Sung Eel Chang Auto, Inc. v. ExxonMobil Oil Corporation , 507 F. App'x 208 ( 2012 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
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Nos. 10-2813, 10-2992, and 11-1142
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*JOC INC., t/a SUMMIT EXXON;
SUNG EEL CHANG AUTO, INC., t/a ASHWOOD EXXON
v.
EXXONMOBIL OIL CORP.;
EXXON MOBIL CORP.
ExxonMobil Oil Corp. Appellant in Nos. 10-2813 and 11-1142
Sung Eel Chang Auto, Inc., t/a Ashwood Exxon Appellant in No. 10-2992
* Dismissed pursuant to Court Order entered January 17, 2012
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On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2-08-cv-05344)
District Judge: Stanley R. Chesler
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Submitted Under Third Circuit LAR 34.1(a)
December 18, 2012
Before: MCKEE, Chief Judge, SLOVITER, and VANASKIE Circuit Judges
(Filed: December 19, 2012)
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OPINION
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1
SLOVITER, Circuit Judge.
The ExxonMobil Oil Corporation (“Exxon”) and Sung Eel Chang Auto, Inc., t/a
Ashwood Exxon (“Ashwood”),1 cross-appeal from a District Court preliminary
injunction that barred Exxon from terminating the Ashwood franchise for certain reasons.
Because the franchise no longer exists, there is no live controversy before us and we will
dismiss the appeals as moot.
I. Background
We write primarily for the parties and recount only the essential facts. The three
consolidated appeals in this case concern the former Ashwood Exxon gas station, which
led a troubled existence as an Exxon franchise from 1996 until 2011. As a franchisee,
Ashwood leased its property from Exxon and was obligated to purchase its gasoline from
Exxon. In 2008 Ashwood filed suit against Exxon in New Jersey state court, alleging
that Exxon charged it higher wholesale rates for gasoline than it charged competing
stations, and that the divergent pricing violated New Jersey law. Exxon argued that its
pricing was lawful and that Ashwood’s own business practices were the cause of its
financial distress. The suit was removed to federal court on the grounds of diversity of
citizenship.
1
Ashwood is the sole remaining plaintiff in the underlying action. The second original
plaintiff, JOC, Inc. t/a Summit Exxon, settled with Exxon and withdrew while these
appeals were pending.
2
In 2009, Ashwood stopped paying rent. Exxon commenced proceedings to
terminate the franchise, and Ashwood moved for a preliminary injunction to bar
termination while the lawsuit was ongoing.2 Between May and December of 2010 the
District Court issued three orders that, in combination, partially granted and partially
denied the injunction. Their final effect was to bar Exxon from terminating the franchise
on the basis of Ashwood’s contractual violations prior to December 2010. The District
Court declined, however, to prohibit Exxon from terminating the franchise on any new
ground that might arise. Exxon appealed the partial bar, and Ashwood cross-appealed
the denial of a broader injunction.3
After the appeals were filed, Exxon terminated the Ashwood franchise, effective
May 2011, on the basis of Ashwood’s new violations of its contractual obligations.
Ashwood was evicted from the station premises in January 2012.4
2
Prior to the preliminary injunction, the parties conducted settlement negotiations and
litigated a motion to dismiss. See JOC, Inc. v. ExxonMobil Oil Corp., 2010 WL 1380750(D.N.J. April 1, 2010) (partially granting and partially denying Exxon’s motion).
Ashwood filed an Amended Complaint after the District Court issued its opinion.
3
As docketed, No. 10-2813 is Exxon’s appeal of the May 18 and June 4 injunction
orders, No. 10-2992 is Ashwood’s cross-appeal from the June 4 order, and No. 11-1142
is Exxon’s appeal of the December 13 order.
4
Exxon provided these facts in response to an inquiry from this court directing the parties
to address whether the Ashwood franchise continued to exist and, if not, whether the
appeals of the District Court’s interlocutory orders were moot. See In re Cantwell, 639
F.2d 1050, 1054 n.4 (3d Cir. 1981) (“[F]acts bearing on the issue of mootness can be
raised at any time during the judicial proceedings.”). Ashwood did not respond to the
court’s inquiry. We therefore take the facts to be uncontested.
3
II. Analysis
We have jurisdiction to review orders of the District Court granting or denying a
preliminary injunction under 28 U.S.C. § 1292(a)(1) (2006), but “[w]e do not have
jurisdiction to hear a case that cannot affect the rights the appellant wishes to assert.”
Salovaara v. Jackson Nat'l Life Ins. Co., 246 F.3d 289, 296 (3d Cir. 2001) (per curiam).
“The mootness doctrine is centrally concerned with the court's ability to grant effective
relief.” Cnty. of Morris v. Nationalist Movement, 273 F.3d 527, 533 (3d Cir. 2001). “[I]f
an event occurs while a case is pending on appeal that makes it impossible for the court
to grant any effectual relief whatever to a prevailing party, the appeal must be dismissed
[as moot].” Church of Scientology of California v. United States, 506 U.S. 9, 12 (1992)
(internal quotation marks omitted).
In appealing the partial preliminary injunction, Exxon sought the right to terminate
the Ashwood franchise, and Ashwood sought to prevent termination. The franchise no
longer exists. Even if Exxon had not terminated it, Ashwood’s franchise contract would
have expired in February 2012. Because there is no longer any franchise to terminate or
to save, we cannot grant either party effective relief.
The appeals are accordingly dismissed as moot.5
5
There is no need to vacate the underlying orders, as United States v. Munsingwear, Inc.,
340 U.S. 36, 39-40 (1950), requires of final judgments when appeals become moot. “[I]t
is sufficient to dismiss the appeal without directing that the injunction order be vacated.”
13C Charles A. Wright et al., FEDERAL PRACTICE AND PROCEDURE § 3533.10.3 (3d ed.
2012). Accord Nelson v. Quick Bear Quiver, 546 U.S. 1085, 1085 (2006); Clark v. K-
Mart Corp., 979 F.2d 965, 969 (3d Cir. 1992) (en banc). Although the injunction is
moot, the dispute between the parties remains unresolved. We express no opinion as to
4
whether Ashwood has a viable claim for damages from Exxon, an issue not raised in the
appeal before us.
5