Marcoux v. Shell Oil Products Co. LLC

United States Court of Appeals
For the First Circuit

No. 05-2771

FRANCIS MARCOUX, ET AL.,

Plaintiffs,

MAC'S SHELL SERVICE, INC.; CYNTHIA KAROL; JOHN A. SULLIVAN;
AKMAL, INC.; SID PRASHAD; RAM CORPORATION, INC.;
J&M AVRAMIDIS, INC.; THREE K'S, INC.; STEPHEN PISARCZYK,

Plaintiffs-Appellees,

v.

SHELL OIL PRODUCTS COMPANY LLC; MOTIVA ENTERPRISES LLC;
SHELL OIL COMPANY, INC.

Defendants-Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Rya W. Zobel, U.S. District Judge]

Before

Torruella, Howard, Circuit Judges,
and Delgado-Colón,* District Judge.

Paul D. Sanson, with whom Vaughan Finn, Karen T. Staib, and
Shipman & Goodwin LLP were on brief, for appellants.
John F. Farraher, Jr., with whom Gary R. Greenberg, Louis J.
Scerra, Jr., and Greenberg Traurig, LLP were on brief, for
appellees.

*
Of the District of Puerto Rico, sitting by designation.
 Richard C. Godfrey, P.C., with whom Andrew A. Kassof, Benjamin
W. Hulse, and Kirkland & Ellis LLP were on brief, for BP Products
North America Inc., amicus curiae.

April 18, 2008

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 HOWARD, Circuit Judge. Defendants-appellants Shell Oil

Company, Shell Oil Products Company (collectively, "Shell"), and

Motiva Enterprises appeal jury verdicts against them on several

claims relating to their treatment of plaintiffs-appellees (the

"Dealers"), franchisees and operators of Shell-branded service

stations. Shell and Motiva (together, "the defendants") challenge

the legal basis for verdicts against them under a federal statute

designed to protect franchisees, as well as the verdicts under

Massachusetts state law. Additionally, they appeal the jury's

damages determinations as without sufficient basis in the evidence.

We affirm in part and reverse in part.

Facts

We recite the facts in the light most favorable to the

jury's verdict. See Rodriguez-Torres v. Caribbean Forms Mfr.,

Inc., 399 F.3d 52, 56 (1st Cir. 2005).

Shell maintained a network of franchisees in

Massachusetts. Plaintiffs were eight of these franchisees. In

1998, Shell, Texaco, and Star Enterprises formed defendant Motiva,

and Shell transferred the franchise relationships to that entity,

assigning its rights and duties under the relevant contracts to

Motiva.1 Shortly thereafter, Motiva replaced the Variable Rent

1
The Petroleum Marketing Practices Act, 15 U.S.C. §§ 2801-2806
(the "PMPA"), defines "franchise" as the collection of agreements
relating to three elements: the lease of the premises, the license
to use the franchisor's trademark, and the agreement governing the
supply of branded motor fuel. Id. § 2801(1). These three elements

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Program ("VRP") with the Special Temporary Incentive Program

("STIP"). Each of these programs (collectively, the "Subsidy")

provided for reduction of the contract rent through sales of

gasoline; once the specified threshold gallonage was sold in a

given month, the contract rent for the next month would be

discounted by a certain amount for every gallon sold in excess of

that threshold. The threshold amount and the discount amount

changed from time to time. The Subsidy had been in effect since

1982; it was renewed in an annual notice to franchisees, although

its terms explicitly provided for cancellation with thirty days'

notice. Various representations were made to the Dealers to the

effect that the Subsidy or something like it would always exist,

the contract rent was to be disregarded, and the cancellation

provision was only intended to be invoked in a situation like a war

or an oil embargo. Nevertheless, having given the required notice,

Motiva ended the STIP on January 1, 2000, terminating the Subsidy.

Without the Subsidy, the Dealers paid much more rent.

Motiva also offered new leases as the old leases expired.

The new leases calculated rent differently than the old leases,

resulting in a further increase in rent.

In accordance with their fuel supply contracts, the

Dealers were charged a wholesale price for gasoline known as the

are sometimes referred to as the "statutory elements of the
franchise."

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Dealer Tank Wagon price (the "DTW price"). The fuel supply

contracts were open price term contracts: the contracts were

silent as to price, and one party set the price unilaterally. This

price was set by the defendants, who calculated it by assessing the

street prices of other competing gasoline stations in the area, and

reducing those prices by the taxes levied on gasoline and an

Estimated Industry Margin to approximate the wholesale price of the

defendants' competitors.

Proceedings Below

Several franchisees, along with an unincorporated

association called the Shell Dealers Defense Group (the "Defense

Group"), filed for injunctive and declaratory relief as well as

damages on June 6, 2000. Compl., Tsaniklides v. Shell Oil Products

Co., 00-CV-11295. When the Defense Group was found to lack

standing, a motion was made to add its members as individual

plaintiffs. In denying that motion the district court indicated in

a margin order, "[Plaintiffs may file a new case which may be

deemed to be related." The individual franchisees filed a new suit

on July 27, 2001, and the original suit was voluntarily dismissed

on August 10. The new suit was assigned to the same district

judge. The cases of New Hampshire and Rhode Island plaintiffs in

the new action were transferred to those districts. From the

sixty-four Massachusetts plaintiffs in the new suit, ten plaintiffs

were chosen to go forward. One of those settled on the eve of

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trial and another lost at summary judgment. One plaintiff of the

remaining eight, Mac's Shell Service, Inc., operated two stations

that were sometimes treated as separate plaintiffs. Therefore,

eight plaintiffs representing nine stations proceeded to trial.

The Dealers sued under a variety of theories. First,

they contended that the Subsidy had been incorporated into the

property leases, although the written leases purported to be

integrated contracts under Massachusetts law. They claimed the

amended contracts were then breached when Motiva eliminated the

Subsidy. Under the Dealers' theory, this breach gave rise to two

distinct claims: a state cause of action for breach of contract

and a claim under the PMPA that Shell had improperly terminated the

franchises when Shell assigned the franchise agreements to Motiva

and Motiva terminated the Subsidy. Because no actual termination

occurred, the Dealers proceeded under a theory of "constructive

termination." Similarly, they claimed Motiva had "constructively

nonrenewed" the franchise relationships in violation of the PMPA

(even though the franchises were in fact renewed) because the new

contracts changed the rent-calculation method and increased the

rent, along with other objectionable changes. Finally, the Dealers

argued that Motiva failed to set prices for gasoline in good faith,

as required for open price term contracts under Massachusetts law.

The defendants unsuccessfully moved for dismissal on all

constructive termination claims and the constructive nonrenewal

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claims of two plaintiffs on the ground that they were time-barred.

They also moved for a judgment as a matter of law on all claims.

