHAN and KHAN & ASSOCIATES, INC., an Illinois corporation, Plaintiffs,
v.
STATE OIL COMPANY, a corporation, Defendant.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 Before the court are the parties' cross-motions for summary judgment on Count II, and Defendant State Oil Company's ("State Oil") motion for summary judgment on Counts I and IV. Also before the court are State Oil's motion to strike Plaintiff's expert report, its motion to bar that expert's testimony, and its motion in limine regarding that expert's testimony. Plaintiff has indicated that he will voluntarily dismiss Count III.

 I. BACKGROUND

 Plaintiffs Barkat U. Kahn ("Kahn") and Kahn & Associates, Inc. ("K&A") (collectively "Plaintiffs") bring this action against State Oil claiming damages for violations of the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. §§ 2801-41 (Count I), the Sherman Antitrust Act ("Sherman Act"), 15 U.S.C. § 1 (Count II), and for breach of contract (Count IV). The court exercises jurisdiction over the PMPA and Sherman Act claims pursuant to 28 U.S.C. § 1331, and over the contract claim under its supplemental jurisdiction pursuant to 28 U.S.C. § 1367.

 On January 20, 1992, Khan and State Oil entered a written lease and supply agreement ("Agreement") regarding a gasoline service station (the "Station"). In relevant part, paragraph 31 of the Agreement provides:

 
In order to assist in maintaining the competitive position of both Landlord and Tenant, The [sic] Landlord will from time to time establish a recommended retail pump price for each type of gasoline sold at the location. The Landlord shall charge the Tenant for each transport of gasoline at the recommended retail pump price less margin and sales tax. The Tenant's margin will be $ 0.0325 (three and 1/4 cents) per gallon. In the event the Tenant elects to sell at retail at a price in excess of the recommended retail pump price established by the Landlord, the Tenant shall pay the Landlord a sum equal to the difference between the retail pump price at which the gasoline in question has been sold, and the recommended retail pump price established by the Landlord multiplied by the number of gallons sold. In the event the Tenant elects to sell at a retail pump price below the recommended retail pump price established by the Landlord, the Tenant shall not be entitled to a reduction in price to cover the difference.

 The Agreement also provides for rent in the amount of $ 7,500 per month in 1992, $ 8,000 per month in 1993, and $ 8,500 per month in 1994.

 After execution of the agreement, Khan took possession of the Station and remained in possession from January 1992 to February 1993. During that time, pursuant to the Agreement, Plaintiffs purchased from State Oil and resold various grades of gasoline. Both parties agree that Khan was a franchisee and State Oil was a franchisor under the definitional provisions of the PMPA.

 Khan removed State Oil's action to federal court, arguing that the PMPA applied. On May 12, 1993, the court denied State Oil's motion for summary judgment, because the court had not determined that, as a matter of law, State Oil's January 27, 1993 notice was reasonable. The court found that it did not have jurisdiction over State Oil as a plaintiff franchisor under the PMPA because the PMPA grants jurisdiction only over franchisee actions. State Oil Co. v. Khan, 839 F. Supp. 543 (N.D. Ill. 1993). By order of December 3, 1993, this court remanded the action back to DuPage County. In addition to the instant case in federal court, Khan filed state counterclaims and a third-party complaint in the remanded state collection action.

 After the state court appointment of the receiver, State Oil issued a second notice of termination on May 29, 1993, providing for termination effective September 3, 1993. The receiver ran the Station from February until November 1993.

 II. DISCUSSION

 Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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." Fed. R. Civ. P. 56(c); Transportation Communications Int'l Union v. CSX Transp., Inc., 30 F.3d 903, 904 (7th Cir. 1994). The court evaluates all evidence in the light most favorable to the non-movants. Serfecz v. Jewel Food Stores, 67 F.3d 591, 1995 WL 567135, at * 3 (1995). To withstand summary judgment, disputed facts in a case must be those that might affect the outcome of the suit. Tolle v. Carroll Touch, Inc., 23 F.3d 174, 178 (7th Cir. 1994). Summary judgment is not a discretionary remedy and must be granted when the movant is entitled to it as a matter of law. Anderson v. P. A. Radocy & Sons, Inc., 67 F.3d 619, 1995 WL 572914, at *2 (7th Cir. 1995). In the instant case, considering all facts in the light most favorable to the non-movants, there are no genuine issues of material fact which would allow this case to withstand summary judgment.

 A. K&A as a Party

 As a preliminary matter, State Oil contends that K&A is not a proper plaintiff in this action because the Complaint alleges a contractual relationship only between Khan and State Oil. The PMPA offers protections only to a "franchisee," which is defined as "a retailer or a distributor . . . who is authorized . . . under a franchise . . . to use a trademark in connection with the sale . . . or distribution of motor fuel." 15 U.S.C. § 2801(4). The PMPA defines a "franchise" only in terms of a contractual relationship. 15 U.S.C. § 2801(1)(B). Khan was the only "retailer or distributor" in a contractual relationship with State Oil. Because K&A was not engaged in a contractual relationship with State Oil, it is not a protected "franchisee" under the PMPA. Thus, it is not a proper plaintiff under Count I of the Complaint.

 Count II of the Complaint alleges a violation of antitrust law. State Oil contends that K&A does not have standing to bring this count because there was no contractual relationship between State Oil and K&A. Because antitrust law is designed to prevent many types of injuries, rather than simply contractual injury, courts should generally focus on antitrust injury requirements, rather than traditional contractual standing requirements, when deciding antitrust cases. See Southwest Suburban Bd. of Realtors v. Beverly Area Planning Assoc., 830 F.2d 1374, 1377 n.1 (7th Cir. 1987). Because K&A may have been in a position to suffer potential antitrust injury, the court will not dismiss K&A's Count II, and will consider that count as it applies to both Khan and K&A.

 In sum, K&A does not have standing to bring Counts I and IV. As such, the court considers Counts I and IV as if they were ...


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