15 U.S.C. § 2805 — Enforcement provisions

Page 1951 TITLE 15—COMMERCE AND TRADE § 2805 franchisor shall furnish notification of such ter- mination or such nonrenewal to the franchisee who is a party to such franchise or such fran- chise relationship— (1) in the manner described in subsection (c); and (2) except as provided in subsection (b), not less than 90 days prior to the date on which such termination or nonrenewal takes effect. (b) Additional requirements applicable to franchisor (1) In circumstances in which it would not be reasonable for the franchisor to furnish notifica- tion, not less than 90 days prior to the date on which termination or nonrenewal takes effect, as required by subsection (a)(2)— (A) such franchisor shall furnish notification to the franchisee affected thereby on the ear- liest date on which furnishing of such notifica- tion is reasonably practicable; and (B) in the case of leased marketing premises, such franchisor— (i) may not establish a new franchise rela- tionship with respect to such premises be- fore the expiration of the 30-day period which begins— (I) on the date notification was posted or personally delivered, or (II) if later, on the date on which such termination or nonrenewal takes effect; and (ii) may, if permitted to do so by the fran- chise agreement, repossess such premises and, in circumstances under which it would be reasonable to do so, operate such prem- ises through employees or agents. (2) In the case of any termination of any fran- chise or any nonrenewal of any franchise rela- tionship pursuant to the provisions of section 2802(b)(2)(E) of this title or section 2803(c)(2) of this title, the franchisor shall— (A) furnish notification to the franchisee not less than 180 days prior to the date on which such termination or nonrenewal takes effect; and (B) promptly provide a copy of such notifica- tion, together with a plan describing the schedule and conditions under which the franchisor will withdraw from the marketing of motor fuel through retail outlets in the rel- evant geographic area, to the Governor of each State which contains a portion of such area. (c) Manner and form of notification Notification under this section— (1) shall be in writing; (2) shall be posted by certified mail or per- sonally delivered to the franchisee; and (3) shall contain— (A) a statement of intention to terminate the franchise or not to renew the franchise relationship, together with the reasons therefor; (B) the date on which such termination or nonrenewal takes effect; and (C) the summary statement prepared under subsection (d). (d) Preparation, publication, etc., of statutory summaries (1) Not later than 30 days after June 19, 1978, the Secretary of Energy shall prepare and pub- lish in the Federal Register a simple and concise summary of the provisions of this subchapter, including a statement of the respective respon- sibilities of, and the remedies and relief avail- able to, any franchisor and franchisee under this subchapter. (2) In the case of summaries required to be fur- nished under the provisions of section 2802(b)(2)(D) of this title or subsection (c)(3)(C) of this section before the date of publication of such summary in the Federal Register, such summary may be furnished not later than 5 days after it is so published rather than at the time required under such provisions. (Pub. L. 95–297, title I, § 104, June 19, 1978, 92 Stat. 329.) § 2805. Enforcement provisions (a) Maintenance of civil action by franchisee against franchisor; jurisdiction and venue; time for commencement of action If a franchisor fails to comply with the re- quirements of section 2802, 2803, or 2807 of this title, the franchisee may maintain a civil action against such franchisor. Such action may be brought, without regard to the amount in con- troversy, in the district court of the United States in any judicial district in which the prin- cipal place of business of such franchisor is lo- cated or in which such franchisee is doing busi- ness, except that no such action may be main- tained unless commenced within 1 year after the later of— (1) the date of termination of the franchise or nonrenewal of the franchise relationship; or (2) the date the franchisor fails to comply with the requirements of section 2802, 2803, or 2807 of this title. (b) Equitable relief by court; bond requirements; grounds for nonexercise of court’s equitable powers (1) In any action under subsection (a), the court shall grant such equitable relief as the court determines is necessary to remedy the ef- fects of any failure to comply with the require- ments of section 2802, 2803, or 2807 of this title, including declaratory judgment, mandatory or prohibitive injunctive relief, and interim equi- table relief. (2) Except as provided in paragraph (3), in any action under subsection (a), the court shall grant a preliminary injunction if— (A) the franchisee shows— (i) the franchise of which he is a party has been terminated or the franchise relation- ship of which he is a party has not been re- newed, and (ii) there exist sufficiently serious ques- tions going to the merits to make such ques- tions a fair ground for litigation; and (B) the court determines that, on balance, the hardships imposed upon the franchisor by the issuance of such preliminary injunctive re- lief will be less than the hardship which would be imposed