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BP gas station doesn't qualify for Maryland's Four Cent Rule because of agreement with wholesaler

Lawsuits

By Charmaine Little | Jan 11, 2019


ANNAPOLIS, Md. (Legal Newsline) – Thanks to a branded jobber contract, a man selling BP gasoline at a service station isn’t entitled to the Four Cent Rule, the Court of Special Appeals of Maryland held on Jan. 2.

The court affirmed the decision of Circuit Court for Howard County that granted summary judgment in favor of motor fuel supplier Carroll Independent Fuel LLC.

Judge Charles E. Moylan Jr. authored the opinion. Judges Andrea Leahy and Douglas M. Nazarian were also involved in the ruling.

Khalid Azam, who owns a retail gas service station called Liberty BP, sued his BP-branded motor fuel supplier, Carroll Independent Fuel LLC (CIF), stating he was entitled to the Four Cent Rule. This would give Liberty BP gasoline wholesale prices that are at minimum four-cents-per-gallon under the lowest price posted for each type of gasoline. CIF was granted summary judgment in the Circuit Court for Howard County in the suit.

The appeals court ruled the Four Cent Rule does not apply to a branded jobbers contract, which is the agreement CIF is under when it purchases the gasoline from BP Products North America Inc. 

The appeals court pointed out that the terms of the Four Cent Rule do not include independent jobbers and farm cooperatives. An independent jobber is defined as a person or business that buys gasoline products from a wholesaler for resale to a dealer (i.e. CIF’s agreement with Liberty BP), the opinion states.

The opinon also noted that because CIF buys under the branded jobber contract, CIF doesn’t have permission to use BP’s trademarks or allow the service stations it sells to use it without written authorization from BP. Even then, those stations and CIF would have to follow strict requirements.

Since CIF sells it to Liberty under the dealer supply agreement, Liberty has permission to use BP’s trade names, trademarks, service marks, logos, brand names, trade dress, design schemes, insignia, color schemes and anything related to promoting and selling the BP brand. CIF is the party that determines the price per gallon for the fuel it sells to Liberty.

Azam sued for injunctive relief, requesting an order that CIF has to sell to Azam using the Four Cent Rule, and appealed when CIF was granted summary judgment.  

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