Exxon Dealers Win Round on Station Leases

Angry local Exxon dealers have won a temporary reprieve in their legal battle to keep the oil giant from abandoning the Southern California retail gasoline market.

In an opinion filed Wednesday, the U.S. 9th Circuit Court of Appeals in San Francisco reversed an earlier federal District Court ruling that allowed Exxon Corp. to not renew the franchises of 18 Southern California dealers. Until a lawsuit by the dealers is decided in court, Exxon must continue to supply gasoline and other products to the dealers.

Another group of Exxon dealers, whose leases were to be terminated before their renewal date, won a similar injunction in November to prevent Exxon from canceling their leases.

Last July, 40 of the 156 Southern California Exxon dealers filed a suit after the oil company announced plans to withdraw from the local market. They charged that the company was asking dealers to buy the stations at inflated prices, evading liability for pollution damage at the sites and illegally restraining competition.

That case is expected to go to trial in federal court in Los Angeles in October.

Wednesday’s ruling “will have a substantial impact,” said Joseph M. Alioto, the San Francisco attorney representing the dealers. Exxon dealers whose franchises come up for renewal in the next few months will not have to abandon their businesses before the larger issues of the lawsuit are resolved in court, Alioto said.

An Exxon spokesman said the company had not reviewed the court ruling and had no immediate comment.

Barney Kashani, an Exxon dealer in Van Nuys, was one of those dealers whose franchise was coming up for renewal.

“It’s good for all the dealers, yes, definitely,” Kashani said.