Tom-Lin Enterprises, Inc. v. Sunoco, Inc. (r&m)

*The Honorable Robert H. Cleland, United States District Judge for
the Eastern District of Michigan, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2003 FED App. 0399P (6th Cir.)
File Name: 03a0399p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
TOM-LIN ENTERPRISES, INC.,
et al.,
Plaintiffs-Appellants,
v.
SUNOCO, INC. (R&M),
Defendant-Appellee.
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No. 01-4326
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 00-00452—Terence P. Kemp, Magistrate Judge.
Argued: May 1, 2003
Decided and Filed: November 12, 2003
Before: CLAY and GIBBONS, Circuit Judges;
CLELAND, District Judge.*
2 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
_________________
COUNSEL
ARGUED: Brian K. Murphy, MURRAY, MURPHY,
MOUL & BASIL, Columbus, Ohio, for Appellants. A.
Christopher Young, PEPPER, HAMILTON, Philadelphia,
Pennsylvania, for Appellee. ON BRIEF: Brian K. Murphy,
MURRAY, MURPHY, MOUL & BASIL, Columbus, Ohio,
for Appellants. A. Christopher Young, PEPPER,
HAMILTON, Philadelphia, Pennsylvania, Sandra J.
Anderson, VORYS, SATER, SEYMOUR & PEASE,
Columbus, Ohio, for Appellee.
_________________
OPINION
_________________
CLAY, Circuit Judge. Plaintiffs, Tom-Lin Enterprises,
Inc., et al., appeal from the district court’s order entered on
November 9, 2001, granting summary judgment in favor of
Defendant, Sunoco, Inc. (R&M) (“Sunoco”), on Plaintiffs’
complaint for breach of contract, breach of the implied
covenant of good faith and fair dealing and violation of open
price term obligations codified in Ohio Rev. Code Ann.
§ 1302.18. For the reasons set forth below, we AFFIRM the
district court’s order.
BACKGROUND
Procedural History
Plaintiffs are twelve individual businesses and business
persons who operate gasoline service station facilities which
they either own or lease from Sunoco. Each Plaintiff sells
Sunoco-branded gasoline to the motoring public in Central
Ohio. Plaintiffs allege that, since 1995, Sunoco has violated

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No. 01-4326 Tom-Lin Enterprises, et al.
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Ohio Rev. Code Ann. § 1302.18 by charging them
excessively high prices for its gasoline. Plaintiffs filed their
complaint on March 10, 2000 in the Franklin County Court of
Common Pleas in Ohio. Sunoco removed the case to the
district court on April 17, 2000, based on diversity
jurisdiction. On July 14, 2000, Plaintiffs filed an amended
complaint to state Sunoco’s proper name.
At the close of extensive discovery, which resulted in the
production of thousands of documents and 45 depositions,
Sunoco moved for summary judgment on all three counts of
Plaintiffs’ complaint. Plaintiffs did not contest Sunoco’s
asserted grounds for summary judgment on the claims for
breach of contract and breach of the implied covenant of good
faith and fair dealing. By order entered on November 9,
2001, the district court dismissed Plaintiffs’ complaint.
Plaintiffs timely filed a notice of appeal on December 7,
2001. They take issue only with the district court’s dismissal
of their claim alleging a violation of Sunoco’s open price term
obligations codified in Ohio Rev. Code Ann. § 1302.18.
Facts
A. Plaintiffs’ Business Operations
With two exceptions, each Plaintiff operates a single
gasoline service station facility in Central Ohio which is
either owned or leased from Sunoco; two Plaintiffs operate
two Sunoco service stations. Each Plaintiff is a party to a
Dealer Franchise Agreement (“DFA”), which sets forth the
terms of its relationship with Sunoco. The DFAs are
substantially the same in that they contain similar or identical
terms regarding the price Sunoco will charge for its gasoline.
Most Plaintiffs own or control the real property on which
their service stations are located and, therefore, are able to
switch gasoline suppliers upon the expiration of their DFAs.
In the Columbus, Ohio area, major refiners like Shell, British
4 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
Petroleum (“BP”), Marathon and Citgo compete with each
other to sign new accounts for the operation of their gasoline
service stations with individuals who own or control their real
property.
Sunoco provides certain financial incentives to encourage
such individuals to maintain the Sunoco “flag” at their
stations. First, Sunoco provides a lump-sum cash payment to
be used for improvements or enhancements to the property.
Ten of twelve Plaintiffs have received between $50,000 and
$75,000 for signing their DFAs. In total, Sunoco has
committed to pay these Plaintiffs over $1,000,000 in lump-
sum payments since 1995. Second, Sunoco provides these
Plaintiffs with “running consideration,” which are cents-per-
gallon credits earned by purchasing negotiated threshold
amounts of gasoline from Sunoco; these credits apply to
future purchases of gasoline from Sunoco. Third, Sunoco
operates a Volume Improvement Program (“VIP”), a rebate
program which rewards dealers who purchase a certain
amount of gasoline with cents-per-gallon credits against
subsequent purchases. The VIP applies to all Plaintiffs,
regardless of whether they own or control their real property.
All but one of the plaintiffs who own or control their real
property have renewed their DFAs with Sunoco since 1995.
During the pendency of this litigation four Plaintiffs have had
the opportunity to switch gasoline suppliers, but have signed
new DFAs with Sunoco.
B. Sunoco’s Retail Operations and Pricing System in
Central Ohio
Sunoco is a refiner and marketer of petroleum products
headquartered in Philadelphia, Pennsylvania. Like its
principal competition (BP, Shell and Marathon), Sunoco
markets and distributes its gasoline in Central Ohio in three
ways: (1) directly at company-operated stations; (2) through
use of a jobber – a person or corporation who purchases

