Appendix I | 
Table of Contents |
CHAPTER 486H, HAWAII REVISED STATUTES
GASOLINE DEALERS
Section
486H-1 Definitions
486H-2 Wrongful or illegal termination; unreasonable
nonrenewal; damages; defenses
486H-3 Notice of termination, cancellation, or nonrenewal
486H-4 Exceptions
486H-5 Gasoline dealer's rights
486H-6 Petroleum distributor's penalty; collection
486H-7 Right to sue
486H-8 Disposition of inventory
486H-9 Rights of dealer family member
486H-10 Prohibition of manufacturer or jobber from operating a
service station
486H-10.5 Violation; penalties
486H-11 Enforcement of prohibition
486H-12 Preemption by federal law
§486H-1 Definitions. As used in this chapter:
"Franchise" means:
(1) Any agreement or related agreements between a petroleum
distributor and a gasoline dealer under which the
gasoline dealer is granted the right to use a
trademark, trade name, service mark, or other
identifying symbol or name owned by the distributor in
connection with the retail sale of petroleum products
supplied by the petroleum distributor; or
(2) Any agreement or related agreements described in
paragraph (1) and any agreement between a petroleum
distributor and a gasoline dealer under which the
gasoline dealer is granted the right to occupy the
premises owned, leased, or controlled by the
distributor, for the purpose of engaging in the retail
sale of petroleum products supplied by the distributor.
"Gasoline" includes gasoline, benzol, benzine, naphtha, and
any other liquid prepared, advertised, offered for sale,
sold for use as, or used for, the generation of power for
the propulsion of motor vehicles, including any product
obtained by blending together any one or more petroleum
products with or without other products, if the resultant
product is capable of the same use.
"Gasoline dealer" means any person engaged in the retail
sale of petroleum products in the United States under a
franchise agreement entered into with a petroleum
distributor.
"Good faith" means the duty of a gasoline dealer and a
petroleum distributor to act in a fair and equitable manner
in the performance and in the demanding of performance of
the terms and provisions of the franchise. The petroleum
distributor shall not impose on a gasoline dealer by
contract, rule, or regulation, whether written or oral, any
standard of conduct that is not reasonable and of material
significance to the franchise relationship.
"Inventory" means any product sold to a gasoline dealer for
resale purposes by a petroleum distributor.
"Jobber" means every wholesaler of petroleum products.
"Major brand" means the primary trade name or trademark most
commonly associated and identified with a manufacturer's
retail service station.
"Manufacturer" means every producer or refiner of petroleum
products on January 1, 1992, or any subsidiary of that
producer or refiner.
"Motor vehicle fuel" means gasoline, diesel fuel, alcohol,
and any mixture of those fuels suitable for use in vehicles
registered under chapter 286.
"Petroleum distributor" means any person engaged in the
sale, consignment, or distribution of petroleum products to
retail outlets that it owns, leases, or otherwise controls.
"Petroleum products" includes motor vehicle fuel, residual
oils number 4, 5, and 6, and all grades of jet (turbo) fuel.
"Purchase" means any acquisition of ownership.
"Retail" means the sale of a product for purposes other than
resale.
"Retail service station" means a place of business where
motor vehicle fuel is sold and delivered into the tanks of
motor vehicles.
"Sale" means any exchange, gift, or other disposition.
"Secondary brand" means a trade name or trademark, other
than a major brand, used to identify a manufacturer's retail
service station.
"Unbranded" means an independent retail service station
dealer, jobber, heating oil distributor, motor fuel
wholesaler, or peddler marketing gasoline or special fuels
under its own brand, trade name, or trademark, other than
those of a manufacturer, or any subsidiary thereof.
[§486H-2] Wrongful or illegal termination; unreasonable nonrenewal;
damages; defenses. (a) Except as provided in section 486H-3, a
petroleum distributor shall be liable to a gasoline dealer who sells
the products of the petroleum distributor under a franchise from the
distributor for damages and such equitable relief as the court deems
proper resulting from the wrongful or illegal termination or
cancellation of the franchise during its term or the petroleum
distributor's unreasonable refusal to renew the franchise.
(b) A gasoline dealer suffering damages as a result of the
termination or cancellation of, or failure to renew, the dealer's
franchise may bring an action under this section against the petroleum
distributor who wrongfully or illegally terminated, canceled, or
unreasonably refused to renew the dealer's franchise in the court of
general jurisdiction in which such petroleum distributor has the
distributor's principal place of business, is found, or has an agent.
The action may be brought without regard to the amount in controversy.