upon such franchisee if such pre- liminary injunctive relief were not granted. (3) Nothing in this subsection prevents any court from requiring the franchisee in any ac- Page 1952 TITLE 15—COMMERCE AND TRADE § 2805 tion under subsection (a) to post a bond, in an amount established by the court, prior to the issuance or continuation of any equitable relief. (4) In any action under subsection (a), the court need not exercise its equity powers to compel continuation or renewal of the franchise relationship if such action was commenced— (A) more than 90 days after the date on which notification pursuant to section 2804(a) of this title was posted or personally delivered to the franchisee; (B) more than 180 days after the date on which notification pursuant to section 2804(b)(2) of this title was posted or personally delivered to the franchisee; or (C) more than 30 days after the date on which the termination of such franchise or the nonrenewal of such franchise relationship takes effect if less than 90 days notification was provided pursuant to section 2804(b)(1) of this title. (c) Burden of proof; burden of going forward with evidence In any action under subsection (a), the franchisee shall have the burden of proving the termination of the franchise or the nonrenewal of the franchise relationship. The franchisor shall bear the burden of going forward with evi- dence to establish as an affirmative defense that such termination or nonrenewal was permitted under section 2802(b) or 2803 of this title, and, if applicable, that such franchisor complied with the requirements of section 2802(d) of this title. (d) Actual and exemplary damages and attorney and expert witness fees to franchisee; deter- mination by court of right to exemplary dam- ages and amount; attorney and expert wit- ness fees to franchisor for frivolous actions (1) If the franchisee prevails in any action under subsection (a), such franchisee shall be en- titled— (A) consistent with the Federal Rules of Civil Procedure, to actual damages; (B) in the case of any such action which is based upon conduct of the franchisor which was in willful disregard of the requirements of section 2802, 2803, or 2807 of this title, or the rights of the franchisee thereunder, to exem- plary damages, where appropriate; and (C) to reasonable attorney and expert wit- ness fees to be paid by the franchisor, unless the court determines that only nominal dam- ages are to be awarded to such franchisee, in which case the court, in its discretion, need not direct that such fees be paid by the franchisor. (2) The question of whether to award exem- plary damages and the amount of any such award shall be determined by the court and not by a jury. (3) In any action under subsection (a), the court may, in its discretion, direct that reason- able attorney and expert witness fees be paid by the franchisee if the court finds that such action is frivolous. (e) Discretionary power of court to compel con- tinuation or renewal of franchise relation- ship; grounds for noncompulsion; right of franchisee to actual damages and attorney and expert witness fees unaffected (1) In any action under subsection (a) with re- spect to a failure of a franchisor to renew a fran- chise relationship in compliance with the re- quirements of section 2802 of this title, the court may not compel a continuation or renewal of the franchise relationship if the franchisor dem- onstrates to the satisfaction of the court that— (A) the basis for such nonrenewal is a deter- mination made by the franchisor in good faith and in the normal course of business— (i) to convert the leased marketing prem- ises to a use other than the sale or distribu- tion of motor fuel, (ii) to materially alter, add to, or replace such premises, (iii) to sell such premises, (iv) to withdraw from the marketing of motor fuel through retail outlets in the rel- evant geographic market area in which the marketing premises are located, or (v) that renewal of the franchise relation- ship is likely to be uneconomical to the franchisor despite any reasonable changes or reasonable additions to the provisions of the franchise which may be acceptable to the franchisee; and (B) the requirements of section 2804 of this title have been complied with. (2) The provisions of paragraph (1) shall not af- fect any right of any franchisee to recover ac- tual damages and reasonable attorney and ex- pert witness fees under subsection (d) if such nonrenewal is prohibited by section 2802 of this title. (f) Release or waiver of rights (1) No franchisor shall require, as a condition of entering into or renewing the franchise rela- tionship, a franchisee to release or waive— (A) any right that the franchisee has under this subchapter or other Federal law; or (B) any right that the franchisee may have under any valid and applicable State law. (2) No provision of any franchise shall be valid or enforceable if the provision specifies that the interpretation or enforcement of the franchise shall be governed by the law of any State other than the State in which the franchisee has the principal place of business of the franchisee. (Pub. L. 95–297, title I, § 105, June 19, 1978, 92 Stat. 331; Pub. L. 103–371, § 4, Oct. 19, 1994, 108 Stat. 3485; Pub. L. 110–140, title II, § 241(b), Dec. 19, 2007, 121 Stat. 1540.) Editorial Notes REFERENCES IN TEXT The Federal Rules of Civil