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No. 01-4326 Tom-Lin Enterprises, et al.
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1Sunoco sells primarily two grades of gasoline, namely 86 and 94
octane, which are blended at the retail pumps to obtain additional interim
grades. In its direct sales to retail dealers, Sunoco maintains a price per
gallon spread between the 86 octane and the 94 octane of 15 ½ cents over
the DTW price. In its gasoline sales to jobbers, Sunoco strives to
maintains a set spread between 86 octane and 94 o ctane of 11 ½ ce nts
over the rack price; the actual p rice spread over the rack price is
determined based on the spread between Sunoco’s comp etitors’ lower and
higher grade products as reflected in the OP IS repo rts.
gasoline directly from Sunoco and/or other refiners at what is
called the “rack” price and transports the gasoline to one or
more retail outlets, either with its own equipment or through
a subcontractor; or (3) through independent retailers known
as dealers. All of the plaintiffs fall into the third category.
The independent retailers pay a different price for gasoline
than the jobber – the “Dealer Tank Wagon” or “DTW” price.
Sunoco is a pricing follower in Central Ohio, whereas BP
and Marathon are the pricing leaders. This means that
Sunoco’s pricing strategy is to follow the lead of BP and
Marathon. Sunoco attempts to set its rack and DTW prices in
such a way that it is neither the highest-priced nor the least
expensive supplier in the market.
Sunoco sets both its rack and DTW prices on a daily basis.
Its rack price is based upon a “market basket” of pricing
information all of which relates to other major refiners’ rack
prices. Sunoco subscribes to the Oil Pricing Information
Service (“OPIS”) in order to determine the jobber rack prices
of its competitors. Sunoco sets its rack price somewhere in
the middle of the rack prices being charged by its competitors.
Sunoco sets its DTW price based on a survey of what other
major competitors are charging at their retail stations in each
of Sunoco’s “pricing zones.” Sunoco then reduces that
average retail price by a six to nine-cent margin, which is
subject to change depending upon changes in prices in the
relevant area.1 The rack price charged jobbers is typically
6 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
lower than the DTW price because Sunoco does not have to
transport the gasoline purchased by a jobber. Often, however,
Sunoco will lower its profit margin on the DTW price, and
hence the DTW price charged to direct-supply dealers,
because a particular dealer may be faced with a competitor
who sets its price below the average street price in the zone;
this lower price takes the form of a rebate that applies to the
next load of gasoline purchased from Sunoco.
Company operated stations and jobbers are notified in
advance of any proposed price change in the afternoon prior
to the change taking effect. In accordance with Section 3.02
of the DFAs, independent retailers such as Plaintiffs are not
advised in advance of any proposed price change, and they
pay Sunoco whatever DTW price is in effect on the day they
receive a scheduled delivery.
C. Sunoco’s Change in Business Focus
Prior to 1995, Sunoco generally sought to maintain a
separation between jobber retailers, jobber-supplied retailers
and retailers such as Plaintiffs who are supplied directly by
Sunoco. In 1995, Sunoco created a MidAmerica Division
with a new structure that combined the markets previously
segregated for Plaintiffs and jobber retailers. Sunoco’s 1995
strategic plan emphasized growing the number of Sunoco-
branded stations without investing the significant capital
required to purchase new stations. Sunoco sought to grow its
brand through jobbers by offering to sell jobbers real property
or by assigning supply contracts Sunoco had with direct
dealers in exchange for the jobber’s agreement to increase the
volume of gasoline purchased.

