District of Columbia v. ExxonMobil Oil Corp.

172 A.3d 412
CourtDistrict of Columbia Court of Appeals
DecidedNovember 2, 2017
Docket14-CV-633
StatusPublished
Cited by6 cases

This text of 172 A.3d 412 (District of Columbia v. ExxonMobil Oil Corp.) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
District of Columbia v. ExxonMobil Oil Corp., 172 A.3d 412 (D.C. 2017).

Opinions

Opinion for the court by Associate Judge Thompson.

Dissenting opinion by Associate Judge Easterly at page 436. ,

THOMPSON, Associate Judge:

This action arose when appellant District of Columbia (“the District”), asserting that it was acting “in its parens patriae capacity and through its Attorney General,” brought suit against defendant/appel-lee ExxonMobil Oil Corp. (“Exxon”) and defendants/appellees Anacostia Realty, LLC (“Anacostia”) and Springfield Petroleum Realty, LLC (“Springfield”) (affiliated entities sometimes hereafter referred to together as the “Distributors”), and Capitol Petroleum Group, LLC (“CPG”)1 for declaratory and injunctive relief for claimed violations of D.C. Code § 36-303.01(a)(6) and (11) (2012 Repl.), contained in Subchapter III of a statute known as the “Retail Service Station Act” (“RSSA”). 'The Superior Court granted defendants’/appellees’ motions to dismiss the complaint, agreeing with the defendants that the District had not “established standing through common law' parens pat-ride authority” and “does not have express or implied statutory authority” to maintain this action. The District argues that the trial court erred in dismissing the complaint. We agree and therefore reverse and remand for further proceedings.

I. Background

A. The Allegations of the Complaint

The complaint alleges that until 2009, Exxon owned a number of retail gasoline service stations located in the District, which it leased to independent retail dealers that operated the stations under franchise agreements. Under the franchise agreements, Exxon had the exclusive right to supply Exxon-branded gasoline to the retail service stations. Although refiner Exxon also had gasoline .distribution agreements with wholesale gasoline distributors in the .area, it prohibited them from supplying Exxon-branded gasoline to the franchisee retail service stations. Beginning in 2009, Exxon transferred ownership of its retail service station properties either to Anacostia or Springfield. Exxon also, assigned to Anacostia or Springfield its rights under the franchise agreements.

According to the District — and this is the gravamen of its complaint — “[t]he dealer franchise agreements, and later versions of these agreements” unlawfully “compel the independent retail dealers .operating these stations to buy their Exxon-branded gasoline exclusively from — and at prices set by” Anacostia or Springfield or CPG. The complaint further alleges that Exxon continues to enforce the unlawful exclusive-supply requirement through its distribution agreements with Anacostia and Springfield, which “allow only one supplier to supply [Exxon-branded] gasoline to each Exxon-branded gasoline station in D.C.” As a result of the dealer-franchise and distribution agreements, the complaint alleges, the defendants/appellees “set the wholesale price[ ] paid for Exxon-branded gasoline in D.C.,” depriving retail dealers who sell. Exxon-branded gasoline and “many thousands of consumers in D.C.” who purchase Exxon-branded gasoline in D.C. of “the benefits of competition in the wholesale supply of Exxon-branded gasoline.” The complaint asserts that independent retail Exxon stations cannot “purchase Exxon-branded gasoline at prices below the prices charged by” the Distributors. The complaint further asserts that of the thirty-one Exxon-branded gasoline stations in the District, all of which are owned by Anacostia or Springfield, twenty-seven are operated by independent retail dealer franchisees, all of which are subject to and restricted by the allegedly unlawful dealer-franchise and distribution agreements. According to the complaint, these independent franchisee-operated retail stations comprise about 25% of the gasoline stations in the District.

The complaint charges that the dealer-franchise agreements between the Distributors and independent retail service stations, and the distribution agreements between Exxon and the Distributors (all of which the District asserts constitute “marketing agreements” as that term is defined in the RSSA) violate two provisions of Subchapter III of the RSSA: D.C. Code § 36-303.01(a)(6) and (11). D.C. Code § 36-303.01(a)(6) states that:

[No marketing agreement shall ...] [prohibit a retail dealer from purchasing or accepting delivery of, on consignment or otherwise, any motor fuels, petroleum products, automotive products, or other products from any person who is not a party to the marketing agreement or prohibit a retail dealer from selling such motor fuels or products, provided that if the marketing agreement permits the retail dealer to use the distributor’s trademark, the marketing agreement may require such motor fuels, petroleum products, and automotive products to be of a reasonably similar quality to those- of the distributor,. and provided further that the retail dealer shall neither represent such motor fuels or products as having been procured from .the distributor nor sell such motor fuels or products under the distributor’s trademark!.]

D.C. Code § 36-303.01(a)(ll) states that “no marketing agreement shall” “[c]ontain any term or condition which, directly or indirectly, violates this subchapter.” The complaint asks for a declaration that defendants’/appellees’ marketing agreements violate these provisions of District of Columbia law and for an injunction prohibiting enforcement of the agreements. ■

B. The Trial Court’s Ruling on the Motions to Dismiss

The District filed its complaint on August 27, 2013, and appellees filed then-motions to dismiss on October 7, 2013. Asserting that the RSSA sets out “a carefully crafted enforcement scheme in which the Mayor of the District of Columbia is authorized to enforce Subchapters II 'and IV of the Act” 2 and in which “retail ser: vice station dealers are authorized to enforce Subchapter III,”3 appellees argued first that the statute makes a “clear! ] and explicit!] assignment of] separate roles,” indicating that “no public enforcement of Subchapter III was intended.” Accordingly, appellees argued, the Attorney General has no “cause of action” or “right of action” to enforce, and “no role ... in enforcing,” Subchapter III of the RSSA and that the'allegations of the complaint otherwise fail to state a claim. • -

In addition to arguing that the District lacks statutory authority to sue to enforce Subchapter III of the RSSA, appellees argued that the District in its complaint failed to allege the concrete injury necessary to establish Article Ill-type standing to maintain this suit. Appellees argued that the complaint asserts in only a “vague and undefined way” that Exxon’s and the Distributors’ conduct deprives dealers and consumers of the benefits of competition.

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Cite This Page — Counsel Stack

Bluebook (online)
172 A.3d 412, Counsel Stack Legal Research, https://law.counselstack.com/opinion/district-of-columbia-v-exxonmobil-oil-corp-dc-2017.