Sun Valley Gasoline, Inc. v. Ernst Enterprises, Inc., Richard H. Ernst and Eunice R. Ernst

Circuit Judge:

This appeal grows out of a dispute over the operation of a North Hollywood, California, service station. Sun Valley Gasoline, Inc. (“Sun Valley”), the station operator, filed an action against its corporate landlord and that corporation’s two stockholders (collectively “Ernst”) alleging 12 separate causes of action. Ten of these counts were premised upon Title I of the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. §§ 2801-2806 (Supp. V 1981). Title I of the PMPA imposes procedural and substantive restraints on the termination of, or failure to renew, a motor fuel-distribution franchise. The purpose of the statute is to prevent petroleum franchisors from dealing unfairly with their franchisees.

Upon Ernst’s suggestion pursuant to Fed. R.CIV.P. 12(h)(3), the court below dismissed the 10 PMPA counts for lack of subject-matter jurisdiction. Following a certification of this partial judgment under Fed.R. Civ.P. 54(b), Sun Valley appeals dismissal of its PMPA claims.

The lower court’s basis for dismissal was that Sun Valley and Ernst are not in a “franchise relationship” as defined by relevant portions of 15 U.S.C. § 2801 . This conclusion was based on a…