Fuels

Supreme Court to Hear Shell Case

Decision could affect "tens of thousands" of leases
WASHINGTON -- The Supreme Court is stepping into a dispute between Shell Oil Co. and gas station operators who claim the oil company tried to drive them out of business, reported the Associated Press. The case could affect how much leverage oil companies have to change their leases with tens of thousands of independent gas station owners, added a Bloomberg report.

The justices, in an order Monday, said they will hear arguments next year in a case involving eight Shell station operators in Massachusetts who are fighting changes in lease terms that they say were intended to [image-nocss] convert stations run by franchisees to company-owned facilities.

The station operators said Shell and Shell marketing venture Motiva Enterprises LLC used rent increases to try to end their franchise arrangements so the companies could take over operation of the stations.

The case could shape the rights of the 75,000 independent U.S. station owners. "This court's decision will be felt immediately by franchisors and franchisees across the country," the operators argued in court papers urging the Supreme Court to intervene.

A federal jury awarded the gas station operators $3.3 million. The Boston-based 1st U.S. Circuit Court of Appeals upheld some aspects of the verdict and overturned others.

The court said the station owners could press claims for "constructive termination" even though they continued to operate their franchise. The court reached the opposite conclusion on the owners' allegations of "constructive non-renewal," saying they forfeited those claims by signing new leases.

Shell, owned by Royal Dutch Shell PLC, and the station operators all appealed to the Supreme Court. The Obama administration also asked the court to intervene and rule in Shell's favor.

The case turns on provisions of the 30-year-old Petroleum Marketing Practices Act. The operators are suing under provisions in the law barring improper lease terminations. Appeals courts around the country are divided on the issue.

The cases are Mac's Shell Service v. Shell Oil, 08-240, and Shell Oil v. Mac's Shell Service, 08-372. (Click here for details.)

Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Mergers & Acquisitions

Soft Landing Now, But If Anyone Is Happy, Please Stand Up to Be Seen

Addressing the economic elephants in the room and their impact on M&A

Foodservice

Opportunities Abound With Limited-Time Offers

For success, complement existing menu offerings, consider product availability and trends, and more, experts say

Snacks & Candy

How Convenience Stores Can Improve Meat Snack, Jerky Sales

Innovation, creative retailers help spark growth in the snack segment

Trending

More from our partners