§ 199-J — Dealer's right to deal with suppliers other than his distributor

New York § 199-J

• Jurisdiction: New York
• Law GBS: General Business
• Art. 11-B: Franchises For the Sale of Motor Fuels

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§ 199-j. Dealer's right to deal with suppliers other than his\ndistributor. 1. Any provision of a franchise which requires a dealer to\npurchase or sell products of the distributor other than motor fuel, or\nwhich prohibits a dealer from purchasing or selling such products of\npersons or firms other than the distributor, shall be null and void. Any\nperson or firm who is a distributor, or an officer, agent or employee of\na distributor, who shall threaten, harass, coerce or attempt to coerce a\ndealer for the purpose of compelling the dealer to purchase or sell such\nproducts of the distributor or to refrain from purchasing or selling\nsuch products of persons or firms other than the distributor shall be\nguilty of a violation and shall be subject to a fine in an amount up to\nfive hundred dollars for each violation.\n 2. (a) Any provision of a franchise which prohibits a dealer from\npurchasing or selling any of the alternative motor fuels set forth in\nparagraph (b) of this subdivision from a person or firm other than the\ndistributor, or limits the quantity of such motor fuel to be purchased\nfrom such other person or firm, or any provision of a franchise which\ndirectly or indirectly discourages a dealer from purchasing or selling\nsuch alternative motor fuels from such other person or firm, shall be\nnull and void as it pertains to that particular alternative motor fuel\nif the distributor does not supply or offer to supply to the dealer such\nalternative motor fuel. Nothing contained in this paragraph, however,\nshall grant to any dealer any rights, authority or obligation with\nrespect to the permissible uses of the premises or facilities owned,\nleased or controlled by a distributor pursuant to the terms of the\nfranchise.\n (b) For the purposes of this section, the term "alternative motor\nfuel" shall mean any of the following: (i) a blend of eighty-five\npercent ethanol and fifteen percent gasoline; (ii) a blend of at least\ntwo percent methyl-ester, commonly referred to as "bio-diesel", and\ndiesel motor fuel; (iii) motor fuel comprised primarily of methane,\nstored in either a gaseous or liquid state and suitable for use and\nconsumption in the engine of a motor vehicle, commonly referred to as\n"compressed natural gas"; or (iv) hydrogen.\n (c) Any person or firm who is a distributor, or an officer, agent or\nemployee of a distributor, who threatens, harasses, coerces or attempts\nto coerce a dealer for the purpose of compelling such dealer to refrain\nfrom purchasing or selling alternative motor fuel from a person or firm\nother than the distributor shall be guilty of a violation and be subject\nto a fine in an amount up to one thousand dollars for each violation.\n 3. Franchise provisions. Any provision of a franchise with a refiner\nwhich prohibits a dealer, who either directly or through an affiliate\nowns a service station including the tanks and pumps and who dedicates a\ntank for sale of unbranded motor fuel, or a distributor from purchasing\nor selling unbranded motor fuel from a person or firm other than the\nrefiner or limits the quantity of such unbranded motor fuel to be\npurchased from another person or firm or any provision of a franchise\nwhich directly or indirectly discourages a dealer or distributor from\npurchasing or selling such unbranded motor fuels from another person or\nfirm, shall be null and void. For purposes of this subdivision and\nsubdivisions four, five and six of this section the following terms\nshall have the following meanings:\n (a) "refiner" means any person, firm or corporation who owns, leases,\noperates, controls or supervises a commercial entity producing gasoline\nor diesel motor fuel;\n (b) "distributor" means any person other than a refiner or dealer who\npurchases motor fuel at a terminal facility and supplies motor fuel to\nservice stations; and\n (c) "unbranded motor fuel" means motor fuel which does not use a\ntrademark, trade name, service mark, or other identifying symbol or name\nowned by a refiner.\n 4. Labeling of unbranded motor fuels. Under any circumstances where a\ndealer sells unbranded motor fuel, the dealer shall display a sign which\nwill be visible to consumers before entering the station which states\nthat unbranded fuel is available for sale. The dealer shall also post a\nsign disclosing that such supply is unbranded on each pump dispensing\nthis fuel. The sign shall be at least eight inches by ten inches with\nletters not less than three inches in height. The sign shall be legible\nto the consumer from any point where a vehicle may be refueled. The\ndealer shall cover all logos, trademarks, or other identifying insignia\nof the refiner on each dispenser used to dispense the product from such\ntank or pump. The dealer shall not be required to deface or cover any\nother logo, trademark, or insignia at his place of business.\n 5. Sale of unbranded product. A dealer who is entitled to sell\nunbranded product shall have the right to mix in any storage tank motor\nfuel produced or supplied by two or more refiners, including his or her\nrefiner, as long as such mixture is stored separately from the refiner's\nsupply and is sold as unbranded. A dealer who is entitled to sell\nunbranded product shall have the right to mix motor fuel purchased from\na source other than his or her refiner without regard to whether said\nmotor fuel was sold under or carries any brand, trademark, tradename, or\nother similar designation. A dealer shall retail such a mixture as\n"unbranded", "no brand", or other similar designation indicating that\nthe motor fuel does not carry a brand, trademark, tradename, or other\nsimilar designation. A franchisee who markets such a mixture shall be\nsubject to the posting and labeling requirements of this article and\narticle sixteen of the agriculture and markets law. Any violation of\nsection one hundred ninety-two-b of the agriculture and markets law by a\ndealer in regards to the marketing of unbranded fuel under this section\nshall not be deemed a violation of the refiner under subdivision six of\nsuch section.\n 6. Sale of refiner's product. A dealer who has sold motor fuel other\nthan that of the refiner by dispensing such motor fuel from a storage\ntank, underground or otherwise, or container or receptacle, shall follow\nthe procedures set forth in this section before using such storage tank,\ncontainer, or receptacle for dispensing the branded motor fuel of the\nrefiner. Before using such tank to dispense the refiner's fuel, the\ndealer shall first empty the tank. The dealer may then use such tank to\ndispense motor fuel represented to be the product of such refiner. With\nrespect to retail gasoline stations, the term "empty the tank" as used\nin this section means that the pump, dispenser, device, or other\nequipment normally used to dispense or pump motor fuel from the storage\ntank into a motor vehicle has reduced the fluid level in the storage\ntank to the point where any additional special equipment, such as a\nvacuum pump, would be necessary to draw out the remaining residue of\nmotor fuel in the tank. The refiner, or his or her employee or agent,\nshall have the right to inspect the tank to ensure that it is empty in\naccordance with this section and that the labeling requirements of this\nsection are met.\n