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Author: LegalEase Solutions


Plaintiff is a gas station dealer who runs a gas station.  Defendant Sunoco franchises gas stations to dealers across the country. Plaintiff had originally executed a franchise agreement with Sunoco, which governed the relationship between Plaintiff and Sunoco.  The franchise agreement is in turn governed by the Petroleum Marketing Practices Act (PMPA), US Code TITLE 15 CHAPTER 55. Sunoco has superior bargaining power over the Plaintiff since it controls the supply of gasoline and sets the price of the gasoline (“rack price”).

The franchise agreement expired in March 2004 and neither Sunoco or Fusion made any attempt to renew the agreement.  Plaintiff is aggrieved that neither Fusion nor Sunoco attempted to renew the franchise agreement in good faith as required under the Franchise Agreement, which is governed by the PMPA.  Additionally under the Franchise Agreement, both Sunoco and Fusion had a duty to give 90 day notice to terminate the Franchise Agreement, which they failed to do.

In addition to the lack of good faith, displayed in failing to renew the Franchise Agreement, the Defendant Sunoco committed malfeasance by permitting Harajli, Fusion’s owner, to open another Sunoco gas station only half a mile away from Plaintiff’s gas station.   Fusion also has been posting prices below plaintiffs’ prices, thus diverting sales away from Plaintiff.  Thus, as a consequence of Sunoco’s actions, Plaintiff suffered economic loss on two counts; not only was Mr.Harajli charging him a significant margin over the rack price, he was also competing with him half a mile away with cheaper gas.  In other words, instead of seeing to it that Fusion fulfilled its obligations under the Franchise Agreement to renew in good faith, Sunoco in fact assisted Fusion in undermining Plaintiff’s business.

The Plaintiff seeks information with regard to the Sunoco station opened by Mr. Harajli half a mile away from Plaintiff’s gas station, since the circumstances surrounding the opening of the station and details regarding the business operations of this station are crucial.  The facts in question are relevant as they directly address the good faith exercised by Defendants and establish that the defendant had an ulterior motive for failing to renew Plaintiff’s franchise agreement.

In the deposition of Mr. Harajli, Plaintiffs sought information from Defendant Fusion about the second Sunoco station. Defendant refused to answer any questions about the second Sunoco station, stating that it was irrelevant.  This is Plaintiffs’ Response to Defendant’s Response to Plaintiff’s Motion to Compel Defendant Fusion to answer questions about the second Sunoco station.


All questions relating to the new gas stations are relevant, as they go to the question of good faith exercised by Defendant. Franchise agreements in the scenario of the petroleum business are governed by the PMPA (“the Act”). The “good faith” principle is clearly enunciated in the PMPA and the Franchisor is bound by it.

Applicable Legal Standard

The information sought is within the scope of allowable discovery under the Federal Rules of Civil Procedure.  Fed. R. Civ. P. 26(b)(1) provides:

Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. (Emphasis added)

The purpose of discovery is to provide a mechanism for making relevant information available to the litigants. “Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation.” Hickman v. Taylor, 329 U.S. 495, 507 (1947).  The deposition-discovery rules are to be accorded a broad and liberal treatment to effect their purpose of adequately informing the litigants in civil trials. Schlagenhauf v. Holder, 379 U.S. 104, 114-115 (1964).  Furthermore, under Rule 30(d) a party may instruct a deponent not to answer only when the answer is privileged or the question is made in bad faith. Fed. R. Civ. P. 30(d).  Only strong public policies weigh against disclosure, such as the protection provided by the attorney-client privilege.  United States v. Procter & Gamble Co., 356 U.S. 677, 683 (U.S. 1958)

The information sought in the case at bar clearly falls within the scope of FRCP 26(b)(1), as it relates to both claims and defenses of Plaintiff, as explained, infra.


The injustice done to the Plaintiff is a pivotal point for consideration. The Plaintiff was forced out of business due to unfair trade practices adopted by the defendants.  Defendants utterly failed to deal with Defendant in good faith in violation of the PMPA. Discovery with respect to these aspects is crucial.

In the present case, the Plaintiff has discharged its duty of showing that the Franchise Agreement has been terminated. Fusion has not provided any evidence to establish its submission that its non-renewal of the Franchise Agreement resulted from a business decision made in good faith.  Discovery is essential to establish the focal point of the Plaintiff’s cause of action namely the lack of good faith exercised by the defendants which in turn caused irreparable loss to Plaintiff.

