This litigation involves a dispute between Shell Oil Company (Shell), a petroleum franchisor, and several Shell franchisees in Massachusetts.

Pursuant to their franchise agreements with Shell, each franchisee was required to pay Shell monthly rent for use of the service-station premises. For many years, Shell offered the franchisees a rent subsidy that reduced the monthly rent by a set amount for every gallon of motor fuel a franchisee sold above a specifi ed threshold.

Shell renewed the subsidy annually through notices that “explicitly provided for cancellation [of the rent subsidy] with thirty days’ notice.”

Nonetheless, Shell representatives made various oral representations to the franchisees “that the subsidy or something like it would always exist.”

In 1998, Shell joined with two other oil companies to create Motiva Enterprises LLC (Motiva), a joint venture that combined the companies’

petroleum-marketing operations in the eastern United States. Shell assigned to Motiva its rights and obligations under the relevant franchise agreements. * * * Effective January 1, 2000, Motiva ended the volume-based rent subsidy, thus increasing the franchisees’ rent.

In July 2001, sixty-three Shell franchisees (hereinafter dealers)

fi led suit against Shell and Motiva in Federal District Court. Their complaint alleged that Motiva’s discontinuation of the rent subsidy constituted a breach of contract under state law. Additionally, the dealers asserted [a claim] under the PMPA [Petroleum Marketing Practices Act]. * * * They maintained that Shell and Motiva, by eliminating the rent subsidy, had

“constructively terminated” their franchises in violation of the Act.

After a two-week trial involving eight of the dealers, the jury found against Shell and Motiva on all claims. Both before and after the jury’s verdict, Shell and Motiva moved for judgment as a matter of law on the dealers’ [PMPA claim].

They argued that they could not be found liable for constructive termination under the Act because none of the dealers had abandoned their franchises in response to Motiva’s elimination of the rent subsidy—

something Shell and Motiva said was a necessary element of any constructive termination claim.

* * * The District Court denied

[the motion], and Shell and Motiva appealed. [The U.S. Court of Appeals for the First Circuit affi rmed the district court’s judgment, and Shell and Motiva appealed to the United States Supreme Court.]

* * * *

The * * * question we are asked to decide is whether a service-station franchisee may recover for constructive termination under the PMPA when the franchisor’s allegedly wrongful conduct did not force the franchisee to abandon its franchise.

For the reasons that follow, we conclude that a necessary element of any constructive termination claim under the Act is that the franchisor’s conduct forced an end to the franchisee’s use of the franchisor’s trademark, purchase of the franchisor’s fuel, or occupation of the franchisor’s service station.

[Emphasis added.]

When given its ordinary meaning, the text of the PMPA prohibits only that franchisor conduct that has the effect of ending a franchise.

As relevant here, the Act provides that “no franchisor * * * may

* * * terminate any franchise,”

except for an enumerated reason and after providing written notice.

The word “terminate” ordinarily means “put an end to.” * * *

The object of the verb “terminate”

is the noun “franchise,” a term the Act defi nes as “any contract”

for the provision of one (or more)

of the three elements of a typical petroleum franchise. Thus, when given its ordinary meaning, the Act is violated only if an agreement for the use of a trademark, purchase of motor fuel, or lease of a premises is

“put [to] an end” * * * . Conduct that does not force an end to the franchise, in contrast, is not prohibited by the Act’s plain terms.

* * * *

Requiring franchisees to abandon their franchises before claiming constructive termination is also consistent with the general understanding of the doctrine of constructive termination. As applied in analogous legal contexts—both now and at the time Congress enacted the PMPA—a plaintiff must actually sever a particular legal relationship in order to maintain a claim for constructive termination. For example, courts have long recognized a theory of constructive discharge in the fi eld of employment law. Similarly, landlordtenant law has long recognized the concept of constructive eviction.

The general rule under that doctrine is that a tenant must actually move out in order to claim constructive eviction. [Emphasis added.]

As generally understood in these and other contexts, a termination is deemed “constructive” because it is the plaintiff, rather than the defendant, who formally puts an end to the particular legal relationship—

not because there is no end to the relationship at all. There is no reason why a different understanding should apply to constructive termination claims under the PMPA.

At the time when it enacted the statute, Congress presumably was aware of how courts applied the doctrine of constructive termination in these analogous legal contexts. And in the absence of any contrary evidence, we think it reasonable to interpret the Act in a way that is consistent with this well-established body of law.

* * * *

We therefore hold that a necessary element of any constructive termination claim under the PMPA is that the complained-of conduct forced an end to the franchisee’s use of the franchisor’s trademark, purchase of the franchisor’s fuel, or occupation of the franchisor’s service station. Because none of the dealers in this litigation abandoned any element of their franchise operations in response to Motiva’s elimination of the rent subsidy, they cannot maintain a constructive termination claim on the basis of that conduct.

* * * *

The judgment of the Court of Appeals is reversed * * * . The cases are remanded for further proceedings consistent with this opinion.

It is so ordered.

Questions:-

1. The PMPA regulates only the circumstances in which service-station franchisors may terminate a franchise or decline to renew a franchise relationship. Are there any reasons why Congress might have limited the scope of the PMPA to just these two aspects of franchising? Explain.

2. Suppose that some of the service-station franchisees, on the expiration of their contracts with Shell, signed a renewal agreement with Motiva, even though the franchisees believed that the rental terms of the new agreement were unacceptable. Given the Court’s reasoning on the issue of constructive termination, would the franchisees have been likely to succeed in a suit against the franchisor for “constructive nonrenewal” of the franchise agreement?
Why or why not?