If the gasoline dealer prevails in the action, the dealer may recover
actual damages sustained, the costs of the suit, including reasonable
attorneys' fees, and such equitable relief as the court deems proper.
The court may also grant such temporary relief as it may deem
necessary and proper.
(c) It shall be a defense to any action brought under this section
that the franchise was terminated, canceled, or not renewed because:
(1) The gasoline dealer failed to comply substantially with
essential and reasonable requirements of the franchise
agreement;
(2) The gasoline dealer failed to act in good faith in
carrying out the terms and provisions of the franchise; or
(3) Of any of the reasons enumerated in section 486H-3; or
(4) Of other legitimate business reasons; provided that a
termination, cancellation, or failure to renew a
franchise for the purpose of enabling the petroleum
distributor to assume operation of the gasoline
dealer's business shall not be considered to be a
legitimate business reason unless the gasoline dealer
is paid reasonable compensation for the value of the
dealer's franchise, including good will.
(d) No action may be brought under this section for a cause of action
which arose more than two years prior to the date on which the action
is brought.
§486H-3 Notice of termination, cancellation, or nonrenewal. A
petroleum distributor shall not terminate, cancel, or refuse to renew a
franchise with a gasoline dealer without first giving the dealer
written notice by certified mail at least ninety days in advance of the
effective date of such action as set forth in the notice.
Notwithstanding any provision to the contrary contained in this
section, a petroleum distributor may terminate, cancel, or refuse to
renew a franchise with a gasoline dealer effective five days after the
posting of written notice by certified mail to the gasoline dealer at
the dealer's last known address, if such action is based on any of the
following reasons:
(1) Citation of the gasoline dealer by the division of
measurement standards for adulteration, substitution,
contamination, or other degradation of petroleum
products sold under the trademark of the petroleum
distributor; provided such adulteration, substitution,
contamination, or other degradation is caused by the
wilful or negligent act of the gasoline dealer;
(2) Voluntary abandonment of the franchise relationship by
the gasoline dealer;
(3) Conviction of the gasoline dealer of a crime involving
the business conducted pursuant to the franchise; or
(4) Adjudication of bankruptcy of the gasoline dealer, or
the dealer's becoming insolvent in the sense that the
dealer cannot meet the dealer's financial obligations
when due.
[§486H-4] Exceptions. No action may be brought under section 486H-2
in connection with the termination, cancellation, or nonrenewal of a
franchise if the franchise agreement provides for the binding
arbitration of disputes arising under the agreement, including disputes
related to the termination, cancellation, or nonrenewal of the
franchise, in accordance with the rules of the American Arbitration
Association.
§486H-5 Gasoline dealer's rights. (a) A petroleum distributor
shall not in any way dictate, force, or attempt to set the retail price
of any product sold by the gasoline dealer.
(b) After June 7, 1976, it shall be illegal for any petroleum
distributor by any action to require a gasoline dealer to purchase only
those tires, batteries, and other automotive accessories sold by the
distributor. A gasoline dealer may sell any tires, batteries, and
other automotive accessories as may be available to the dealer for
retail sale.
(c) The petroleum distributor shall at all times act in good faith
in carrying out the terms and provisions of the franchise.
§486H-6 Petroleum distributor's penalty; collection. The petroleum
distributor's executive officer, representative, or agent who
negotiates any contract in violation of section 486H-5(a) and section
486H-5(b), or who otherwise coerces a gasoline dealer in violation of
section 486H-5(a) and section 486H-5(b), shall in addition to other
penalties provided by this chapter be subject to a civil penalty of up
to $50,000 for each offense.
The penalty shall be assessed and recovered in a civil action brought
by the attorney general or by any county attorney or prosecuting
attorney in any court of competent jurisdiction. If brought by a county
attorney or prosecuting attorney, the entire amount of the penalty
shall be paid to the general fund of the county in which the judgment
was entered. If brought by the attorney general, one-half of the
penalty shall be paid to the county general fund where the action was
brought and one-half shall be paid to the State general fund.
[§486H-7] Right to sue. Any person who is injured in the person's
business or property by reason of a violation of section 486H-5 may sue
in any court having jurisdiction in the county where the defendant
resides or is found, or where any agent of the defendant resides or is
found, or where service may be obtained, without respect to the amount
in controversy, to recover the damages sustained by the person, and the
person shall be awarded, if judgment is rendered in the person's favor,
attorney's fees together with the costs of the suit. Any action
brought pursuant to this section shall be commenced within four years
after the cause of action accrued.