Following a jury verdict against them on all claims, they properly

renewed this motion. They moved as well for a new trial and to set

aside the jury's damages awards. The defendants now appeal the

denial of all of these motions.

The PMPA

Congress enacted Title I of the PMPA to "remedy the

disparity in bargaining power between franchisors and franchisees."

S. Rep. No. 95-731, 95th Cong., 2d Sess. 18; see also Four Corners

Serv. Station v. Mobil Oil Corp., 51 F.3d 306, 310 (1st Cir. 1995).

Because franchisees claimed that this unequal power was often

wielded through arbitrary or discriminatory termination or

nonrenewal, or threats of termination or nonrenewal, the PMPA aimed

to remove this potent weapon from the franchisors' arsenal. S.

Rep. No. 95-731, at 17 ("Numerous allegations have been made before

Congressional committees investigating petroleum marketing problems

that terminations and non-renewals, or threats of termination or

non-renewal, have been used by franchisors to compel franchisees to

comply with marketing policies of the franchisor."); id. at 18

("[T]ermination of franchise agreements during the term as a remedy

for contract violations has been repeatedly utilized."). The "PMPA

attempts to level the playing field by restricting the grounds upon

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which a franchisor can assert a unilateral termination or

nonrenewal of a franchise." Id.2

The PMPA makes a distinction between a "franchise" and

the "franchise relationship." The franchise is a set of definite

agreements for 1) lease of the premises, 2) the right to purchase

gasoline for resale, and 3) the right to use the franchisor's

trademark. 15 U.S.C. § 2801(1). "Franchise relationship" refers

to the respective obligations of the franchisor and franchisee

created by a franchise. Id. § 2801(2). The legislative history of

the PMPA makes clear that "franchise" and "franchise relationship"

were distinguished to drive home the fact that the franchise

relationship survives the expiration of the agreements underlying

the franchise. See S. Rep. No. 95-731, 95th Cong., 2d Sess. 30

("The term 'franchise relationship' is utilized to avoid any

contention that because the 'franchise' does not exist there is

nothing to renew."). The structure and history of the PMPA

emphasize Congress's view that the franchisees have a reasonable

2
The PMPA is concerned not only with termination of a franchise
agreement, but also with a franchisor's failure to renew such an
agreement when it expires. Although the constellation of
agreements (real property leases, fuel supply agreements, licenses
to use franchisor's trademark) that make up the franchise are
definite in term, the "[reasonable expectations of the parties to
a motor fuel franchise are that the relationship will be a
continuing one." Id. This, of course, encourages franchisees to
invest in their franchises and to build up goodwill that benefits
both parties.

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expectation that the franchises would be renewed and that the

relationships would continue.

Accordingly, the PMPA forbids termination of a franchise

or nonrenewal of a franchise relationship except under enumerated

circumstances and with proper notice. See 15 U.S.C § 2802(a)

(nonrenewals and terminations generally prohibited); id. §§

2802(b)(2) - (3) (grounds for termination and non-renewal); id. §

2804 (notice requirements). The PMPA provides a cause of action to

franchisees who suffer termination or nonrenewal in violation of

the relevant sections. Id. § 2805(a). As long as the action is

brought within one year of the termination or nonrenewal complained

of, id. § 2805(a)(1), the franchisee may seek preliminary

injunctive relief, id. § 2805(b)(2), damages, id. § 2805(d), and

"such equitable relief as the court determines is necessary," id.

§ 2805(b)(1). The PMPA mandates that preliminary relief "shall" be

granted if the plaintiff shows 1) termination or nonrenewal and 2)

"sufficiently serious questions going to the merits" that are "a

fair ground for litigation," and the court determines 3) that the

balance of hardships tips in favor of granting the injunction. Id.

§ 2805(b)(2). In all private civil actions for termination or

nonrenewal, it is the franchisee's burden to show termination or

lack of renewal. Id. § 2805(c).

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 Standard of Review

We review the denial of judgment as a matter of law de

novo as to issues of law. See Rodriguez-Torres, 399 F.3d at 57.

As to matters of fact, we view the evidence in the light most

favorable to the verdict, asking only whether a rational jury could

on the basis of that evidence find as the jury has. See id. We

review a denial of a motion for a new trial for "a manifest abuse

of discretion." United States v. George, 448 F.3d 96, 101 (1st

Cir. 2006). We "will order a new trial only if the verdict is

against the demonstrable weight of the credible evidence or results

in a blatant miscarriage of justice." Whitfield v. Meléndez-

Rivera, 431 F.3d 1, 9 (1st Cir. 2005) (internal quotation omitted).

We will uphold a jury award if it is a result of "any rational

appraisal or estimate of the damages that could be based on the

evidence before the jury." Data Gen. Corp. v. Grunman Sys. Support

Corp., 36 F.3d 1147, 1172 (1st Cir. 1994) (quoting Anthony v.

G.M.D. Airline Servs., 17 F.3d 490, 493 (1st Cir. 1994)). Because

it is complex and requires some procedural background, we discuss

the applicable standard of review for the statute of limitations

claim within the discussion of that issue.

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 Statute of Limitations

The PMPA contains a one-year statute of limitations.3

The district court found, and the defendants here do not contest,

that the cause of action for constructive termination arose on

January 1, 2000, when Motiva terminated the Subsidy. The

defendants claim that all of the constructive termination claims

are time-barred because this action was not filed until almost

nineteen months later, on July 27, 2001.4 The Dealers point out

that in dismissing their motion to be added as plaintiffs to the

old action, the district court gave them leave to file a new action

"which may be deemed to be related" to the original complaint, and

that the first action was not dismissed until after the second was

filed.

The defendants filed a motion to dismiss for failure to

state a claim on which relief might be granted, citing the lapse of

time and the PMPA's statute of limitations. This motion was

denied.5

3
"[N]o such action shall be maintained 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 102 or 103." 15 U.S.C. § 2805(a).
4
In the light of our disposition of the constructive nonrenewal
claims as a whole, it is unnecessary to complicate this analysis
with the defendants' further claim that two of the lease renewals
are also time-barred on the same theory.
5
The Dealers assert, as they have since their opposition to the
motion to dismiss, that this resolution of the motion to amend was

