Opinion
CIVIL ACTION NO. 01-11300-RWZ
October 7, 2002
MEMORANDUM OF DECISION
On June 30, 2000, lessee-dealers of Shell brand automobile gasoline, acting through the Shell Dealers Defense Group ("Group"), and other individual franchisees, filed an action against Shell Oil Products Company and Motiva Enterprises ("defendants") for numerous causes of action centered on the defendants' termination of its Variable Rent Program ("VRP"). See Demetrios Tsaniklides, Jr., et al v. Shell Oil Products Co., Inc. and Motiva Enterprises, LLC, Civil Action No. 00-11295. After the Court determined that the Group did not have standing, the lessee-dealers sought to amend the complaint to add themselves in their individual capacities. On June 12, 2001, the Court denied the motion, but stated that plaintiffs "may file a new case which may be deemed to be related." On the same day, the Court ordered that the cases involving the Rhode Island plaintiffs and New Hampshire plaintiffs be transferred to their respective states. The remaining parties subsequently stipulated to a dismissal of the action without prejudice. The present action seeking the same relief was then filed on July 27, 2001. Defendants have filed a Motion to Dismiss and a Motion for Judgment on the Pleadings.
Defendants contend that Counts One and Two of plaintiffs' Amended Complaint concerning constructive termination are barred by the one-year statute of limitations under the Petroleum Marketing Practices Act, 15 U.S.C. § 2805 ("PMPA"). Defendants assert that the statute of limitations began to run when Shell terminated the VRP on August 1, 1998, while plaintiffs allege that it began on January 1, 2000, when the VRP substitute was eliminated. Count One of the Amended Complaint states that plaintiffs seek injunctive relief on the grounds that "the dealers' franchises have been constructively terminated by Shell's termination of the Variable Rent Program or a similar alternative. . . ." (Paragraph 49, Subparagraph 1.) Count Two incorporates the same statement by reference. Paragraph 42 of the Amended Complaint states that Shell/Motiva abandoned the last substitution of the VRP on January 1, 2000 and began to charge "Contract Rent" or the new "Program Rent."
Viewing the facts as stated in the Amended Complaint in a light most favorable to the plaintiffs, the statute of limitations for the PMPA claims began to run on January 1, 2000. Plaintiffs then filed suit on June 30, 2000, well within the one-year statute of limitations. Since the present suit is deemed to relate back to the date of the original complaint in accordance with the Court's order dated June 12, 2001, plaintiffs' PMPA claims are not time barred. In fact, none of plaintiffs' claims, including the state law claims, is barred by the PMPA's statute of limitations. Similarly, plaintiffs' claims under M.G.L. ch. 93E are timely.
Defendants also contend that the Rhode Island plaintiffs (except for Paul Sroczynski and his corporation, J. Enterprises) and the New Hampshire plaintiffs (except for Charles Lagasse, Kach Corporation and Ali Jaber), who did not file suit individually in the first action, are time barred. However, both sets of plaintiffs were parties to the first action as members of the Group. The Court ordered that the cases involving those out-of-state plaintiffs be transferred to their respective states pursuant to 28 U.S.C. § 1406(a). Because those actions relate back to the date of the first action, they, too, are timely.
Defendants' motion to dismiss plaintiffs' claim for fraud and misrepresentation is allowed. "In the First Circuit, Rule 9(b) requires a party pleading fraud to specify the time, place, and content of the alleged false representation." Mead Corp. v. Stevens Cabinets, Inc., 938 F. Supp. 87, 90 (D.Mass. 1996). Paragraph 31 of the plaintiffs' amended complaint states that "[f]or over 18 years, the dealers received assurances from the highest levels of the marketing department on down to the field sales representatives, that the VRP would always be there for them. . . ." Plaintiffs have not specified either the time or place of defendants' misrepresentations regarding the VRP as required.
Finally, defendants' assertion that allegations of constructive termination of the franchise are not covered by the PMPA is simply wrong. See Riverdale Enterprises Inc. v. Shell Oil Co., 41 F. Supp.2d 56, 62 (D.Mass. 1999) (stating that "[a]bsent a claim of per se unlawful termination, a PMPA franchisee must show that a constructive termination has occurred.").
Accordingly, the defendants' Motion to Dismiss and Motion for Judgment on the Pleadings as to the plaintiffs' fraud and misrepresentation claim is allowed. As to all other claims, the motions are denied.