[§486H-8] Disposition of inventory. Upon termination of a franchise
by either the petroleum distributor or the gasoline dealer, whether or
not for cause, the distributor shall at the request of the dealer, take
back any inventory from the dealer which was supplied by it and which
has not diminished substantially in value and is of similar quality as
when originally supplied. The petroleum distributor shall reimburse
the gasoline dealer for not less than ninety per cent of the cost paid
by the gasoline dealer or shall cancel not less than ninety per cent of
any debts owed on account of the inventory.
[§486H-9] Rights of dealer family member. (a) Upon the death of
a gasoline dealer, the franchise of said dealer and any leases or other
agreements in connection therewith may be assumed by any dealer family
member, who has actively participated in the franchise during the
twelve month period immediately preceding the dealer's death (but not
necessarily continuously throughout such period), who meets the
qualifications necessary to operate the station which would be
customarily required by the petroleum distributor in question, and who
gives written notice of the dealer family member's election to assume
the franchise, and any leases or other agreements in connection
therewith, to the petroleum distributor and any lessors of the premises
within thirty days of the death of the gasoline dealer and affirms the
same in writing within fifteen days after such thirty day period.
(b) Any dealer family member who is entitled to give the notice
under subsection (a) shall have the right to operate the franchise
during the forty-five day period provided for in subsection (a).
(c) "Dealer family member" shall mean that person from the group
consisting of the surviving spouse and surviving adult children of the
dealer designated by the dealer in a written designation received by
the petroleum distributor prior to the dealer's death, provided that in
the absence of any written designation, the dealer family member shall
be that one of the dealer's surviving spouse and the dealer's surviving
adult children who is entitled to give and gives the notice provided
for in subsection (a) and who is chosen by said group. If said group
does not choose the dealer family member within forty-five days after
the dealer's death, then the petroleum distributor shall have the
option of choosing the dealer family member from among those who were
entitled to give and give notice of their election to assume the
franchise, any leases or other agreements in accordance with subsection
(a).
§486H-10 Prohibition of manufacturer or jobber from operating a
service station. (a) From July 31, 1993, to August 1, 1997, no
manufacturer or jobber shall operate a major brand, secondary brand, or
unbranded retail service station in Hawaii to sell its petroleum
products; provided that for each dealer operated retail service station
owned by a manufacturer or jobber opened on or after July 31, 1995,
that manufacturer or jobber may open one company operated retail
service station, up to a maximum of two company owned retail service
stations.
For purposes of this subsection:
"Company operated retail service station" means a retail service
station owned and operated by a manufacturer or jobber.
"Dealer operated retail service station" means a retail service
station owned by a manufacturer or jobber and operated by a qualified
gasoline dealer.
(b) For the purposes of this section, the term "to operate" means
to engage in the business of selling motor vehicle fuel at a retail
service station through any employee, commissioned agent, subsidiary
company, or person managing a retail service station under a contract
and on a fee arrangement with the manufacturer or jobber.
(c) This section shall not apply to any individual locations
operated by any manufacturer or jobber on the effective date of this
Act. Nor shall anything contained in this section prohibit a
manufacturer or jobber from acquiring or constructing replacement
retail service stations to replace any company- operated retail service
stations in existence on July 30, 1993, that have subsequently closed
due to the expiration or termination of the retail service station's
ground lease; provided that:
(1) The manufacturer or jobber shall negotiate in good
faith to renew the ground lease of the retail service
stations; and
(2) The replacement retail service stations shall be
located within a one-mile radius of the retail service
stations that they replace.
As used in this subsection, "good faith" means an honest and sincere
intention to renew the ground lease of retail service stations.
[§486H-10.5] Violation; penalties. Any person who violates section
486H-10 shall be assessed a civil penalty of $1,000 per day for each
violation.
[§486H-11] Enforcement of prohibition. (a) The attorney general
shall commence a civil action to enforce section 486H-10, by seeking
injunctive or any other appropriate relief. The civil action shall be
brought in the circuit court of the circuit where the alleged violation
occurred, or where the defendant resides or is doing business.
(b) Any person who is injured in another person's business or
property by the violation of section 486H-10, may bring a civil action
for damages or injunctive relief, or both, against the person violating
section 486H-10. If the plaintiff prevails, the plaintiff shall be
awarded reasonable attorneys and expert witness fees; provided that if
a court awards only nominal damages to the plaintiff, those fees, in
the court's discretion, need not be awarded to the plaintiff. Any
action brought under this subsection shall be brought in the circuit
court of the circuit where the alleged violation occurred, or where the
defendant resides or is doing business.
[§486H-12] Preemption by federal law. This chapter shall not be
applied in a manner that would render its application preempted by the
"Petroleum Marketing Practices Act", 15 U.S.C. Sec. 2801, et. seq., or
other applicable federal law.
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