N.Y. General Business Law § 199-j: Dealer's right to deal with suppliers other than his distributor

§ 199-j. Dealer's right to deal with suppliers other than his

distributor. 1. Any provision of a franchise which requires a dealer to

purchase or sell products of the distributor other than motor fuel, or

which prohibits a dealer from purchasing or selling such products of

persons or firms other than the distributor, shall be null and void. Any

person or firm who is a distributor, or an officer, agent or employee of

a distributor, who shall threaten, harass, coerce or attempt to coerce a

dealer for the purpose of compelling the dealer to purchase or sell such

products of the distributor or to refrain from purchasing or selling

such products of persons or firms other than the distributor shall be

guilty of a violation and shall be subject to a fine in an amount up to

five hundred dollars for each violation.

2. (a) Any provision of a franchise which prohibits a dealer from

purchasing or selling any of the alternative motor fuels set forth in

paragraph (b) of this subdivision from a person or firm other than the

distributor, or limits the quantity of such motor fuel to be purchased

from such other person or firm, or any provision of a franchise which

directly or indirectly discourages a dealer from purchasing or selling

such alternative motor fuels from such other person or firm, shall be

null and void as it pertains to that particular alternative motor fuel

if the distributor does not supply or offer to supply to the dealer such

alternative motor fuel. Nothing contained in this paragraph, however,

shall grant to any dealer any rights, authority or obligation with

respect to the permissible uses of the premises or facilities owned,

leased or controlled by a distributor pursuant to the terms of the

franchise.

(b) For the purposes of this section, the term "alternative motor

fuel" shall mean any of the following: (i) a blend of eighty-five

percent ethanol and fifteen percent gasoline; (ii) a blend of at least

two percent methyl-ester, commonly referred to as "bio-diesel", and

diesel motor fuel; (iii) motor fuel comprised primarily of methane,

stored in either a gaseous or liquid state and suitable for use and

consumption in the engine of a motor vehicle, commonly referred to as

"compressed natural gas"; or (iv) hydrogen.

(c) Any person or firm who is a distributor, or an officer, agent or

employee of a distributor, who threatens, harasses, coerces or attempts

to coerce a dealer for the purpose of compelling such dealer to refrain

from purchasing or selling alternative motor fuel from a person or firm

other than the distributor shall be guilty of a violation and be subject

to a fine in an amount up to one thousand dollars for each violation.

3. Franchise provisions. Any provision of a franchise with a refiner

which prohibits a dealer, who either directly or through an affiliate

owns a service station including the tanks and pumps and who dedicates a

tank for sale of unbranded motor fuel, or a distributor from purchasing

or selling unbranded motor fuel from a person or firm other than the

refiner or limits the quantity of such unbranded motor fuel to be

purchased from another person or firm or any provision of a franchise

which directly or indirectly discourages a dealer or distributor from

purchasing or selling such unbranded motor fuels from another person or

firm, shall be null and void. For purposes of this subdivision and

subdivisions four, five and six of this section the following terms

shall have the following meanings:

(a) "refiner" means any person, firm or corporation who owns, leases,

operates, controls or supervises a commercial entity producing gasoline

or diesel motor fuel;

(b) "distributor" means any person other than a refiner or dealer who

purchases motor fuel at a terminal facility and supplies motor fuel to

service stations; and

(c) "unbranded motor fuel" means motor fuel which does not use a

trademark, trade name, service mark, or other identifying symbol or name

owned by a refiner.

4. Labeling of unbranded motor fuels. Under any circumstances where a

dealer sells unbranded motor fuel, the dealer shall display a sign which

will be visible to consumers before entering the station which states

that unbranded fuel is available for sale. The dealer shall also post a

sign disclosing that such supply is unbranded on each pump dispensing

this fuel. The sign shall be at least eight inches by ten inches with

letters not less than three inches in height. The sign shall be legible

to the consumer from any point where a vehicle may be refueled. The

dealer shall cover all logos, trademarks, or other identifying insignia

of the refiner on each dispenser used to dispense the product from such

tank or pump. The dealer shall not be required to deface or cover any

other logo, trademark, or insignia at his place of business.

5. Sale of unbranded product. A dealer who is entitled to sell

unbranded product shall have the right to mix in any storage tank motor

fuel produced or supplied by two or more refiners, including his or her

refiner, as long as such mixture is stored separately from the refiner's

supply and is sold as unbranded. A dealer who is entitled to sell

unbranded product shall have the right to mix motor fuel purchased from

a source other than his or her refiner without regard to whether said

motor fuel was sold under or carries any brand, trademark, tradename, or

other similar designation. A dealer shall retail such a mixture as

"unbranded", "no brand", or other similar designation indicating that

the motor fuel does not carry a brand, trademark, tradename, or other

similar designation. A franchisee who markets such a mixture shall be

subject to the posting and labeling requirements of this article and

article sixteen of the agriculture and markets law. Any violation of

section one hundred ninety-two-b of the agriculture and markets law by a

dealer in regards to the marketing of unbranded fuel under this section

shall not be deemed a violation of the refiner under subdivision six of

such section.

6. Sale of refiner's product. A dealer who has sold motor fuel other

than that of the refiner by dispensing such motor fuel from a storage

tank, underground or otherwise, or container or receptacle, shall follow

the procedures set forth in this section before using such storage tank,

container, or receptacle for dispensing the branded motor fuel of the

refiner. Before using such tank to dispense the refiner's fuel, the

dealer shall first empty the tank. The dealer may then use such tank to

dispense motor fuel represented to be the product of such refiner. With

respect to retail gasoline stations, the term "empty the tank" as used

in this section means that the pump, dispenser, device, or other

equipment normally used to dispense or pump motor fuel from the storage

tank into a motor vehicle has reduced the fluid level in the storage

tank to the point where any additional special equipment, such as a

vacuum pump, would be necessary to draw out the remaining residue of

motor fuel in the tank. The refiner, or his or her employee or agent,

shall have the right to inspect the tank to ensure that it is empty in

accordance with this section and that the labeling requirements of this

section are met.