At the outset, the Plaintiff has established that neither Fusion nor Sunoco pass the good faith test.  Rather, both Fusion and Sunoco had a discriminatory motive for non-renewal and acted in an arbitrary manner, thereby violating the Act’s requirement of good faith. The deposition of Mr. Gifford, Area Manager for Sunoco, is crucial to establish bad faith by Fusion and Sunoco (See Gifford Deposition, page 5).  Mr. Gifford’s responsibilities include, inter alia, appointment of new distributors. Id. at 5.   Mr. Gifford testified that he had initially denied Fusion’s request to open a Sunoco station half a mile from the Westland Station “ because they were too close to one another” Id. at 46.  Gifford testified that later he did sanction the request and told Mr. Harajili that as long as it was “O.K” with him, he could open the other Sunoco Station.  Gifford does not recall if he first consulted the Plaintiffs, since he believed it was a matter between the Distributor (Fusion) and dealer (Westland Station) Id. at 47.  Gifford also testified that he was not specifically aware of another instance in which two Sunoco stations located within a mile of each other fell under the authority of the same distributor while one of Sunoco station’s distributor was simultaneously the dealer.  Id. at 51.

The gas station owned by Mr. Harajili is only half a mile away from the Plaintiff’s gas station. Gifford’s testimony established that the circumstances surrounding the opening of the station were questionable. Not only are the two gas stations close to each other, but the new one operated by Fusion has been posting prices less expensive than those of the Plaintiff,  thus diverting sales away from Plaintiff. Information with regard to this aspect is crucial for the just determination of the Plaintiff’s claim.

The owner of Fusion and the second gas station are the same and, while they may not be formal parties to this action, information and facts relating to their relationship to the Defendant are nevertheless relevant. Mr. Harajili’s deposition is relevant to establish that the Defendants have been posting prices lower than the Plaintiff and are aware that it is detrimental to the Plaintiff.  In his deposition, Harajli clearly stated that “customers go for the price not the brand.” Harajli Deposition at 119, and went on further to reiterate that “They don’t follow the brand, they follow the price ” Id at 121. He indirectly accepted that he was posting prices lower than the Plaintiff and excused it by stating “It’s your client’s business to enhance his station and build a C-store so he can compete.”  Id at 123.  He also stated that, though the other Sunoco station is half mile away from the Plaintiff’s, he will not be driven out of business because he has “his own corner” and “his own neighborhood.”

Sunoco granted Fusion undue advantage as a distributor over the Plaintiff and wrongfully sanctioned the Fusion’s station, which resulted in economic loss to the Plaintiffs.  It is evident that the decision of Sunoco to allow Fusion to open another Station half a mile from the Westland Station was made in an arbitrary manner and that neither Sunoco nor Fusion acted in good faith.

Mr. Harajili had the motive to put the Plaintiff out of business since he had the interests of his own establishment at heart. Therefore, the details relating to the circumstances surrounding the opening of the new gas station also owned by Mr. Harajili are crucial. The Franchise agreement was not renewed with the ulterior motive of allowing Mr. Harajili’s new business to flourish at Plaintiff’s expense.

The fact that a Fast Track and British Petroleum are also located near to Plaintiff’s business is also relevant. Sunoco is encouraging unhealthy competition amongst its own operators. Moreover the Plaintiff’s complaint is not the competition per se.  Rather, it was the ulterior motive with which the defendant did not renew the Agreement.

After the expiration of the Franchise Agreement, Fusion unilaterally imposed its own terms and conditions to govern the franchise relationship, including, but not limited to: (1) unilaterally increasing the rent from $4,800 to $5,921 beginning in March, 2004, resulting in an approximate increase of 23%; (2) unilaterally shifting the responsibility of conducting certain repairs to plaintiff, contrary to the expired Dealer Franchise Agreement; (3) unilaterally increasing the fuel price by approximately 2 cents per gallon, contrary to the established practice between plaintiff and Sunoco.

The Defendant did nothing to attempt to renew in good faith. These unilateral changes were proposed fully knowing that the Plaintiff would not find them viable and would be forced out of business.

Throughout the deposition of Mr. Harajli, Mr. Harajli  refused to answer key questions regarding the second Sunoco station he operates.(See  Harajli Deposition pgs. 11-15).  The operation of the second station is highly relevant to the issue of good faith exercised by Fusion in terminating the Franchise Agreement, as explained above, and in light of the liberal discovery rules favored by the Courts,  Defendant Harajli must be ordered to answer all questions relating to the second Sunoco gas station.


The information sought in the Motion to Compel Discovery of Evidence relating to a new gas station that Defendant opened only half a mile away from Plaintiff’s gas station is relevant.  All questions relating to the new gas stations are relevant, as they go to the heart of the matter, namely the question of good faith exercised by Defendant, which is illustrated by Defendant’s ulterior motive for not renewing Plaintiff’s franchise agreement.

Accordingly, it is respectfully requested that Plaintiff’s Motion to Compel Discovery be granted.