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 Our review of the record indicates that the district

court denied the motion to add the individual plaintiffs only

because it granted the plaintiffs a right to file a new action that

related back. We further conclude that had the district court

allowed the motion to amend, the amended pleading would have

related back under Federal Rule of Civil Procedure 15. In the

light of this, two powerful reasons lead us to uphold the district

court's resolution of this issue: first, all the purposes of Rule

15(c) are satisfied, if not its letter; and second, the district

court was in a better position when it placed the case in this

posture than we are now to assess whether the interests of justice

are served by permitting this relation back.6

the result of a compromise regarding discovery vis-à-vis the new
parties. At oral argument, the defendants denied ever agreeing to
such a solution.
6
We note that this issue was disposed of below in the district
court's denial of a motion to dismiss. The parties skirmish about
whether such a denial may even be appealed after a jury trial.
Where a denial of a motion for summary judgment is predicated on a
genuine dispute over issues of material fact, such a denial is not
normally reviewable in this circuit after a "full-dress trial."
Lama v. Borras, 16 F.3d 473, 476 n.5 (1st Cir. 1994). The Dealers
argue, with reason, that this would apply a fortiori to a denial of
a 12(b)(6) motion. See Bennett v. Pippin, 74 F.3d 578, 585 (5th
Cir. 1996) ("When the plaintiff has prevailed after a full trial on
the merits, a district court's denial of a Rule 12(b)(6) motion
becomes moot."). But here the question is one of law -- whether
relation back can be applied outside of the strict confines of Rule
15(c). We think it likely that this changes the analysis, but
because we ultimately hold that relation back was appropriate, it
makes no difference: even assuming that the issue was properly
preserved, the statute of limitations argument fails. We express
no view as to whether in the general case a denial of a 12(b)(6)
motion may be appealed after a jury trial; we move on to discuss

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 Federal Rule of Civil Procedure 15(c) provides that an

amended pleading may be deemed to "relate back" for statute of

limitations purposes to the date of the pleading if certain

conditions are met. The defendants rightly point out that Rule 15

concerns amended pleadings, not new pleadings in separate actions.

"Rule 15(c) simply does not apply where, as here, the party

bringing suit did not seek to 'amend' or 'supplement' his original

pleading, but, rather, opted to file an entirely new [action] at a

subsequent date." Neverson v. Bissonnette, 261 F.3d 120, 126 (1st

Cir. 2001) (noting that a dismissal without prejudice leaves the

plaintiff "in the same situation as if [the] first suit had never

been filed" for purposes of Rule 15(c)). We note that this case

differs from Neverson in that here the dismissal of the previous

action did not occur until after the new pleading was filed, and we

note further that the district court expressly suggested a new

action be filed at the very moment it denied leave to amend the

complaint in the first action.

Acknowledging that the letter of Rule 15 is not met here,

we conclude that the rule nonetheless does provide some guidance.

the relation-back issue only because we think it important to
consider whether the district court acted properly in acting
outside the letter of the Federal Rules of Civil Procedure. In
conducting this analysis, we apply de novo review to the pure legal
question. Finding, as we do, that as a matter of law such relation
back is within the power of the district court, we then review the
decision to grant relation back for abuse of discretion. The
finding of facts necessary to that conclusion we review for clear
error.

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Rule 15(c) is "intimately connected with the policy of the statute

of limitations." Fed. R. Civ. P. 15(c), advisory committee note.

The purpose of statutes of limitations is to avoid the difficulties

inherent in litigating matters long past, and to provide repose to

potential defendants regarding such matters. See Nelson v. County

of Allegheny, 60 F.3d 1010, 1014 (3d Cir. 1995) ("Statutes of

limitations ensure that defendants are protected against the

prejudice of having to defend against stale claims, as well as the

notion that, at some point, claims should be laid to rest so that

security and stability can be restored to human affairs.")

(internal quotation omitted). The defendants at no time could

have expected or enjoyed repose regarding these matters. The

denial of the motion to add the specific Dealers to the original

litigation was accompanied in the same breath by notice that a new

complaint might be filed under the same facts. This occurred in a

timely fashion. And the first litigation was not dismissed until

after the second one was filed. No evidence of sandbagging was

brought forward, nor do we infer any prejudice to the defendants on

this record.7

Here, the Dealers had sought to vindicate their rights as

the Defense Group, but lacked standing in that guise. In denying

a motion to add the plaintiffs to the original litigation, the

7
We note also that the record is replete with delays by the
defendants, and to that extent their equitable claim to the
benefits of a speedy process is attenuated.

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district court indicated it would allow a new filing to relate back

to the date of the old one. It seems clear that the district court

could instead have allowed the pleadings to be amended to name the

plaintiffs individually. While we cannot say with certainty why

one course of action was to be preferred over another, we are

confident that the district court did not abuse its discretion.

Rule 15(c) does not specifically contemplate the

substitution of plaintiffs. See Fed. R. Civ. P. 15(c), advisory

committee note ("The relation back of amendments changing

plaintiffs is not expressly treated in revised Rule 15(c), since

the problem is generally easier."). But this is not a bar to

relation back here either; assuming that the general principles of

Rule 15 are to govern this admittedly unusual situation, we find

that substituting plaintiffs here wreaks no injustice.

[W]e have laid down three separate requirements applicable to
plaintiffs who seek succor under Rule 15(c)(3): The amended
complaint must arise out of the conduct, transaction, or
occurrence set forth or attempted to be set forth in the
original pleading; there must be a sufficient identity of
interest between the new plaintiff, the old plaintiff, and
their respective claims so that the defendants can be said to
have been given fair notice of the latecomer's claim against
them; and undue prejudice must be absent.

Young v. Lepone, 305 F.3d 1, 14 (1st Cir. 2002) (quoting Allied

Int'l v. Intel Longshoremen's Ass'n, 814 F.2d 32, 35-36 (1st Cir.

1987)). Accepting, as the district court did, that the Dealers

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were members of the Defense Group,8 these factors are met here.

The district court's factual conclusion does not represent an abuse

of discretion, and so we adopt it.

The original complaint states the same causes of action,

arising from the same events, as the new complaint. The Dealers

have always claimed that they were all members of the Defense

Group. That organization was established only to assert its

members' rights and protect their interests, and so we find

sufficient identity of interest to put the defendants on notice of

the claims against them. And there is no undue prejudice where the

Dealers are simply asserting themselves a claim they had made

through a proxy well within the statute of limitations. Had the

motion to amend been granted, and the individual plaintiffs named,

relation back would have been within the district court's

discretion. The district court, then, properly allowed the

relation back of the new case to the previous one, and therefore

did not err when it denied the motion to dismiss.9

8
The Dealers presented testimony on this issue at trial. While
that testimony was of course not available to the district court
when it decided the motion to amend in Tsaniklides and the motion
to dismiss in this case, it does help to corroborate the district
court's determination.
9
The Dealers provide two alternate theories on which to uphold
the denial of the motion to dismiss: equitable estoppel and
equitable tolling of the statute of limitations. Because the
district court denied the motion to dismiss on the basis of
relation back, we have found it most convenient to follow that
analysis here. We note only that all of these approaches address
the fundamental issue of whether defendants suffer undue prejudice

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 State Contract Claim

The defendants appeal the jury's determination that the

leases were orally amended to include the Subsidy, and therefore

when the Subsidy was ended, the leases were breached. First, the

defendants contend that the leases were completely integrated,

meaning oral representations before or during the execution of the

contract must be excluded by the parol evidence rule. Second, they

claim that even if the leases were not integrated, the jury had

insufficient evidence to conclude that the leases were amended to

include a promise to continue the Subsidy.

