Graham Oil Co., an Oregon Corporation v. Arco Products Co., a Division of Atlantic Richfield Co., a Delaware Corporation

Opinion by Judge REINHARDT; Dissent by Judge FERNANDEZ.

I. INTRODUCTION

Graham Oil Co. (“Graham Oil”) appeals the judgment of the district court, which dismissed, with prejudice, all of its claims against ARCO Products Co. (“ARCO”). The claims were dismissed because Graham Oil *1246 refused to submit to arbitration as required by an arbitration clause in its distributorship agreement with ARCO.

Graham Oil contends that the arbitration clause is invalid because it requires the surrender of certain rights provided under the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. §§ 2801-2806 . Accordingly, it argues that the district court — not an arbitrator — must decide the merits of its claims under the PMPA. We agree.

II. FACTS

For nearly forty years, Graham Oil was a branded distributor of ARCO gasoline in Coos Bay, Oregon. On October 2,1990, Graham Oil and ARCO entered into a Branded Distributor Gasoline Agreement (“Agreement”), which was effective from January 1, 1991, to December 31, 1993. Among other things, the parties agreed that Graham Oil would purchase a minimum amount of gasoline each month during the two-year period of the Agreement.

On November 10, 1991, ARCO…

dissenting:

I agree with the majority that arbitration of PMPA disputes is appropriate. Where we part company is at the point where the majority decides to strike down the arbitration provision in its entirety because that provision purports to remove some remedies that would otherwise be available under the PMPA.

Graham suggests the court should evince a hostility to arbitration in eases of this type. The majority does not exactly acquiesce, but it does suggest that Graham should not be bound to arbitration at all. Why? The only reason, subliminal as it is, may be that arbitration is such a bad thing for companies like Graham that a few limitations of statutory rights (entirely satellite 1 to any dispute) will taint the whole.

In the past that kind of argument has not carried the day. Neither the Supreme Court nor this court has accepted a negative view of arbitration. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 22-23 , 111 S.Ct. 1647, 1651-56 , 114 L.Ed.2d 26 (1991); Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 226-27 , 107 S.Ct. 2332, 2337-38 , 96 L.Ed.2d 185 (1987); Mago v. Shearson Lehman Hutton, Inc., 956 F.2d 932, 934-35 (9th Cir.1992);…

43 F.3d 1244 GRAHAM OIL CO., an Oregon corporation, Plaintiff-Appellant, v. ARCO PRODUCTS CO., A DIVISION OF ATLANTIC RICHFIELD CO., a Delaware corporation, Defendant-Appellee. Nos. 92-35007, 92-35380. United States Court of Appeals, Ninth Circuit. Argued and Submitted Nov. 2, 1993. Decided Dec. 16, 1994. As Amended March 13, 1995. Mildred J. Carmack, Schwabe, Williamson & Wyatt, Portland, OR, for plaintiff-appellant. Charles F. Adams, Stoel, Rives, Boley, Jones & Grey, Portland, OR, for defendant-appellee. Appeals from the United States District Court for the District of Oregon. Before: REINHARDT, BRUNETTI, and FERNANDEZ, Circuit Judges. Opinion by Judge REINHARDT; Dissent by Judge FERNANDEZ. REINHARDT, Circuit Judge: I. INTRODUCTION 1 Graham Oil Co. ("Graham Oil") appeals the judgment of the district court, which dismissed, with prejudice, all of its claims against ARCO Products Co. ("ARCO"). The claims were dismissed because Graham Oil refused to submit to arbitration as required by an arbitration clause in its distributorship agreement with ARCO. 2 Graham Oil contends that the arbitration clause is invalid because it requires the surrender of certain rights provided…