Jessica L. Farley, Joseph S. Goode, and Mark M. Leitner have published an article in the latest volume of the Franchise Law Journal, Seven Years Hence: Constructive Termination Since Mac’s Shell.
The Franchise Law Journal is a national peer-reviewed publication of the American Bar Association Forum on Franchising. The Forum’s mission is to be the preeminent setting for the study and discussion of the legal aspects of franchising.
LLG’s article discusses developments in the doctrine of constructive termination in the franchise context after the U.S. Supreme Court’s 2010 decision in Mac’s Shell Service, Inc. v. Shell Oil Products Co., 559 U.S. 175 (2010). Constructive termination is a legal theory that allows a franchisee to claim that they have been “terminated,” even though the franchisor has not officially terminated the franchise relationship.
In Mac’s Shell, the Supreme Court examined a claim for constructive termination of a franchise based on the Petroleum Marketing Practices Act (“PMPA”). Among other things, the PMPA regulates whether, and under what circumstances, a petroleum franchisor may lawfully terminate its petroleum franchisees. The Supreme Court decided that a petroleum franchisee does not have a valid claim for constructive termination under the PMPA if the franchisee is still operating his or her franchise. In other words, a franchisee cannot continue in business while at the same time claiming he or she was “constructively terminated.” Commentators after Mac’s Shell suggested that the decision would have far-reaching impact on the law of constructive termination beyond the specific setting of a PMPA claim.
LLG’s recent article examines whether, and to what extent, lower courts have expanded the reach of Mac’s Shell in the franchise arena, and whether it has impeded constructive termination claims in the non-PMPA context. Co-Author Joseph S. Goode suggests, “people will be surprised seven years later about the limited use of Mac’s Shell in litigating constructive termination claims in the franchise and dealership context.” If you would like to read the article, click here.
As active members of the ABA’s Forum on Franchising, regular contributors to the Franchise Law Journal, and thought leaders in franchise and dealership law, Jessica, Joe, and Mark look forward to the continued opportunity to author future articles and provide meaningful analysis for the franchising industry and contributions to franchise scholarship.