The defendants argue as an initial matter that the leases

were completely integrated agreements. The leases indisputably

represented that they were integrated agreements and that any

subsequent modification had to be in writing. The defendants claim

the integration clause operated to insulate the leases from oral

representations made prior to or contemporaneous with execution.

But a document is not integrated merely because it says so. See

Restatement (Second) of Contracts § 209 cmt. b (1981) ("Written

contracts, signed by both parties, may include an explicit

declaration that there are no other agreements between the parties,

but such a declaration may not be conclusive.").

In Massachusetts, "the question of integration is one of

fact reserved for the trial judge, whose resolution of that issue

as a result of delay or lack of notice.

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will not be reversed unless clearly erroneous." Cambridgeport Sav.

Bank v. Boersner, 413 Mass. 432, 436 n.7 (1992); Antonellis v.

Northgate Constr. Corp., 362 Mass. 847, 850-51 (1973) (even absent

specific evaluation of evidence by trial judge, finding of non-

integration upheld as not clearly erroneous); Alexander v. Snell,

424 N.E.2d 262, 264 (Mass. App. Ct. 1981); accord Brennan v. Carvel

Corp., 929 F.2d 801, 807 (1st Cir. 1991) ("[U]nder Massachusetts

law, the determination of whether a contract is completely or

partially integrated, or whether a second contract is collateral to

an integrated agreement, is a question of fact to be decided in the

first instance by the trial judge.").

Here, the district court did not make a specific finding

about integration, but the charge to the jury on amendments compels

the inference that the agreements were not integrated. The jury

was instructed to consider what the parties said and did concerning

the lease; because the instruction did not exclude actions prior to

or contemporaneous with the execution of the written lease, the

district court must have concluded that the lease was not an

integrated agreement.

After review of the record, we cannot say that this

determination was clear error. The Subsidy was explained to each

plaintiff in documents accompanying the lease, and many plaintiffs

testified they regarded the Subsidy as essential to their

businesses. There was evidence that the defendants said that the

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Subsidy was intended to be permanent, that the 30-day-notice

provision was only in place for cases of war or embargo, and that

the Dealers could rely on the continuation of the Subsidy or

something like it. The district court therefore had ample evidence

before it to determine that the lease was not an integrated

agreement.

Because the leases were not integrated, they could be

varied by mutual agreement. "Mutual agreement on modification of

the requirement of a writing may . . . be inferred from the conduct

of the parties and from the attendant circumstances." First Pa.

Mortg. Trust v. Dorchester Sav. Bank, 395 Mass. 614, 625 (1985)

(internal quotation omitted). The defendants assert that the

evidence was insufficient to allow the jury to decide, as it did,

that a promise to continue the Subsidy was incorporated into the

leases. The district court instructed the jury: "[Y]ou may

consider what each one said, one to the other, how they behave[d],

what each did, what each knew and what the circumstances were . .

. then you may infer . . . from their statements and their conduct

. . . whether both Shell and each plaintiff agreed to amend the

leases." Evidence adduced at trial included not only

representations made directly to the Dealers that the Subsidy or

something like it would always be available, but also internal

Shell documentation indicating that the Subsidy was intended to be

permanent, that franchisees should plan their businesses around the

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continued availability of the Subsidy, and that franchisees would

understand the loss of the Subsidy to be a breach of a promise by

Shell. A rational jury viewing this evidence might come to the

conclusion that the leases were amended to include the Subsidy.

Constructive Termination

The Dealers claimed that when Motiva breached their

leases by eliminating the Subsidy, that breach perfected a

constructive termination by Shell. The PMPA allows assignment of

duties in franchise agreements in accordance with state law. See

15 U.S.C. § 2806(b). But an assignment that is violative of state

law, or one that results in a breach of one of the statutory

components of a franchise, gives rise to a claim under the PMPA

against the original franchisor/assignor. In the words of the

Fourth Circuit, "A franchisor cannot circumvent the protections the

[PMPA] affords a franchisee by the simple expedient of assigning

the franchisor's obligation to an assignee who increases the

franchisee's burden . . . ." Barnes v. Gulf Oil Corp., 795 F.2d

358, 362 (4th Cir. 1986) (reversing summary judgment and holding

that where assignee breaches franchise agreement, action will lie

against franchisor/assignor). In Chestnut Hill Gulf v. Cumberland

Farms, Inc., 940 F.2d 744 (1st Cir. 1991), we adopted the test for

constructive termination articulated by the Sixth Circuit.

To sustain a claim, under the PMPA, that a franchisor
assigned and thereby constructively terminated a
franchise agreement, the franchisee must prove either:
(1) that by making the assignment, the franchisor

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 breached one of the three statutory components of the
franchise agreement, (the contract to use the refiner's
trademark, the contract for the supply of motor fuel, or
the lease of the premises), and thus, violated the PMPA;
or (2) that the franchisor made the assignment in
violation of state law and thus, the PMPA was invoked.

Id. at 750-51 (quoting May-Som Gulf, Inc. v. Chevron U.S.A., Inc.,

869 F.2d 917, 922 (6th Cir. 1989)).

What set Barnes apart from both Chestnut Hill Gulf and

May-Som Gulf was that in Barnes the assignment of the contract had

resulted in gasoline prices above the price specified in the

contract; in other words, Barnes concerned a breach of one of the

statutory elements of the franchise, the agreement for the supply

of branded motor fuel. The Fourth Circuit vacated summary judgment

for the defendant, holding that the breach of the contract for the

supply of gasoline created a constructive termination of the

franchise. In Chestnut Hill Gulf we held the PMPA was not

implicated because there was no evidence that any of the statutory

components of a franchise had been breached. "[A]ll thirteen

dealers continued to occupy the same service stations under the

same leases; they continued to purchase Gulf brand gasoline under

the same supply agreements; and they continued to do business under

the same Gulf trademark." Chestnut Hill Gulf, 940 F.2d at 752. In

May-Som Gulf, the defendants were entitled to summary judgment

because the plaintiffs had merely complained of potential breaches

to the franchise agreement. In the case before us, the Dealers

have proven to the jury's satisfaction that Motiva breached the

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lease component of the franchise agreements. That breach allowed

the jury to find that Shell constructively terminated the Dealers'

franchises when it assigned the franchises to Motiva.

The defendants argue that in order to show a constructive

termination, the breach must be contemporaneous with the assignment

and the breach must amount to a total deprivation of one of the

three elements of the franchise. Both contentions misunderstand

constructive termination.

