Portland 76 Auto/Truck Plaza, Inc. v. Union Oil Co.

153 F.3d 938, 98 Cal. Daily Op. Serv. 6428, 98 Daily Journal DAR 8897, 1998 U.S. App. LEXIS 20191, 1998 WL 484618
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 19, 1998
DocketNos. 95-35543, 95-36022
StatusPublished
Cited by8 cases

This text of 153 F.3d 938 (Portland 76 Auto/Truck Plaza, Inc. v. Union Oil Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Portland 76 Auto/Truck Plaza, Inc. v. Union Oil Co., 153 F.3d 938, 98 Cal. Daily Op. Serv. 6428, 98 Daily Journal DAR 8897, 1998 U.S. App. LEXIS 20191, 1998 WL 484618 (9th Cir. 1998).

Opinion

KLEINFELD, Circuit Judge:

A fuel wholesaler improved one leased truck stop less than others. Did this violate the Robinson-Patman Act, 15 U.S.C. § 13 et seq., or Petroleum Marketing Practices Act, 15 U.S.C. § 2801 et seq.? The lease? The Robinson-Patman Act issue turns out to be especially difficult.

I. FACTS

Unocal made two agreements with Portland 76, in 1978. It leased a truck stop in Oregon to Portland 76, and contracted to sell Portland 76 motor fuel for resale. The lease in effect at the times relevant to most of the issues in this case ran from April 1, 1991 to February 28, 1994. No option to renew was included in the lease, and it provided for automatic expiration without notice February 28, 1994. The truck stop became seedy over the years. More attractive and convenient tack stops, including Unocal truck stops, could better attract truck drivers to pull in. Portland 76’s theory of the ease was that Unocal should have improved the truck stop commensurately with other Unocal truck stops, and in letting it go downhill, breached both its lease obligations and its Robinson-Patman duty not to discriminate among the retailers to whom it sold fuel.

The lease included an extraordinarily detailed allocation of maintenance responsibilities. In addition to a general statement of responsibilities for cleaning, maintenance and replacement, the lease included an 18 page table specifying whether Unocal or Portland 76 was responsible for cleaning, maintenance or replacement of such items as “yard sign & fighting,” fight bulbs for the sign on the highway, even the hot chocolate dispensers in the restaurant. In general, the lease required Portland 76 to clean and do , light maintenance, Unocal to do heavy maintenance and replacement of equipment. The lease did not require either party to make improvements. Portland 76 was not permitted to make permanent modifications without Unocal’s written consent.

Though the lease did not entitle Portland 76 to any improvements, as a practical matter Unocal sometimes made them. Its money, after all,, came from fuel sales, not just, rent. Portland 76 asked Unocal to improve the truck stop much more than it did,-and expressed concern to Unocal about losing market share to better facilities. Some evidence suggested that the truck stop had been badly designed and built by Unocal years earlier. Unocal and Portland 76 together planned such improvements as converting-some motel rooms to conference and training rooms, redesigning the convenience store, improving fuel pumping rates, putting in a day care center, and expanding the shower and laundry facilities. A number of planned improvements were never made.

[941]*941As the Portland 76 truckstop deteriorated, Unocal improved competing truckstops. The evidence showed that big tracks had a fuel range of 1,600 to 1,800 miles on a tank, so Portland 76, near Portland, was competing with track stops as far away as Northern California. Portland 76 proved that Unocal spent much more money between 1987 and 1990 renovating and upgrading its truckstops in Redding, Sacramento, and Santa Nella, California, than on the Portland 76 truckstop.

The difference in expenditures was disproportionate to the amounts of fuel sold or rent paid at the various truckstops. The California truckstops sold more fuel, but less than twice as much, yet Unocal’s improvement expenditures were well over twice as much during 1987-90. Likewise, the rent on the California truckstops was less than twice the rent on Portland 76.

Portland 76’s market share declined relative to the California Unocal truckstops. All the Unocal truckstops had decreased sales for the relevant period, but evidence suggested that pail; of Portland 76’s sales decline was attributable to its facility becoming less attractive relative to the other Unocal facilities. The jury heard that the truckstop’s highway signs needed to be replaced, the roof leaked in the restaurant, the showers were in bad condition, the heating and air conditioning in the restaurant were inadequate, the parking lot was full of potholes, the sewage system stank on hot days, and the fuel lanes were too narrow.

Unocal got out of the truckstop business in 1993. It sold its truckstops, including Portland 76, to National Auto/Truckstops, and assigned Portland 76’s lease. National and Portland 76 agreed that National would sell it fuel, and Portland 76 made a new lease with National, in December 1993, effective upon the expiration of the Unocal agreements (though Portland 76 signed under protest).

Portland 76’s claims against Unocal went to jury trial. The jury found that Unocal breached its lease, causing $1 million in damages by the end of the term. In addition, the jury found that Unocal violated the Robinson-Patman Act in connection with the furnishing of facilities, causing the same $1 million damages as the lease violations, plus another $1,307,440 not included in the lease damages. That is, Portland 76 lost $1 million because of things Unocal was obliged to do both under the lease and under the Robinson-Patman Act, and lost another $1,307,440 because of things Unocal was not obliged to do under the lease, but was under the Act. The sum of the two damages items was trebled, pursuant to 15 U.S.C. § 15, to almost $7 million.

Though the case went to a jury, a number of issues were resolved as a matter of law. Portland 76’s Petroleum Marketing Practices Act claims were dismissed on summary judgment. Also, the court determined as a matter of law that neither the Robinson-Patman Act damages nor lease damages could accrue beyond the end of Portland 76’s lease.

Both sides have appealed. Portland 76 appeals the limitation on damages to the lease period, and dismissal of the Petroleum Marketing Practices Act claim. Unocal appeals the decision to allow the Robinson-Patman Act claim to go to the jury at all. Under Unocal’s theory, improvements to realty leased by the seller to the buyer should not be treated as discrimination in the furnishing of facilities under 15 U.S.C. § 13(e).

II. ANALYSIS

A. Robinson-Patman Act Claims

The most difficult issue in this case is whether the Robinson-Patman Price Discrimination Act applies to the truck stop as a “facility.” Portland 76 won its verdict on the theory that it does, but Unocal argues that as a matter of law, it does not.

The Robinson-Patman Act generally makes it unlawful for a wholesaler to discriminate in price between different purchasers of similar commodities, subject to a number of exceptions and to a qualified exception relating to quantity. 15 U.S.C. § 13(a). Obviously a clever wholesaler wishing to discriminate could evade a simple command by keeping the nominal price the same for everyone, but offering better terms to favored customers. And more powerful customers could, if permitted, pressure a wholesaler to do that. Several subsections of the statute deal with disguised discounts, such as com[942]

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153 F.3d 938, 98 Cal. Daily Op. Serv. 6428, 98 Daily Journal DAR 8897, 1998 U.S. App. LEXIS 20191, 1998 WL 484618, Counsel Stack Legal Research, https://law.counselstack.com/opinion/portland-76-autotruck-plaza-inc-v-union-oil-co-ca9-1998.