Supreme Sentiments

The U.S. Supreme Court is looking at how big oil companies are handling franchise agreements with thousands of independent gas station owners, Bloomberg news reported.

The justices asked the Justice Department this week for advice on a bid by Massachusetts gas station owners to sue Shell Oil Co. and Motiva Enterprises LLC, Bloomberg reported.

A group of station owners say Shell and Motiva used rent increases to try to end their franchise arrangements so the companies could take over operation of the stations, Bloomberg reported. If the court decides to handle it, the case has implications for about 75,000 gas owners in the U.S.

The case centers on the 1978 U.S. Petroleum Marketing Practices Act giving independent gas station owners more weight in dealing with oil companies. The station owners are suing under provisions that bar improper lease terminations.

Shell and Motiva say the station owners can’t use the provisions because they accepted new lease terms and continued to operate their franchises.

The case before the U.S. Supreme Court concerns eight of more than 50 Massachusetts station owners pressing lawsuits.

A jury awarded the group $3.3 million, most for violations of the federal petroleum-marketing law. A Boston-based federal appeals court upheld part of the award, according to Bloomberg.


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