Nevada Deanza Family Limited Partnership v. Tesoro Refining & Marketing Company LLC

CourtDistrict Court, N.D. California
DecidedJuly 27, 2020
Docket5:19-cv-03773
StatusUnknown

This text of Nevada Deanza Family Limited Partnership v. Tesoro Refining & Marketing Company LLC (Nevada Deanza Family Limited Partnership v. Tesoro Refining & Marketing Company LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nevada Deanza Family Limited Partnership v. Tesoro Refining & Marketing Company LLC, (N.D. Cal. 2020).

Opinion

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7

8 NEVADA DEANZA FAMILY LIMITED PARTNERSHIP, Case No. 5:19-cv-03773-NC 9 Plaintiff, and ORDER GRANTING 10 DEFENDANTS’ MOTION FIRST ELEMENT FUEL, INC., TO DISMISS THE 11 COMPLAINT-IN- Plaintiff-in-Intervention, INTERVENTION; 12 GRANTING LEAVE TO v. AMEND 13 TESORO REFINING & MARKETING LLC, Re: Dkt. No. 60. 14 MARATHON PETROLEUM CORPORATION and MARATHON 15 PETROLEUM COMPANY LP., 16 Defendants.

17 18 Plaintiff Nevada DeAnza Family Limited Partnership brings this case against 19 Defendants Tesoro Refining & Marketing Company and Marathon Petroleum Corporation 20 for rescission of contract and fraud arising out of a gas station franchising agreement. 21 Intervening Plaintiff FirstElement Fuel, who leased portions of the gas station from NDF, 22 intervened in the lawsuit. Before the Court is Defendants’ motion to dismiss 23 FirstElement’s complaint-in-intervention for lack of jurisdiction due to the presence of a 24 political question under Rule 12(b)(1) and for failure to state a claim under Rule 12(b)(6). 25 The Court concludes that no political question is present, but that FirstElement fails to 26 state a claim under Rule 12(b)(6) as to all of its causes of action. Accordingly, the Court 27 GRANTS Defendants’ motion to dismiss and GRANTS FirstElement leave to amend the 1 I. Background 2 A. Factual Allegations 3 The following facts are alleged in the complaint-in-intervention. Dkt. No. 54. The 4 Court takes these allegations as true for the purposes of deciding this Order. Cahill v. 5 Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). 6 Plaintiff Nevada DeAnza Family Limited Partnership (“NDF”) owns a fueling 7 station in Sunnyvale, California. See Dkt. No. 54 ¶ 3. In July 2016, NDF agreed to lease 8 part of the Sunnyvale Station to Plaintiff-Intervenor FirstElement to install hydrogen fuel 9 dispensers; their agreement is known as the Site Lease. Id. ¶¶ 3, 7. The site plan for the 10 Sunnyvale Station showed that the hydrogen dispensers were to be located under its 11 canopy because that was the only possible location for hydrogen dispensers at the station. 12 Id. ¶¶ 6, 7, 31, 36. Since 2016, FirstElement and NDF have expended tremendous time 13 and money to install hydrogen dispensers at the Sunnyvale Station. Id. ¶ 7, 42–51. 14 Also in 2016, NDF began negotiating an exclusive petroleum supply and branding 15 contract with Defendant Tesoro Refining & Marketing Company. Id. ¶ 5, 32. Before 16 agreeing to brand the Sunnyvale Station, NDF informed Tesoro that it intended to install a 17 hydrogen dispenser under the canopy. Id. ¶ 6, 35–41. Tesoro did not object or otherwise 18 indicate that the location of the hydrogen dispenser was an issue. Id. In December, Tesoro 19 and NDF signed the Retail Service Agreement (RSA) for rebranding the Sunnyvale Station 20 as a “Mobil” station. Id. ¶ 8, 32, 53. Following the rebranding, NDF informed Tesoro and 21 Tesoro’s successor, Defendant Marathon Petroleum Corporation, about its hydrogen 22 dispenser plans and received no objection. Id. 23 In 2019, Marathon notified NDF for the first time that NDF would not be allowed to 24 install hydrogen dispensers under the canopy. Id. ¶ 9, 68. The following year, Tesoro 25 terminated the RSA and stated that the reason for the termination was the construction of 26 the hydrogen dispensers. Id. ¶ 11, 73. Dkt. No. 54, Ex. 3. As a result, the NDF lost its 27 supply of petroleum and lost its branding contract. See Dkt. No. 54 ¶ 11. FirstElement 1 for the hydrogen dispensers and $607,500 in missed credit generation. Id. ¶¶ 84, 85. 2 B. Procedural Background 3 NDF filed its complaint against Defendants for rescission of contract, fraud, and 4 violation of California’s Unfair Competition Law. See Dkt. No. 1. FirstElement 5 subsequently moved to intervene in the case. See Dkt. No. 44. After the court granted the 6 motion, FirstElement filed a complaint in intervention against Defendants for: (1) 7 interference of contractual relationship, (2) violation of California’s Unfair Competition 8 Law, and (3) declaratory judgment. See Dkt. No. 54. 9 All parties consented to the jurisdiction of a magistrate judge under 28 U.S.C.A. § 10 636(c). See Dkt. Nos. 5, 12, 46. 11 II. Legal Standard 12 A. Federal Rule of Civil Procedure 12(b)(1) 13 Dismissal under Federal Rule of Civil Procedure 12(b)(1) is appropriate when the 14 complaint fails to establish the court’s subject matter jurisdiction over the action. Roberts 15 v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987). The court has a “responsibility to 16 decide[] cases properly before it, even those it would gladly avoid.” Zivotofsky ex rel. 17 Zivotofsky v. Clinton, 566 U.S. 189, 195 (2012). However, the “presence of a political 18 question deprives a court of subject matter jurisdiction.” Corrie v. Caterpillar, Inc., 503 19 F.3d 974, 980 (9th Cir. 2007). This “narrow” exception, known as the political question 20 doctrine, “excludes from judicial review those controversies which revolve around policy 21 choices and value determinations constitutionally committed for resolution to the halls of 22 Congress or the confines of the Executive Branch.” Zivotofsky, 566 U.S. at 195; Japan 23 Whaling Ass’n v. Am. Cetacean Soc., 478 U.S. 221, 230 (1986). 24 B. Federal Rule of Civil Procedure 12(b)(6) 25 A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal 26 sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). On a 27 motion to dismiss, all allegations of material fact are taken as true and construed in the 1 need not accept as true “allegations that are merely conclusory, unwarranted deductions of 2 fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th 3 Cir. 2008). A complaint need not give detailed factual allegations but must contain 4 sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its 5 face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 6 when it “allows the court to draw the reasonable inference that the defendant is liable for 7 the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If a court grants a 8 motion to dismiss, the plaintiff should be given leave to amend unless the pleading could 9 not possibly be cured by the allegation of other facts. Lopez v. Smith, 203 F.3d 1122, 1127 10 (9th Cir. 2000). 11 III. Discussion 12 A. Statutory Interpretation of PMPA § 2807 13 Whether hydrogen fuel is considered a renewable fuel under the Petroleum 14 Marketing Practices Act (PMPA), 15 U.S.C.A. § 2807, is a central question to the motion 15 before the Court. Plaintiff-in-intervention FirstElement contends that hydrogen should be 16 protected by the PMPA, which would mean that its installation of hydrogen dispensers at 17 NDF’s gas station does not violate any agreement with the defendants.

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Nevada Deanza Family Limited Partnership v. Tesoro Refining & Marketing Company LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nevada-deanza-family-limited-partnership-v-tesoro-refining-marketing-cand-2020.