EXXON CORP. V. GOVERNOR OF MARYLAND 437 U.S. 117 (1978) CASE BRIEF

EXXON CORP. V. GOVERNOR OF MARYLAND

437 U.S. 117 (1978)

NATURE OF THE CASE: This is an appeal of a ruling upholding a state petroleum retailing statute, challenging that ruling on grounds that the statute placed an unconstitutional burden on interstate commerce.

FACTS: A Maryland statute provides that a producer or refiner of petroleum products (1) may not operate any retail service station within the State, and (2) must extend all 'voluntary allowances' uniformly to all service stations it supplies. Exxon Corp. filed a declaratory judgment action challenging the statute. All of the gasoline sold by Exxon in Maryland is transported into the State from refineries located elsewhere. Although Exxon sells the bulk of this gas to wholesalers and independent retailers, it also sells directly to the consuming public through 36 company-operated stations. The three other plaintiffs, like Exxon, sell major brands primarily through dealer-operated stations, although they also operate at least one retail station each. They, too, challenged the statute's divestiture provisions, but, in addition, they specially challenged the requirement that 'voluntary allowances' be extended uniformly to all retail service stations supplied in the State. Although not defined in the statute, the term 'voluntary allowances' refers to temporary price reductions granted by the oil companies to independent dealers who are injured by local competitive price reductions of competing retailers. In advance of trial, Exxon, Shell, and Gulf moved for a partial summary judgment declaring this portion of the Act invalid as in conflict with 2(b). The Circuit Court granted the motion, and the trial then focused on the validity of the divestiture provisions. No petroleum products are produced or refined in Maryland, and the number of stations actually operated by a refiner or an affiliate is relatively small, representing about 6% of the total number of Maryland retailers. After trial, the Circuit Court held the entire statute invalid, primarily on substantive due process grounds. The Maryland Court of Appeals reversed, rejecting all of the refiners' attacks against both the divestiture provisions and the voluntary allowance provision. Appellants have focused their appeals on the claims that the Maryland statute violates the Due Process and Commerce Clauses, and that it is in conflict with the Robinson-Patman Act.

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