First, we agree with the Fourth Circuit that an action

for constructive termination lies against the assignor of a

franchise when the assignee breaches the franchise. Barnes, 795

F.2d at 362. This prevents the assignor/franchisor from shielding

itself against liability through the use of another corporation.

"The [PMPA] does not contemplate that a franchisee should be

relegated to seeking damages from an assignee that might not have

the resources to satisfy a judgment." Id. A delay between the

assignment and the breach changes nothing. The reasons for this

are even stronger where the assignee is a subsidiary of the

franchisor, or a joint venture in which the franchisor is a party.

Second, the breach of the statutory element of the

franchise does not have to be a total breach. In Barnes the

plaintiff was "forced to raise her prices, and her sales and net

income . . . declined." Id. at 361. She did not suffer a complete

loss of the benefits of the motor fuel supply contract. The

-22-
defendants' attempted analogy to constructive termination in

employment law or constructive eviction in landlord-tenant law is

misleading. Those doctrines require an actual severance of the

relationship: The employee must leave the workplace; the tenant

must move out. But here, as the Dealers testified, sunk costs,

optimism, and the habit of years might lead franchisees to try to

make the new arrangements work, even when the terms have changed so

materially as to make success impossible. Indeed, some plaintiffs

testified they had gone into personal debt, driven themselves into

bankruptcy, or enlisted the aid of family members working without

pay to make ends meet. To require an actual abandonment of years

of work and investment before we recognize a right of action under

the PMPA would be unreasonable. The "congressional plan would be

frustrated by requiring a franchisee to go out of business before

invoking the protections of the PMPA." Pro Sales, Inc. v. Texaco,

U.S.A., 792 F.2d 1394, 1399 (9th Cir. 1986).

We do not here say that any material breach of the lease

would necessarily be sufficient to sustain the constructive

termination claim. In this case, the district court instructed the

jury that it could find constructive termination only if the breach

of the lease "was such a material change that it effectively ended

the lease, even though the plaintiffs continued to operate the

business . . . . It's not simply was the lease breached, but did

that breach amount to . . . effectively the end of the franchise

-23-
relationship." In this instruction the district court set an

appropriate threshold.

We agree with the district court that an assignor may be

liable for even a subsequent breach of the franchise agreement by

an assignee, and that a breach of the franchise agreement need not

result in complete deprivation of a statutory element of the

franchise to support a constructive termination.

Indeed, this case presents a strong argument for the

doctrine of constructive termination. At trial the Dealers argued

that Shell assigned the franchise agreements to Motiva, even

created Motiva, in order to squeeze them out of their franchises.

They presented evidence that this was the reason for the change in

the rent formulation, the elimination of the Subsidy, and the

dramatic increase in rents they paid. If the jury accepted this as

the reason, the case falls within the scope of the PMPA, which is

designed not to freeze the franchise agreements exactly where they

were,10 but to prevent franchisors from improperly terminating

franchises and thereby to ensure that franchisees benefit from

successful investment in their franchises.

This same protection for franchisee expectations

underlies the PMPA's requirement that a franchisor make a bona fide

10
See May-Som Gulf, 869 F.2d at 921-22 (noting that the PMPA
does not mandate "a permanent status quo" and that the act was not
meant to stymie "major national acquisition and large scale
divestiture" (quoting Russo v. Texaco, Inc., 630 F. Supp. 682, 683
(E.D.N.Y. 1986)).

-24-
offer, or grant a right of first refusal, to the franchisee when

the franchisor contemplates withdrawing from the relevant market,

selling the underlying real property, or dedicating the property to

another use. 15 U.S.C. § 2802(b)(2)(E) & (b)(3)(D). This is also

why parts of the PMPA place more restrictions on franchisors when

the purpose of termination or nonrenewal is to convert the station

to direct operation by the franchisor.11 Were it otherwise, the

franchisor could extract any increase in value created by the

franchisee's investment, without sharing that increase with the

franchisee. This would dampen the incentive for a franchisee to

develop the business. In this case, the Dealers presented evidence

11
For example, subsection 2802(b)(2)(E) requires that a
termination made pursuant to a franchisor's withdrawal from "the
marketing of motor fuel through retail outlets in the relevant
geographic market area" be "not for the purpose of converting the
premises . . . to operation by employees or agents of the
franchisor for such franchisor's own account." For another example,
nonerenewals are normally allowed if they are based on
determinations "to materially alter, add to, or replace such
premises," or determinations that the franchise "is likely to be
uneconomical despite any reasonable changes . . . which may be
acceptable to the franchisee." But subsection 2802(b)(3)(D)(ii)
explicitly prohibits nonrenewal under those same circumstances when
that determination is "made for the purpose of converting the
leased marketing premises to operation by employees or agents of
the franchisor." This language forbids termination or nonrenewal
under these circumstances even if the right of first refusal is
given or the bona fide offer is made. (This restriction does not
apply to sales of the premises, perhaps because the drafters of the
legislation did not imagine that the sale of the underlying
premises could be for the purpose of converting the station to the
franchisor's control. But cf. Patel v. Sun Co., 141 F.3d 447 (3d
Cir. 1998) (when franchisor sells underlying property with
leaseback provision to operate service station, PMPA implicated in
neither the sale of the property nor the termination of the
franchise on expiration of the franchisor's lease)).

-25-
that the defendants wanted to convert their stations to direct

operation.12 Where a franchisor has breached its obligations to the

franchisee such that the franchisee faces the effective end of the

franchise, the PMPA must treat that as a termination of the

franchise.

Neither will we contradict the jury's verdict. When we

are satisfied that the law has been faithfully interpreted, we will

overturn a jury's verdict only when no reasonable jury could have

come to that verdict on the facts presented. See Rodriguez-Torres,

399 F.3d at 57. The jury heard ample evidence to conclude that the

financial hardship resulting from the loss of the Subsidy meant the

end of the relationship. The defendants had opportunity to attack

the credibility of that evidence and to put on their own. We will

not step into the jury box to provide a second opinion. Nor was

the verdict against the demonstrable weight of the evidence or

likely to result in a blatant miscarriage of justice.

Consequently, there was no manifest abuse of discretion in the

district court's denial of the motion for a new trial.

12
Nothing in the PMPA would prevent the defendants from buying
the Dealers out. What the PMPA does forbid is franchisors using
their power to dictate impossible franchise terms in order to force
the franchisees to walk away from their investments or to sell them
at artificially low prices. That is exactly what the Dealers
claimed was happening here.

