McGuire Oil Co. v. Mapco, Inc.

958 F.2d 1552, 1992 WL 69643
CourtCourt of Appeals for the Eleventh Circuit
DecidedApril 24, 1992
DocketNo. 91-7235
StatusPublished
Cited by103 cases

This text of 958 F.2d 1552 (McGuire Oil Co. v. Mapco, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1992 WL 69643 (11th Cir. 1992).

Opinion

KRAVITCH, Circuit Judge:

McGuire Oil Company, Delta Oil Company 1 and Diamond Gasoline Stations (“plaintiffs” or “appellants”) brought suit in the Circuit Court of Mobile County, Alabama, against Mapco, Inc.,2 and Mapco Petroleum, Inc. (“Mapco”), seeking damages and injunctive relief for Mapco’s violations of the Alabama Motor Fuel Marketing Act (“AMFMA”), Ala.Code § 8-22-1, et seq. Mapco removed the case to federal district court on diversity grounds and counterclaimed against the plaintiffs, alleging violations of the Sherman Anti-Trust Act, 15 U.S.C. § 1 et seq., the Robinson-Patman Price Discrimination Act, 15 U.S.C. §§ 13, 13b, 21a, the AMFMA and the Alabama Unfair Trade Practices Act (“AUTPA”), Ala. Code § 8-10-1, et seq.

The district court granted summary judgment in favor of Mapco on plaintiffs’ AMFMA claim and summary judgment in favor of the plaintiffs on Mapco’s counterclaim. 763 F.Supp. 1103 (S.D.Ala.1991). The court also denied plaintiffs’ motion for sanctions under Rule 11 of the Federal Rules of Civil Procedure. Plaintiffs appeal the district court’s summary judgment on their AMFMA claim and the court’s denial of their Rule 11 motion. Mapco appeals the court’s grant of summary judgment on its counterclaim. We affirm the district court’s grant of summary judgment on Mapco’s counterclaim, as well as the court’s denial of plaintiffs’ motion for Rule 11 sanctions. We certify to the Alabama Supreme Court questions of law determinative of plaintiffs’ claims under the AMFMA.

I. BACKGROUND

Appellants are petroleum wholesalers or “jobbers” engaged in the wholesale and retail sale of branded gasoline. Mapco Petroleum, a wholly owned subsidiary of Mapco, Inc., is a Delaware corporation, qualified to do business in Alabama, that is engaged in the retail sale of unbranded petroleum products in Alabama. At all times relevant to this dispute, Mapco sold its products at three or four retail locations in the Mobile, Alabama área. It is unclear how many retail gasoline outlets exist in Mobile.

On May 8, 1984, the Alabama Legislature passed the AMFMA, section 6 of which states:

[i]t shall be unlawful for any person engaged in commerce in this state to sell or offer to sell motor fuel below cost or to sell or offer to sell it at a price lower than the seller charges other persons on the same day and on the same level of distribution, within the same market area, where the effect is to injure competition.

Ala.Code § 8-22-6. Subsequent to the enactment of the AMFMA, the plaintiffs, who, as members of the Alabama Oilmen’s Association (“AOA”), were instrumental in [1555]*1555the Act’s passage, began to monitor the sales of gasoline in the Mobile area to discover any below-cost sales of gasoline. As a general matter, Mapco alleges that representatives of the plaintiffs contacted those gasoline sellers perceived by plaintiffs as selling gas below cost and demanded that they raise their gas prices above cost, threatening litigation under the AMFMA if they did not comply. See, e.g., McGuire Depo., Folder 3, at 203-206; R10-180.

Mapco in particular became the object of plaintiffs’ efforts. As alleged by plaintiffs and admitted by Mapco, Mapco was selling gas one to two cents below cost at its Old Shell Road and St. Stephen’s Road retail outlets during January, 1985. As alleged by Mapco and admitted by plaintiffs, plaintiffs initiated a series of contacts with Map-co in an effort to get it to cease its below-cost pricing.

For example, Angie Sullivan, a pricing coordinator for Mapco, testified that she received telephone calls from James McGuire of appellant McGuire Oil alerting Sullivan to Mapco’s possible violation of the AMFMA, requesting Mapco to raise prices and threatening litigation if Mapco did not comply. Sullivan Depo., Folder 2, at 128-131. Larry Hill, area manager for Mapco, testified that he received similar communications, Hill Depo., Folder 4, at 48-51, 84-87, as did Joe Lassiter, the Store Manager of Mapco’s Old Shell Road location. Id. Plaintiffs’ attorney wrote James Murl Ken-namore, Mapco’s General Manager, concerning Mapco’s below-cost pricing. Ken-namore Depo., Folder 7, at 107-109. Plaintiffs also contacted Mapco and other suspected below-cost sellers of gas through the AOA, which demanded that those sellers increase their prices or face litigation. Boom Depo., Folder 2, at 29.

II. COURSE OF PROCEEDINGS

Having failed to convince Mapco to increase its prices, plaintiffs filed suit in state court on March 14, 1985, alleging Mapco’s violation of section 6 of the AMFMA and seeking injunctive relief, compensatory damages3 and punitive damages in the amount of $7.5 million under section 17(b) of that statute. Defendants removed the case to federal district court on March 14,1985, and subsequently filed an answer, contending, inter alia, that the AMFMA violated the United States and Alabama Constitutions.

The parties agreed to stay the proceedings pending determination by the Alabama Supreme Court of the constitutionality of the AMFMA under federal and state law. That court upheld the AMFMA’s constitutionality in State ex rel. Galanos v. Mapco Petroleum Co., 519 So.2d 1275 (Ala.1987).

On or about July 1988, the parties entered into a stipulation whereby Mapco agreed to raise its gas prices pending resolution of the lawsuit. In the six months following execution of the stipulation, Map-co lost a considerable amount of its sales volume.

On July 29, 1988, Mapco counterclaimed against the plaintiffs, seeking $4 million in compensatory damages and $40 million in punitive damages. Mapco contended that plaintiffs, by giving Mapco a “Hobson’s choice” between raising its prices and enduring vexatious and costly litigation, had conspired to fix gas prices in violation of section 2 of the Sherman Anti-Trust Act, the Robinson-Patman Act, the AUTPA and the AMFMA.4

[1556]*1556At the close of discovery, Mapco moved for summary judgment on plaintiffs' AMFMA claim, arguing that Mapco’s actions were covered by the “meeting competition” defense contained in section 8 of the AMFMA; that Mapco had not acted with the intent to injure competition required by the AMFMA; that Mapco had in fact not injured competition, as required by the AMFMA; and that the AMFMA was preempted by federal antitrust law.5

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Bluebook (online)
958 F.2d 1552, 1992 WL 69643, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcguire-oil-co-v-mapco-inc-ca11-1992.