Circuit Judge José Cabranes
Lehigh’s appeal of the award of damages to Jimico Enterprises and Brownson Enterprises under the Petroleum Marketing Practices Act (PMPA) raised the issue of whether a franchisor may be held liable under the PMPA for failing to provide notice to a "trial franchisee" prior to terminating its franchise. The subject contracts covering plaintiffs’ five gas stations were properly found "trial franchises" under the PMPA because neither plaintiff held prior franchises with Lehigh and the contracts, initially for a period less than one year, stated they were "trial franchises." Affirming district court’s Oct. 14, 2011, amended judgment awarding plaintiffs $171,892 in compensatory and punitive damages, Second Circuit held that a trial franchisee holds a right of action under PMPA §2805 against a franchisor who terminates its franchise without proper notice as set forth in §2804. Section 2803 does not exempt franchisors who terminate trial franchises from complying with the requirements of §2802, which explicitly incorporates §2804′s notice requirements. Thus the requirements of §2802 prohibiting franchisors from "terminat[ing] any franchise" without complying with the notice requirements of §2804, apply to the termination of trial franchises.
