TACOMA, Wash. -- U.S. District Judge Marsha Pechman ruled Wednesday against BP's request for a temporary restraining order that would have prohibited station owner Hatem Shalabi--the owner of a string of western Washington gas stations that ARCO had sought to shut down--from selling any other gasoline but ARCO's from the 15 stations, reported The News Tribune.
BP owns the ARCO brand.
ARCO cut off Shalabi's supply of fuel last month after he failed to pay $1.3 million the oil company said he owed for gasoline delivered to his stations. Shalabi claims the $1.3 million represents only a two-day supply of fuel. He said he was seeking new funds when ARCO stopped delivering fuel.
The company sought a court order to prevent Shalabi from selling unbranded gasoline at the stations, said the report. Shalabi found other suppliers after ARCO stopped delivering.
The oil company argued that Shalabi is bound by deed restrictions on the stations he bought from ARCO requiring him to sell only ARCO gasoline at the stations.
The judge said she didn't agree with ARCO's argument that it would suffer irreparable harm if Shalabi sold other gasoline at the stations, the report said.
Shalabi had covered or removed ARCO signs at the stations after the company quit supplying him fuel. But ARCO argued the stations were still identifiable as ARCO stations because of their distinctive color schemes and because some logos in the ARCO-branded ampm convenience stores on the sites were still plainly visible, said the report.
Shalabi said BP has accomplished its aim of shutting him down in most cases because it sent letters to his wholesale gasoline supplier suggesting they could become a party to the legal action if they continued to supply him fuel.
The station owner's attorney, Texas lawyer David Schiller, told the News Tribune that he hopes the judge's denial of BP's request will persuade wholesalers to once again supply him with gasoline.
ARCO could seek a temporary injunction against Shalabi, but such a legal move would trigger more and longer legal proceedings, the newspaper said.
In a statement provided to CSP Daily News, BP said it "believes the deed restrictions are valid and enforceable, as numerous other courts have already ruled. BP will further continue to enforce as necessary its rights under the deed restrictions and its contractual rights because we think this is important to the brand and to our customers in the Washington market."
BP also said that the court denied the exceptional remedy of a temporary restraining order. It did so because the Shalabi locations are now operating in compliance with the deed restrictions in place. Those restrictions prohibit the properties from selling non-ARCO gasoline, but only if the stations are operating as gas stations. Currently, no gasoline is being sold from the locations.
The company added that in the court's ruling, the court did not prevent BP from seeking further relief if conditions change, and the court did not rule or even comment on the legality of the deed restrictions at issue in the case.
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