-26-
 Constructive Nonrenewal

As each Dealer's lease expired, Motiva presented a new

lease. The new leases changed the way rent was calculated, which

had the effect of increasing the rents charged. The Dealers argued

that this change and others were not made in good faith, as

required by the PMPA, but rather were part of the plan to drive the

franchisees out of business. They claimed that inclusion of these

terms amounted to a nonrenewal of their agreements, even though

each Dealer signed a new agreement (albeit "under protest"). We

conclude that the PMPA does not support a claim for nonrenewal

under these circumstances. We therefore vacate this portion of the

district court's judgment and remand with instructions to issue

judgment on this claim for the defendants.

It is the plaintiffs' burden to prove that a nonrenewal

or a termination has taken place. 15 U.S.C. § 2805(c). A notice

of nonrenewal issued pursuant to 15 U.S.C. § 2804, while not

strictly speaking a nonrenewal, presumably satisfies this burden.

See Dersch Energies, Inc. v. Shell Oil Co., 314 F.3d 846, 864 (7th

Cir. 2002) ("[A] franchisor's issuance of a notice of nonrenewal is

the precise equivalent of a nonrenewal."); Lippo v. Mobil Oil

Corp., 776 F.2d 706, 720 (7th Cir. 1985) ("In an action brought

under section 2805(a) the franchisee has the burden of proving

termination of the franchise. (This must really mean attempted

termination if the injunctive relief is to be of any use.)"). But

-27-
see Seckler v. Star Enter., 124 F.3d 1399, 1403 (11th Cir. 1997)

(no claim under PMPA when notice of nonrenewal rescinded before

action commenced); Akky v. BP Am., 73 F.3d 974, 974 (9th Cir. 1996)

(same).

The threshold question is whether to recognize such a

"constructive nonrenewal" and thereby bring Motiva's actions within

the reach of the PMPA. The Ninth Circuit is the only circuit so

far to recognize a claim for constructive nonrenewal. Pro Sales

792 F.2d 1394. In Pro Sales, the plaintiff signed a renewal

agreement "under protest" and immediately brought suit under the

PMPA. Id. at 1398. The court relied on legislative history to

conclude that these facts gave rise to a claim for constructive

nonrenewal under PMPA. Id. at 1399.

Pro Sales has been rejected by the other circuits to

consider the issue. The PMPA, after all, requires a franchisor to

provide a notice of nonrenewal, 15 U.S.C. § 2805(c), and then

provides a framework for the franchisee to seek preliminary relief

on receipt of that notice, id. § 2805(b)(2). Two circuits have

held that this notice-and-preliminary-relief structure is evidence

that Congress intended to limit the reach of the PMPA to cases

where either a notice is given or an actual nonrenewal has taken

place. See Abrams Shell v. Shell Oil Co., 343 F.3d 482, 489 n.16

(5th Cir. 2003) ("[T]he Seventh Circuit rejected the Pro Sales

approach based on a 'franchisee's ability to obtain an injunction

-28-
under the PMPA' in cases of nonrenewal. We reject the Pro Sales

approach on the same basis." (quoting Dersch Energies, 314 F.3d at

865)). Thus, in Dersch Energies, the Seventh Circuit held that a

franchisee who had signed a renewal "under protest" did not have a

claim for constructive nonrenewal because the franchise had in fact

been renewed. "Had Dersch allowed the defendants to issue a formal

notice of non-renewal, its dispute with the defendants would have

been transformed from a mere contract dispute into a non-renewal

(within 90 days) of its franchise relationship -- thus allowing it

to . . . maintain suit" under the PMPA. Id. at 866; accord Abrams

Shell v. Shell Oil, 343 F.3d 482, 489 (5th Cir. 2003) ("We find the

Seventh Circuit's reasoning in Dersch Energies to be especially

persuasive, thus we apply the same logic to this case. Plaintiffs

have not provided any evidence that Defendants failed to renew the

relevant agreements; therefore, Plaintiffs have not shown a breach

in the franchise relationship.").

The plaintiffs' constructive nonrenewal argument requires

the following reasoning. Had the Dealers refused to agree to the

new contract terms, Motiva would have issued notices of nonrenewal

alleging as a permissible basis for nonrenewal the "failure of [the

parties] to agree on changes or additions to the provisions of the

franchise . . . ." 15 U.S.C. § 2802(b)(3)(A). The Dealers would

have asserted that the nonrenewal was improper because the changes

were not offered in good faith, id. § 2802(b)(3)(A)(i), or else

-29-
were offered in order to convert the premises to the franchisor's

own control, id. § 2802(b)(3)(A)(ii). On those grounds the Dealers

could have sought preliminary relief and damages under the PMPA.

Id. § 2805(a) & (b).

The stumbling block that trips up the plaintiffs is that,

rather than insist on receiving notices of nonrenewal, the Dealers

signed the new agreements "under protest" and continued in

operation under the new agreements. We conclude that just as the

PMPA requires a clear indication from franchisors that they seek

nonrenewal of a franchise relationship, it likewise requires that

franchisees faced with objectionable contract terms refrain from

ratifying those terms by executing the contracts (even "under

protest") and operating under them. Allowing a franchisee to sign

"under protest" and then later challenge the renewal would extend

the period of uncertainty through the entire first year of a

contract that in this case was only three years. Recognizing

constructive nonrenewal also would enable a franchisee to sign the

contract and simultaneously challenge it. If its claims were

rejected by the courts, the franchisee would have lost nothing and

could continue to operate the franchise under the agreement with

the PMPA-enforced reasonable expectation of continuation and

renewal. Absent a claim for constructive nonrenewal, a franchisee

must wait for a notice of termination to bring suit under the PMPA.

The franchisee therefore risks the end of the franchise if the

-30-
claim fails and so must carefully weigh the decision to sign or

sue.13 This is the balance Congress has struck, and should we

prefer another, we would not be free to impose it. Consequently,

we reject application of constructive nonrenewal to these facts.

We note with some concern the limited scope of the PMPA.

Two unexpected consequences of the legislation seem to loom as

potential problems. The first is that franchisors will conform

their behavior to the letter of the law but still use their

position of power to impose their will on franchisees. The statute

is of course not a panacea and cannot be faulted for what it fails

to do. But some statutory protection is worse than none when it

serves as protective cover for the very misdeeds it purports to

eliminate. The second unintended consequence is that, to the

extent Congress succeeds in leveling the playing field, it makes

the franchise arrangement less appealing to franchisors. It is not

difficult to imagine protections for franchisees so strong that

13
In Pro Sales the suit was filed immediately and the plaintiff
obtained preliminary relief so that it never operated under the new
contract. This is different from Dersch Energies, where the
plaintiff operated under the new contract "for just under a year"
before filing suit. 314 F.3d at 865. The Dersch court noted the
distinction, but found it irrelevant. Id. We do not address the
question whether a preliminary injunction enabling the franchisee
to avoid operating under the new agreement combined with an
immediate suit, as in Pro Sales, would satisfy the requirements for
bringing suit under the PMPA. Such a case would avoid several of
the problems we have identified, but would still allow a franchisee
to challenge an agreement as a nonrenewal while retaining the right
to take advantage of that agreement should the challenge fail. We
hold only that under the facts before us today we cannot recognize
a claim for constructive nonrenewal.

