JOSÉ A. CABRANES, Circuit Judge:
Defendant Lehigh Gas Corporation ("Lehigh") appeals from a summary judgment of the United States District Court for the Northern District of New York (Glenn T. Suddaby, Judge) awarding damages to plaintiffs, Jimico Enterprises, Inc. ("Jimico") and Brownson Enterprises, Inc. ("Brownson," jointly "plaintiffs"), under the Petroleum Marketing Practices Act ("PMPA" or "Act"), 15 U.S.C. §§ 2801-2841. Lehigh contends (1) that the PMPA does not provide a right of action to "trial franchisees" for violations of the Act's notice provisions, id. § 2804; and (2) that, if the Act does provide such a right of action, the District Court erred in awarding compensatory damages, punitive damages, attorney's fees and costs, and pre- and post-judgment interest to plaintiffs. As we conclude (1) that the PMPA does provide a right of action, both to "full" and "trial" franchisees, when a franchisor fails to comply with the Act's notice provisions, and (2) that the District Court properly awarded damages, fees, costs, and interest to plaintiffs, we affirm the amended judgment of the District Court.
As the Supreme Court has explained, "[p]etroleum refiners and distributors supply motor fuel to the public through service stations that often are operated by independent franchisees. In the typical franchise arrangement, the franchisor leases the service-station premises to the franchisee, grants the franchisee the right to use the franchisor's trademark, and agrees to sell motor fuel to the franchisee for resale." Mac's Shell Serv., Inc. v. Shell Oil Prods. Co., 559 U.S. 175, 130 S.Ct. 1251, 1255, 176 L.Ed.2d 36 (2010). This suit concerns the rights a franchisee
Prior to April 2007, plaintiffs operated five gas stations along the Governor Thomas E. Dewey Thruway ("Thruway"), more commonly known as the New York State Thruway, which extends from New York City, through Albany, Syracuse, and Buffalo, to the Pennsylvania state line. Jimico operated three stations — one on each side
On June 1, 2006, Jimico and Brownson, as franchisees, entered into franchise relationships
On May 31, 2007, plaintiffs filed this suit, claiming, inter alia, that Lehigh violated the PMPA when it terminated their franchises without any notice. The District Court granted plaintiffs' motion for summary judgment on July 27, 2010, holding that Lehigh had failed to give adequate notice of termination under the PMPA. On October 14, 2010, after an evidentiary hearing on damages, the District Court awarded plaintiffs a total of $141,892.79 in compensatory damages and $30,000 in punitive damages. The District Court subsequently awarded attorney's fees and costs, as well as pre-and post-judgment interest to plaintiffs, and entered judgment.
Lehigh argues that the District Court erred in awarding damages, attorney's fees and costs, and pre- and post-judgment interest to plaintiffs on two grounds. First, Lehigh contends that the PMPA provides no right of action for inadequate notice of termination. Second, Lehigh urges that, even if the PMPA does authorize such an action, the District Court's damages, fees, and costs awards were inappropriate in these circumstances.
We review an order granting summary judgment de novo and "resolv[e] all ambiguities and draw[] all permissible factual inferences in favor of the party against whom summary judgment is sought." Burg v. Gosselin, 591 F.3d 95, 97 (2d Cir.2010) (internal quotation marks omitted). We review the District Court's determination of the size of a damages award for clear error, Serricchio v. Wachovia Sec. LLC, 658 F.3d 169, 191 (2d Cir.2011), and its award of attorney's fees for abuse of discretion, Barbour v. City of White Plains, 700 F.3d 631, 634 (2d Cir.2012); see also In re Sims, 534 F.3d 117, 132 (2d Cir.2008) (noting that a district court abuses its discretion if it "base[s] its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence, or render[s] a decision that cannot be located within the range of permissible decisions" (internal citation and quotation marks omitted)).
Lehigh contends that the plain language of the PMPA does not permit a right of action for violations of the notice provisions contained in § 2804. As with any question of statutory interpretation, we begin by examining the text of the statute. See Schindler Elevator Corp. v. United States ex rel. Kirk, ___ U.S. ___, 131 S.Ct. 1885, 1891, 179 L.Ed.2d 825 (2011). "The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). "In interpreting the statute at issue, we consider not only the bare meaning of the critical word or phrase but also its placement and purpose in the statutory scheme." Holloway v. United States, 526 U.S. 1, 6, 119 S.Ct. 966, 143 L.Ed.2d 1 (1999) (alteration and internal quotation marks omitted).
We previously have observed that "Congress enacted the PMPA to establish minimum Federal standards governing the termination and nonrenewal of franchise relationships for the sale of motor fuel by the franchisor or supplier of such fuel." Mobil Oil Corp. v. Karbowski, 879 F.2d 1052, 1055 (2d Cir.1989) (internal quotation marks omitted). Although the PMPA addresses several concerns identified by Congress in the marketing of gasoline, "its paramount objective is to redress disparities in bargaining power and to prevent the ensuing arbitrary termination" by franchisors. Darling v. Mobil Oil Corp., 864 F.2d 981, 984 (2d Cir.1989); see also Mac's Shell Serv., 130 S.Ct. at 1255 ("[T]he PMPA was a response to widespread concern over increasing numbers of allegedly unfair franchise terminations and nonrenewals in the petroleum industry."); Mobil Oil Corp., 879 F.2d at 1055 ("The overriding purpose of the PMPA is to provide protection for franchisees from arbitrary or discriminatory termination or non-renewal of their franchises." (internal quotation marks omitted)).
