Royal Dutch Shell Plc .com: Judge sides with gas station owner fighting Shell Oil

From San Jose Mercury News
By Ken McLaughlin

Mehdi Shahbazi is losing his home and livelihood because he has been protesting what he calls “gouging” by oil company executives.

More photosMehdi Shahbazi, the feisty Marina gas station owner who is going broke battling Big Oil, has won a round in federal court in San Jose.

U.S. District Court Judge Jeremy Fogel earlier this month denied Shell Oil Co.’s request for a preliminary injunction to force Shahbazi to leave his beloved gas station on Del Monte Boulevard.

The ruling means that the unusual, nationally publicized siege at Marina Shell is bound to continue for the indefinite future.

At issue is whether Shahbazi defamed Shell and thus broke his franchise agreement last fall when he passed out fliers and erected two large signs outside his station attacking Big Oil.

Although he can no longer sell gas because Shell has cut off his fuel supplies, Shahbazi is still operating his mini-mart and car wash — and sympathetic customers are patronizing the station to lend support to his cause.

“I’m going to continue keeping the station open as many hours as I can and go from here,” Shahbazi said. “I wasn’t surprised at the decision. Judge Fogel is a very fair judge.”

Colin West, a San Francisco attorney who is representing Shell in the case, said he wasn’t surprised either because “preliminary injunctions are very hard to get.” But he expressed confidence Shell would win the case on the merits when it comes to trial.

Since November, the pumps at Shahbazi’s station have been surrounded by chain-link fences, which were installed as part of an environmental upgrade project. Shell refused to take down the fences down after the dispute began.

Nine months ago, Shahbazi erected his first sign. It said: “Consumers’ pain is Big Oil’s unearned profit! To oppose it see cashier.”

Once inside the mini-mart, customers were handed a flier accusing oil companies of trying to drive franchisee retailers like himself out of business by selling gas for less at company-owned stations. Shahbazi, an Iranian immigrant who has sold gas for 37 years, claimed that the companies’ long-term goal is to control the market and jack up prices even more.

Shell, which dismisses Shahbazi’s arguments as nonsense, was not amused by the signs and began taking action against Shahbazi in early November, after he erected a second sign attacking Big Oil. Shell’s distributor told him to either take down the signs or have his gasoline supplies cut off. Believing his free speech rights were being infringed, Shahbazi ignored the distributor.

The distributor terminated his agreement with Shahbazi in late November, and Shell terminated the lease. The company says he is now illegally occupying the Shell-owned property.

In his ruling, Fogel noted that a party seeking a preliminary injunction must demonstrate a likelihood of success on the merits and the possibility of “irreparable injury.”

But Fogel said it was unclear whether Shell would succeed on the merits. One reason, he said, is that Shell did not give Shahbazi the required 90-day notice to end the franchise agreement.

Moreover, Fogel said, Shell “has not demonstrated the possibility of irreparable injury” if the injunction wasn’t issued.

“In comparison,” he wrote, “Shahbazi has demonstrated that he could suffer irreparable injury if the court granted the instant motion for a preliminary injunction.”

The request for the injunction was argued in Fogel’s courtroom in February.

Contact Ken McLaughlin at kmclaughlin@mercury news.com or (831) 423-3115.

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