-31-
franchisors abandon the model entirely. Evidence introduced at

trial spoke to both of these hazards. However, these are issues

for Congress to weigh and remedy, not for the courts.

Because we do not recognize a claim for nonrenewal under

the PMPA where the franchisee has signed and operates under the

renewal agreement complained of, we vacate this portion of the

district court's judgment and remand with instruction to enter

judgment on this count for the defendants.

Unreasonable Gasoline Prices

The Uniform Commercial Code, as adopted in Massachusetts,

contemplates the enforcement of contracts in which one party sets

the price of goods over time. Mass. Gen. Laws ch. 106, § 2-305(2).

But the price must be set in good faith. Id. The jury found that

the defendants had failed to set reasonable prices in good faith.

The defendants appeal on two grounds. First, they claim that the

"good faith" requirement means only that such a price may not

discriminate among similarly situated buyers.14 And second, the

defendants assert that the Dealers' evidence of unreasonable

pricing is inadequate as a matter of law, because 1) it was based

only on retail pricing charged by competitors to the Dealers,

rather than DTW prices charged to those competitors; and 2) the

Dealers' expert presented pricing analysis of only one competitor,

14
In this assertion they are supported by amici, whose brief is
gratefully acknowledged.

-32-
thereby failing to establish a "range" of prices outside of which

the defendants' wholesale prices fell. We find neither contention

persuasive.

Section 2-305(2) "rejects the uncommercial idea that . .

. the seller . . . may fix any price he may wish by the express

qualification that the price so fixed must be in good faith. Good

faith includes observance of reasonable commercial standards of

fair dealing . . . ." Id. § 2-305(2) cmt. 3; U.C.C. § 2-305(2)

cmt. 3. "[I]n the normal case "a 'posted price' or a future

seller's or buyer's 'given price,' 'price in effect,' 'market

price,' or the like satisfies the good faith requirement." Id.

The defendants and amici urge us to read this comment as providing

an absolute safe harbor for nondiscriminatory posted prices in open

price term contracts. This we will not do.

For one thing, the very comment on which the defendants

and amici rely expressly invokes the general notion of "reasonable

commercial standards of fair dealing." If the comment meant that

only discriminatory pricing would be disallowed it certainly could

have said that. For another, it is clear to us that a situation in

which one merchant is raising its prices in order to force a

customer out of business is hardly the "normal case." The Eleventh

Circuit allowed this question to go to a jury in a class action

involving another oil company's pricing policies. Allapattah

Servs. v. Exxon Corp., 333 F.3d 1248, 1262 n.16 (11th Cir. 2003)

-33-
(conceding that in a "normal case" nondiscriminatory pricing is

protected, but holding that where the allegation was that an oil

company was trying to drive service stations out of business,

"whether this case constituted a normal case was a factual issue

necessary to determine whether Exxon acted in good faith" and

therefore rightly submitted to the jury). More recently, the Fifth

Circuit upheld the denial of a motion for judgment as a matter of

law on the basis that setting gasoline prices in bad faith to drive

franchisees out of business violated the UCC. Mathis v. Exxon

Corp., 302 F.3d 448, 457-59 (5th Cir. 2002) ("[T]he jury's finding

that Exxon breached its duty of good faith in setting the DTW price

it charged the plaintiffs is not without foundation in the law or

the evidence."); see also Bob's Shell, Inc. v. O'Connell Oil

Assocs., 2005 U.S. Dist. LEXIS 21318 (D. Mass. Aug. 31, 2005);

Wayman v. Amoco Oil Co., 923 F. Supp. 1322, 1349 (D. Kan. 1996)

(finding that the case before it was a "normal case" but noting

that "[i]f there was evidence that Amoco had, for example, engaged

in discriminatory pricing or tried to run plaintiffs out of

business, then the court's decision might be different"). But

see Shell Oil v. HRN, Inc., 144 S.W.3d 429, 435-38 (Tex. 2004)

(holding absence of price discrimination created presumption of

good faith notwithstanding allegations that that oil company set

prices in bad faith as part of a plan to drive franchisees out of

business).

-34-
 Commerce is predicated on the idea that a transaction is

good for both buyer and seller. The comment recognizes that

allowing one party complete control over the price would be

"uncommercial." We do not think the only reason for this is the

risk of price discrimination. The drafters of the UCC and amici

here are rightly concerned about a flood of litigation second-

guessing every price set in an open price term contract. Mere

allegations of bad faith will never be enough to survive summary

judgment. But this case comes to us after a jury verdict finding

bad faith and commercial unreasonableness.

Nor do the defendants' objections to the sufficiency of

the evidence require us to set the jury verdict aside. While

perhaps more specific and more comprehensive evidence would be

preferable, the jury had enough evidence of the defendants' motives

and practices, as well as enough information about competitors'

pricing, to come to the conclusion that the DTW prices were

commercially unreasonable. Specifically, the use of competing gas

stations' retail prices to draw conclusions about what those

stations might be paying for gasoline is not ideal, but is adequate

to the task at hand. In fact, it is the same benchmark that the

defendants used in their "street-back" pricing model in setting the

DTW price in the first place. In the light of this, the defendants

cannot be heard to complain that such prices are not a good measure

of what other distributors of gasoline are charging. And although

-35-
the Dealers' expert failed to present a "range" of such prices, the

expert testimony was not the only testimony available. One Dealer

testified that the retail prices he observed were equal to or lower

than the wholesale prices he paid. Additionally, at least one

Dealer had firsthand knowledge of the DTW prices charged in the

same area by another franchisor. On appeal, the defendants put

forward once again the contentions of their own experts regarding

the range of prices set by competitors. But it was up to the jury

to choose between these competing characterizations, and the jury

did so.

Damages15

The defendants argue that the damages awarded for the

PMPA constructive termination claim are not supported by sufficient

evidence. The district court instructed the jury to calculate two

kinds of damages: damages in the amounts of rents paid that were

in excess of the rents under the Subsidy, and damages for reduction

in the values of the Dealers' businesses. We agree with the

district court that there was ample evidence in the record for the

15
Damages for the state contract claim duplicate those for
constructive termination under the PMPA. We discuss these damages
only once, under the PMPA. Also, because we vacate the jury's
verdict on the constructive nonrenewal claim, we do not consider
the damages awarded under that claim. For the same reason, we do
not address the defendants' argument on appeal that the awards for
constructive termination and constructive nonrenewal were
duplicative.

