Bogosian v. Gulf Oil Corp.

62 F.R.D. 124, 18 Fed. R. Serv. 2d 98, 1973 U.S. Dist. LEXIS 10566
CourtDistrict Court, E.D. Pennsylvania
DecidedDecember 19, 1973
DocketCiv. A. Nos. 71-1137 and 71-2543
StatusPublished
Cited by41 cases

This text of 62 F.R.D. 124 (Bogosian v. Gulf Oil Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bogosian v. Gulf Oil Corp., 62 F.R.D. 124, 18 Fed. R. Serv. 2d 98, 1973 U.S. Dist. LEXIS 10566 (E.D. Pa. 1973).

Opinion

MEMORANDUM OPINION AND ORDER

VanARTSDALEN, District Judge.

Plaintiffs seek class action certification on behalf of a nationwide class consisting of all present and former retail gasoline service station dealers who lease or have leased their respective stations from any of the defendant oil companies.1 The basis of the complaints is that all defendants as landowner-lessors impose illegal tie-in agreements in the leasing of their respective service stations by requiring the lessees to buy and sell only the gasoline supplied by their respective lessors. Plaintiffs 2 contend that they are precluded from purchasing their wholesale gasoline requirements in a free and open market, thereby permitting defendant oil companies to unilaterally impose excessive wholesale prices to the financial detriment of the lessees.

Oral argument for class action certification was first held in January of 1973, at which time plaintiffs’ counsel announced that they desired to “streamline” the cases in respect to the nature of the claims and description of the class.3 Plaintiffs’ counsel stated:

[128]*128The single, solitary claim in this class action is as follows: The defendant franchisors acting in concert have maintained a uniform policy of requiring all those who lease, sublease or renew such lease or sublease of defendants’ service station to do the following things:

First, to license the use of defendant’s trademark.
Second, to sell only the defendant’s gasoline.
Third, not to sell gasoline purchased from any other source under that trademark.
Fourth, to purchase all such gasoline at prices unilaterally and subjectively determined by the defendant franchisors from time to time.
That, Your Honor, is our claim. All other claims, including those involving real estate monopoly and TBA products, are abandoned.4

Because of the drastic alterations in the nature of the claims, as well as the stated intention of joining other major oil companies as parties defendant and the proposed withdrawal of George Hack, as a class-plaintiff, leave to amend was granted, with leave to refile motions for class certification. Thereafter full briefing was filed and additional oral argument heard.

The major thrust of the complaints is that all of the major oil companies “through a course of interdependent consciously parallel action” have engaged in illegal tying agreements in connection with the leasing of company-owned service stations, the effect of which is that the lessee operators are forced to buy their gasoline supplies exclusively from their respective lessors. Jurisdiction is founded on Sections 4 and 16 of the Clayton Act, 15 U.S.C. § 15 and § 26 and Section 1 of the Sherman Act, 15 U.S.C. § I-

Plaintiffs contend that they should be permitted to purchase their supplies of gasoline products from any oil company or distributor they choose. They further contend that all gasoline, subject only to minor formula variations, is the same and thus a fungible commodity regardless of by whom it is produced, refined or distributed. Consequently, plaintiffs argue that not only should they be permitted to purchase gasoline from whomever they choose, but they should have the right to sell any brand of gasoline from the lessors’ trademarked pumps and tanks and to sell other gasoline under different trademark brand names on the leased premises, subject only to the owners of the trademarks granting licenses to the respective lessees and imposing reasonable quality controls over the sale of the licensors’ trademarked brand name gasolines.

Defendants concede that a trademark protection clause in one form or another is contained in every lease agreement or arrangement between the defendant oil companies and their respective lessees.5 These clauses are the primary basis for plaintiffs’ claims of illegal tying agreements. In general, the trademark protection clauses, however worded, prohibit a lessee from selling any gasoline under the lessor’s trademarked brand name or from any of the pumps or tanks bearing lessor’s trademark or brand name or insignia, unless such gasoline is sold and supplied to lessee by the lessor. Defendants, relying on the Lanham Act, 15 U.S.C. § 1055, 1064 and various state statutes, contend they not only have the right, but also the duty to prohibit the sale of gasoline under a particular trade[129]*129mark brand name unless such gasoline is supplied by the company owning the trademark and brand name rights.

Plaintiffs contend that all gasoline of a stated octane rating is substantially the same and, therefore, constitutes a fungible commodity.6 Rather than an absolute prohibition against the sale of one company’s gasoline under another’s trademark or brand name, plaintiffs assert that the holder of the trademark may do no more than license use of its trademark and brand name, specify its unique formula, if any, and police quality controls over the gasoline being sold under its brand name. This portion of plaintiffs’ argument is founded upon the principles of Siegel v. Chicken Delight, Inc., 448 F.2d 43 (9th Cir. 1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1172, 31 L. Ed.2d 232 (1972). Plaintiffs contend that the agreements are per se illegal tying agreements as distinct from exclusive dealing requirements contracts under the doctrines of Warriner Hermetics, Inc. v. Copeland Refrigeration Corp., 463 F.2d 1002 (5th Cir.), cert. denied, 409 U.S. 1086, 93 S.Ct. 688, 34 L.Ed.2d 673 (1972).

Plaintiffs claim that the trademark protection clauses, constituting per se antitrust violations, and the “interdependent consciously parallel action” of all defendants warrant class certification. Defendants counter with the assertion that no lease or other agreement by its terms, express or implied, purports to prohibit plaintiffs or any proposed class member from selling another company’s gasoline products on the leased premises so long as there is no trademark or brand name violation. Plaintiffs, while apparently conceding that there is no express contractual prohibition against sale of competing brands on the leased premises, point out the practical impossibility of so doing because of short-term leases, lease restrictions on improvements and alterations to the demised premises, inability of lessees to make substantial capital investments, zoning restrictions, and rental payments based on sales of lessor’s gasoline. Plaintiffs finally assert that no lessee has ever successfully installed pumps and tanks of another oil company on a service station leased from one of the defendants, and sold thereon a gasoline brand name other than lessor’s. Defendants counter with the argument that no lessee has ever sought or made any attempt to sell another oil company’s gasoline from a leased property.

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Bluebook (online)
62 F.R.D. 124, 18 Fed. R. Serv. 2d 98, 1973 U.S. Dist. LEXIS 10566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bogosian-v-gulf-oil-corp-paed-1973.