In order to prevent arbitrary action by franchisors, the PMPA sets out precise notice requirements, which must be followed
Lehigh's argument, however, is contradicted by a plain reading of the statute and by controlling precedent. Indeed, although § 2805 does not specifically identify § 2804 in the list of sections giving rise to a right of action, it does provide a private right of action to enforce § 2802, which explicitly incorporates § 2804's notice requirements by providing that a franchisor may only terminate a franchise if "the notification requirements of section 2804 of this title are met." Id. § 2802(b)(1)(A).
Lehigh further claims that, even if a right of action exists to enforce the notification provisions with respect to a full franchise, there is no right of action for failure to comply with the notification provisions with respect to a trial franchise. Although we have not previously had an opportunity to address this precise question, Lehigh's contention finds no support in the text of the PMPA.
Section 2803 governs trial franchises. It exempts franchisors who fail to renew trial franchises from complying with the requirements of § 2802 because, unlike full franchises, trial franchises may be nonrenewed for any reason.
Nevertheless, Section 2803 does not exempt franchisors who terminate
Both the structure and purpose of the PMPA reinforce our conclusion that the termination provisions — including the notice requirement — of § 2802 apply to trial franchises, even though the nonrenewal provisions of § 2802 do not. Under Lehigh's reading of the PMPA, a franchisor need not provide notice before terminating a franchise (the more sudden event), but must provide notice before failing to renew one (the less sudden event). That interpretation is not only illogical, but runs counter to the articulated purposes of the statutory scheme, see Holloway, 526 U.S. at 6, 119 S.Ct. 966, because Lehigh's reading
Instead, we recognize the coherent and reasonable structure built by the clear text of the PMPA, and understand that a "trial franchise" is just that: a trial. Under a trial franchise relationship, the franchisee is guaranteed a trial period, during which it is free from arbitrary or sudden termination. See 15 U.S.C. § 2802(a), (b). At the conclusion of the trial period, however, upon proper notice, the franchisor may conclude that the experiment has failed and elect not to renew the relationship. See id. § 2803. The plain language of the statute articulates this framework, and we must therefore enforce it. See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002) ("The inquiry ceases if the statutory language is unambiguous and the statutory scheme is coherent and consistent." (internal quotation marks omitted)).
In sum, we hold that a trial franchisee does have a right of action, under § 2805, against a franchisor that terminates its franchise without proper notice. Accordingly, we conclude that the District Court properly granted summary judgment in favor of plaintiffs.
Lehigh also challenges the District Court's award of compensatory and punitive damages, attorney's fees and costs, and pre- and post-judgment interest, pursuant to § 2805.
After reviewing the record, we find no clear error in the District Court's well-reasoned damages analysis. Furthermore, we find no error in the District Court's punitive damages award based on its finding of willful disregard of the PMPA's requirements, pursuant to § 2805(1)(B), and no abuse of discretion in the District Court's award of attorney's fees and costs and pre- and post-judgment interest, see
Finally, plaintiffs request attorney's fees and costs for defending this appeal. Under the PMPA, a prevailing franchisee is entitled "to reasonable attorney and expert witness fees ... unless the court determines that only nominal damages 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." 15 U.S.C. § 2805(d)(1)(C); see also Mac's Shell Serv., 130 S.Ct. at 1260 n. 7 ("The Act requires courts to award attorney's fees and expert-witness fees in any case in which a plaintiff recovers more than nominal damages." (emphasis in original)). Inasmuch as plaintiffs have prevailed in this action and have been awarded more than nominal damages, they are entitled to fees for defending this appeal, in an amount to be determined on remand by the District Court. We emphasize that plaintiffs are entitled only to reasonable fees. 15 U.S.C. § 2805(d)(1)(C).
To summarize:
The amended judgment of the District Court is
Id. § 2803(b)(1).
(a) General requirements applicable to franchisor
(b) Additional requirements applicable to franchisor
(c) Manner and form of notification
Notification under this section —
15 U.S.C. § 2804.
Additionally, upon proper notice, § 2802 permits the nonrenewal of a franchise relationship — but not the termination of a franchise — if (1) the franchisor and franchisee fail to agree on new terms proposed in good faith, (2) the franchisor receives numerous bona fide customer complaints concerning the franchisee which the franchisee does not promptly correct, (3) the franchisee fails to operate the premises in a clean, safe, and healthful manner, or (4) the franchisor makes a good faith determination in the normal course of business to convert the premises to another use, materially alter the premises, or sell the premises, or that the franchise relationship is likely to be uneconomical despite reasonable changes to the relationship. Id. § 2802(b)(3). As noted above, franchisors are exempted from the nonrenewal requirements as to trial franchises. Id. § 2803(a). The clear purpose of exempting trial franchises from these provisions is to allow franchisors the freedom to decide not to renew the franchise relationship after the trial period.
15 U.S.C. § 2805(d).