-36-
jury to make a damages award, and we uphold that award as

reasonable.

The defendants claim that the damages are not supported

by sufficient evidence for two reasons. First, the plaintiffs'

expert used the VRP when calculating damages for excess rent,

rather than the STIP, as would have been correct. Because the STIP

was less generous, the expert's figures were probably too high.

And second, the expert presented damages figures for lost business

value, but those figures were based on excess rent paid under the

new leases, not on the elimination of the Subsidy. Because this

testimony applied properly only to damages under the constructive

nonrenewal claim, the defendants say that a correspondence between

the expert's figures and the actual awards for lost business value

awarded under the constructive termination theory must be error.

We address each of these in turn.

The judge instructed the jury to find damages for excess

rent paid due to the elimination of the Subsidy and for the loss of

value to the Dealers' businesses due to the increased rent and the

higher gasoline prices.

Calculation of excess rent requires several predictions:

of the Subsidy threshold amount, of the discount rate, and of how

much gasoline the Dealers could have sold under the scheme. Aside

from those assumptions it is a relatively certain calculation, on

-37-
which expert testimony was received.16 The Dealers' damages expert

concededly used the VRP instead of the STIP to calculate damages,

thereby potentially inflating the damages. But even if we could

state with certainty that the damages were therefore inaccurate,

that would not necessitate our remanding for a new damages

calculation or our settling the matter ourselves. A clock that is

five minutes fast is, strictly speaking, wrong. But it still may

give a general sense of the time and thereby serve its purpose.

And the damage figures provided by the expert are, after all, only

guideposts for the jury.

Calculating the loss of business value, on the other

hand, relies on many more intangible factors and requires many more

assumptions. In this respect it is similar to calculating future

lost profits, which we have previously held is a more speculative

inquiry than normal economic damages calculations. See, e.g.,

Camar Corp. v. Preston Trucking Co., 221 F.3d 271, 279 (1st Cir.

2000) ("[M]athematical precision is not required in calculating

lost profits" but "a damages award must have a rational basis in

the evidence." (internal quotation omitted)); E. Mountain Platform

16
Even this normally simple calculation is complicated somewhat
in these circumstances. Higher rents may have forced the Dealers
to maintain higher gasoline prices, which in turn might have
lowered sales volume. The Subsidy reduced rents based on gasoline
volume, so a change in that volume would render more uncertain even
the damages on this element. (At least one of the Dealers
testified that he would sometimes lower his gasoline prices because
he could recoup the lost margin based on increased volume and the
lowered rent provided by the Subsidy based on that volume.)

-38-
Tennis v. Sherwin-Williams Co., 40 F.3d 492 (1st Cir. 1994)

(upholding as not erroneous a jury's award of future lost profits

where the company was only "at a break-even point" and operations

were not yet profitable). We reject the defendants' comparison of

this case to Kolb v. Goldring, 694 F.2d 869, 873 (1st Cir. 1982).

That case dealt with lost wages, in a statutory setting that

limited recovery to "accounts owing" on a similar footing as a

"common law suit for back wages for breach of contract." Id. at

871-82. Here, the plaintiffs are entitled to the loss of the value

of their business as a result of the defendants' actions.

Because that calculation is necessarily complex and

uncertain, we require from the jury less rigor in making the award.

Here, along with expert testimony, the Dealers presented testimony

that the defendants themselves had valued these stations more

highly before the elimination of the Subsidy, and that some of the

franchises had lost substantial value. We recognize the wide

latitude afforded the jury in this situation -- asked to make an

uncertain calculation on little hard evidence -- and we are mindful

that we review to see only if no rational jury could have made this

award. "[T]he assessment of damages cannot be disturbed unless the

award exceeded any rational appraisal or estimate of the damages

that could be based upon the evidence or was grossly excessive,

inordinate, shocking to the [conscience] of the court, or so high

that it would be a denial of justice to permit it to stand."

-39-
Consolo v. George, 58 F.3d 791, 795 (1st Cir. 1995) (quotation

marks and citations omitted). We decline to go so far.

The jury's awards largely correlate with the figures put

forward by the Dealers' damages expert. We believe, as did the

district court, that once the weaknesses in the expert's figures

were pointed out in closing arguments and jury instructions, the

jury nonetheless was free to use them as markers of probable

damages. That the jury adhered closely to these numbers does not

change the fact that the jury was aware of their inadequacies. The

jury may have decided that they were close enough, or that no other

method of calculation would be better. While a jury is not free

"to pull figures out of a hat," Kolb, 694 F.2d at 873, we believe

that the expert's testimony, the availability of the expert's

background data, and the cautionary instruction issued by the

district court gave enough guidance to the jury.

And the jury did not simply parrot the expert's figures

in any event. In fact, where the jury did depart from the experts'

figures, the defendants attack those departures as aberrations

deserving of reversal. Three Dealers received awards in excess of

the damage expert's calculations. The defendants characterize

these as mystery "bonus" amounts unsupported by any view of the

evidence. But each of these three Dealers testified to particular

hardships that the jury might have thought indicated special

reductions in business value. The jury may well have been

-40-
performing its function in calculating losses in business value

stemming from those hardships.

Similarly, we find that the jury had ample evidence to

make a damages award for the claim under the open price term of the

gasoline supply contract. That it differed in some particulars

from the numbers put forward by the expert is immaterial,

particularly where, as here, different forms of evidence showed

different pieces of this picture.

The award of attorneys' fees is mandated by the PMPA.

Because we uphold only one of the two statutory claims, however, we

must remand for a determination whether the failed constructive

nonrenewal claim was a "severable" claim for the purpose of

awarding attorney's fees. Such fees are normally not recoverable.

See Figueroa-Torres v. Toledo-Dávila, 232 F.3d 270, 278 (1st Cir.

2000) (fees for unsuccessful severable claims normally not

recoverable); Coutin v. Young & Rubicam, P.R., 124 F.3d 331, 339

(1st Cir. 1997) (discussing framework for determining whether to

reduce fees); see also Hensley v. Eckerhart, 461 U.S. 424, 434-37

(1983). We are mindful both of the district court's discretion in

this matter, and of the Supreme Court's admonition that

determination of attorney's fees should not result in a second

major litigation. Hensley, 461 U.S. at 437. But we have no basis

here on which to make a judgment, and so we must remand.

-41-
 Conclusion

The judgment of the district court on the state contract

claims, the unreasonable gasoline pricing claims, and the

constructive termination claims is affirmed. The judgment on the

constructive nonrenewal claims is reversed. The jury awards as to

the surviving claims are affirmed as rational awards supported by

sufficient evidence. The award of attorney's fees and costs is

vacated and remanded for reconsideration in the light of our mixed

disposition of the claims under the PMPA. Costs on appeal are

awarded to the appellees.

-42-