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LLC v. LGP Realty Holdings, LP

United States District Court, N.D. Illinois, Eastern Division

April 17, 2018

CATCH 26, LLC, an Illinois Limited Liability Company, GAS CAP FUELS, LLC, an Illinois Limited Liability Company, and GRAYSLAKE STOP & SHOP, LLC, an Illinois Limited Liability Company, Plaintiffs,
v.
LGP REALTY HOLDINGS, LP, a Delaware Limited Partnership, as successor by assignment from PT, LLC, BAPA, LLC and STATE OIL COMPANY and LEHIGH GAS WHOLESALE, LLC, a Delaware Limited Liability Company, Defendants.

          MEMORANDUM OPINION AND ORDER

          SHARON JOHNSON COLEMAN, UNITED STATES DISTRICT COURT JUDGE.

         The defendants' motion to dismiss [18] is granted in part and denied in part. The plaintiffs' Petroleum Marketing Practices Act (PMPA) claims are dismissed with respect to the Grayslake and Woodstock locations. The plaintiffs' PMPA claim as to the Ingleside location remains pending, and this Court exercises its supplemental jurisdiction over all of the remaining claims in this case.

         Background

         The background of this case is fully set forth in this Court's prior rulings on the plaintiff's multiple motions for preliminary restraining orders. The defendants now move this Court, through a motion filed prior to those rulings, to dismiss the plaintiffs' federal claims for failure to state a claim, to decline to exercise supplemental jurisdiction over the remaining claims, and accordingly to dismiss this action.

         Legal Standard

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint, not the merits of the allegations. The allegations must contain sufficient factual material to raise a plausible right to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569 n.14, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Although Rule 8 does not require a plaintiff to plead particularized facts, the complaint must allege factual “allegations that raise a right to relief above the speculative level.” Arnett v. Webster, 658 F.3d 742, 751-52 (7th Cir. 2011). Put differently, Rule 8 “does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), see also Fed. R. Civ. P. 8(a). When ruling on a motion to dismiss, the Court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Park v. Ind. Univ. Sch. of Dentistry, 692 F.3d 828, 830 (7th Cir. 2012).

         Discussion

         As an initial matter, the Court notes that the defendants offer a conclusory argument that the plaintiffs' federal claims must be dismissed for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), based on the plaintiffs' failure to satisfy the eligibility requirements of the PMPA. The PMPA, however, does not contain any language suggesting that compliance with the definitions contained within it is a jurisdictional prerequisite to suit. See Arbaugh v. Y&H Corp., 546 U.S. 500, 516, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006) (“[W]hen Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.”). Accordingly, the plaintiffs' satisfaction of the statutory definitions of the PMPA is not a prerequisite to this Court's exercise of subject matter jurisdiction over their federal claims and there is no basis for dismissing their claims pursuant to Rule 12(b)(1). The Court accordingly turns to the question of whether the plaintiffs are able to state a claim on which relief may be granted under the PMPA.

         The defendants contend that the plaintiffs' PMPA claims as to the Grayslake and Woodstock locations must be dismissed because those locations are not subject to the PMPA. The Court was already required to answer the question of whether the PMPA applied to the Grayslake and Woodstock locations in its October 27, 2017, opinion on the plaintiffs' motion seeking a preliminary injunction under the PMPA. At that time, the Court concluded that the express provisions of the PMPA did not apply to the Grayslake and Woodstock locations and that neither the defendants past conduct nor the cross-default provisions contained in the plaintiffs' contracts with the defendants were capable of altering that outcome. The parties subsequently completed their briefing of the present motion, adding further nuance to their arguments on these points. The present motion to dismiss occupies a different procedural posture than the prior motion, and this Court accordingly will consider the parties' renewed arguments as to the applicability of the PMPA.

         Broadly speaking, the PMPA protects the interests of franchisees by regulating when and how gas station franchises can be terminated. Under section 2801(1)(A) of the PMPA, the term franchise is defined as:

any contract-
(1) between a refiner and a distributor,
(ii) between a refiner and a retailer,
(iii) between a distributor and another ...

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