Procedure, referred to in subsec. (d)(1), are set out in the Appendix to Title 28, Judiciary and Judicial Procedure. AMENDMENTS 2007—Subsecs. (a), (b)(1), (d)(1)(B). Pub. L. 110–140 sub- stituted ‘‘2802, 2803, or 2807’’ for ‘‘2802 or 2803’’ wherever appearing. Page 1953 TITLE 15—COMMERCE AND TRADE § 2807 1994—Subsec. (f). Pub. L. 103–371 added subsec. (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2007 AMENDMENT Amendment by Pub. L. 110–140 effective on the date that is 1 day after Dec. 19, 2007, see section 1601 of Pub. L. 110–140, set out as an Effective Date note under sec- tion 1824 of Title 2, The Congress. § 2806. Relationship of statutory provisions to State and local laws (a) Termination or nonrenewal of franchise (1) To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, or to the nonrenewal (or the furnishing of notification with respect thereto) of any franchise relationship, no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation (including any remedy or penalty ap- plicable to any violation thereof) with respect to termination (or the furnishing of notification with respect thereto) of any such franchise or to the nonrenewal (or the furnishing of notification with respect thereto) of any such franchise rela- tionship unless such provision of such law or regulation is the same as the applicable provi- sion of this subchapter. (2) No State or political subdivision of a State may adopt, enforce, or continue in effect any provision of law (including a regulation) that re- quires a payment for the goodwill of a franchisee on the termination of a franchise or nonrenewal of a franchise relationship author- ized by this subchapter. (b) Transfer or assignment of franchise (1) Nothing in this subchapter authorizes any transfer or assignment of any franchise or pro- hibits any transfer or assignment of any fran- chise as authorized by the provisions of such franchise or by any applicable provision of State law which permits such transfer or assignment without regard to any provision of the franchise. (2) Nothing in this subchapter shall prohibit any State from specifying the terms and condi- tions under which any franchise or franchise re- lationship may be transferred to the designated successor of a franchisee upon the death of the franchisee. (Pub. L. 95–297, title I, § 106, June 19, 1978, 92 Stat. 332; Pub. L. 103–371, § 5, Oct. 19, 1994, 108 Stat. 3485.) Editorial Notes AMENDMENTS 1994—Subsec. (a). Pub. L. 103–371, § 5(1), redesignated existing provisions as par. (1) and added par. (2). Subsec. (b). Pub. L. 103–371, § 5(2), redesignated exist- ing provisions as par. (1) and added par. (2). § 2807. Prohibition on restriction of installation of renewable fuel pumps (a) Definition In this section: (1) Renewable fuel The term ‘‘renewable fuel’’ means any fuel— (A) at least 85 percent of the volume of which consists of ethanol; or (B) any mixture of biodiesel and diesel or renewable diesel (as defined in regulations adopted pursuant to section 7545(o) of title 42 (40 CFR, part 80)), determined without re- gard to any use of kerosene and containing at least 20 percent biodiesel or renewable diesel. (2) Franchise-related document The term ‘‘franchise-related document’’ means— (A) a franchise under this chapter; and (B) any other contract or directive of a franchisor relating to terms or conditions of the sale of fuel by a franchisee. (b) Prohibitions (1) In general No franchise-related document entered into or renewed on or after December 19, 2007, shall contain any provision allowing a franchisor to restrict the franchisee or any affiliate of the franchisee from— (A) installing on the marketing premises of the franchisee a renewable fuel pump or tank, except that the franchisee’s franchisor may restrict the installation of a tank on leased marketing premises of such franchisor; (B) converting an existing tank or pump on the marketing premises of the franchisee for renewable fuel use, so long as such tank or pump and the piping connecting them are either warranted by the manufacturer or certified by a recognized standards setting organization to be suitable for use with such renewable fuel; (C) advertising (including through the use of signage) the sale of any renewable fuel; (D) selling renewable fuel in any specified area on the marketing premises of the franchisee (including any area in which a name or logo of a franchisor or any other en- tity appears); (E) purchasing renewable fuel from sources other than the franchisor if the franchisor does not offer its own renewable fuel for sale by the franchisee; (F) listing renewable fuel availability or prices, including on service station signs, fuel dispensers, or light poles; or (G) allowing for payment of renewable fuel with a credit card, so long as such activities described in subpara- graphs (A) through (G) do not constitute mislabeling, misbranding, willful adultera- tion, or other trademark violations by the franchisee. (2) Effect of provision Nothing in this section shall be construed to preclude a franchisor from requiring the franchisee to obtain reasonable indemnifica- tion and insurance policies. (c) Exception to 3-grade requirement No franchise-related document that requires that 3 grades of gasoline be sold by the applica- ble franchisee shall prevent the franchisee from selling a renewable fuel in lieu of 1, and only 1, grade of gasoline.