Mustang Marketing, Inc. v. Chevron Products Co.

Mustang Marketing, Inc. (“Mustang”) brought this suit against Chevron Products Company (“Chevron”) alleging a violation of the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. § 2801 et seq., with respect to a gas station (the “Service Station”) that Chevron had leased from Macerich and then franchised to Mustang. Mustang alleges that Chevron failed to comply with a provision of the PMPA requiring Chevron to assign to Mustang any option it possessed for an extension of the underlying lease after the underlying lease had expired. Additionally, Mustang alleges that Chevron violated the PMPA by entering into a subsequent lease with Macerich after ending Mustang’s franchise through expiration of the original underlying lease and lock Mustang out of the deal.

The district court granted summary judgment in favor of Chevron on all counts. Mustang brings this appeal on the questions of: (1) Whether Chevron relying upon PMPA § 2802(c)(4) can refuse to assign Mustang the option to extend the underlying lease; (2) Whether Chevron may end its franchise relationship with Mustang based upon expiration of its underlying lease with Macerich and subsequently negotiate a new underlying lease…