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No. 01-4326 Tom-Lin Enterprises, et al.
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2It is undisp uted that all the parties are “merchants” as defined in
Ohio Rev. Code A nn. § 1302.5 (defining “merchant” as “a person who
deals in goods of the kind or otherwise by his occupation holds himself
out as having knowledge or skill peculiar to the practices or goods
involved in the transaction or to whom such knowledge or skill may be
attributed by his employment of an agent or broker or other intermediary
who by his occupation holds himself out as having such knowledge or
skill”).
DISCUSSION
A. Standard of Review
We review a district court’s grant of summary judgment de
novo. Parker v. Metro. Life Ins. Co., 121 F.3d 1006, 1009
(6th Cir. 1997). A moving party is entitled to summary
judgment as a matter of law when there are no genuine issues
of material fact. Id.; Fed. R. Civ. P. 56(c). All evidence must
be viewed in the light most favorable to the nonmoving party.
Ellison v. Garbarino, 48 F.3d 192, 194 (6th Cir. 1995).
However, “[t]he moving party need not support its motion
with evidence disproving the nonmoving party’s claim, but
need only show that there is an absence of evidence to support
the nonmoving party’s case.” Celotex Corp. v. Catrett, 477
U.S. 317, 325 (1986).
B. Propriety of an Open Price Term under Ohio Law
Ohio law permits parties “if they so intend [to] conclude a
contract for sale even though the price is not settled.” Ohio
Rev. Code Ann. § 1302.18(A) (West 2003). Ohio law
imposes two obligations in this context. First, the price must
be “a reasonable price at the time for delivery if … nothing is
said as to price.” Id. § 1302.18(A)(1). Second, if the seller is
to fix the price under the contract, the price must be fixed “in
good faith.” Id. § 1302.18(B). These two requirements
essentially track the definition of “good faith” applicable to
transactions between merchants2 – “honesty in fact and the
8 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
3Ohio Rev. Cod e Ann. § 1302 .01(A)(2 ) is identical to the Uniform
Comm ercial Code (“UCC ”) § 2-103(1)(b).
observance of reasonable commercial standards of fair
dealing in the trade.” Id. § 1302.01(A)(2);3 see also id.
§ 1302.18 cmt. 3 (referencing applicability of definition of
“good faith” from § 1302.01).
Comment 3 to § 1302.18 states that “in the normal case a
‘posted price’ or a future seller’s or buyer’s ‘given price,’
‘price in effect,’ ‘market price,’ or the like satisfies the good
faith requirement.” Id. § 1302.18 cmt. 3 (emphasis added).
Several courts, including the Fifth Circuit Court of Appeals,
have interpreted Comment 3 to mean (1) in a case that is not
“normal,” objective reasonableness (e.g., pricing at market
rates or at the price in effect) is a necessary, but not a
sufficient, condition for a finding of good faith and (2) a case
is not “normal” when the seller lacks subjective good faith.
See, e.g., Mathis v. Exxon Corp., 302 F.3d 448, 454-57 (5th
Cir. 2002) (applying Texas law; holding that there is both a
subjective test (“honesty in fact”) and an objective test
(“reasonable commercial standards”) for determining the
propriety of a seller’s price-setting when price is an open
term); HRN, Inc. v. Shell Oil Co., 102 S.W.3d 205, 214 (Tex.
Ct. App. 2003) (same). According to this view, a seller with
the responsibility to fix a reasonable price does not act in
subjective good faith when it engages in price discrimination
– by treating similarly-situated buyers differently – or when
the seller is otherwise motivated by an intent to injure the
buyer. See Mathis, 302 F.3d. at 457 (“Any lack of subjective,
honesty-in-fact good faith is abnormal; price discrimination
is only the most obvious way a price-setter acts in bad faith
….”).
This Court recognizes that the Fifth Circuit’s interpretation
of “good faith” may be plausible under Texas law. It is not
within the province of this Court, however, to similarly

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No. 01-4326 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
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4Even if this Court were to adopt the objective/subjective distinction
applied by the Fifth Circuit, as discussed below, Sunoco would be entitled
to summary judgment because of Plaintiffs’ utter lack of evidence of
decreased profits and co mpe titive injury. Cf. Ma this, 302 F.3d at 457-58
(affirming jury verdict on claim for violation of open price term where
evidence showed that “Exxon planned to replace a number of franchisees
with [company-operated stations], that the DTW price was higher than the
sum of the rack price and transportation, that Exxon prevented the
franchisees from purchasing gas from jobbers after 19 94, and that a
number of franchisees were unprofitable or non-competitive”).
interpret Ohio’s counter-part where the Ohio courts already
have passed on the issue. In non-merchant transactions,
“good faith” generally means “honesty in fact in the conduct
or transaction concerned.” Ohio Rev. Code Ann.
§ 1301.01(S). The Ohio Supreme Court has held that honesty
in fact does not exist when the actions at issue are
“commercially unjustifiable.” Master Chem. Corp. v. Inkrott,
563 N.E.2d 26, 31 (Ohio 1990); accord Needham v.
Provident Bank, 675 N.E.2d 514, 523 (Ohio Ct. App. 1996);
Jim White Agency Co. v. Nissan Mot. Corp. in U.S.A., 126
F.3d 832, 834 (6th Cir. 1997) (applying Ohio law). The
merchant definition of “good faith” applicable in this case
incorporates the honesty in fact definition from § 1301.01(S)
and adds an additional requirement – “the observance of
reasonable standards of fair dealing in the trade.” Id.
§ 1302.01(A)(2). Thus, under Ohio law, to show that a
merchant-seller lacks good faith in fixing a price pursuant to
a contract with an open price term, it must be shown that the
price was not fixed in a commercially reasonable manner and,
moreover, that the pricing was commercially unjustifiable.
These are two distinct issues, and both involve an objective
analysis of the merchant-seller’s conduct.4
The issue in this case is whether Plaintiffs have produced
enough evidence to create a genuine issue that Sunoco
exercised its price-fixing obligation under the DFAs in a
commercially unreasonable fashion. If Plaintiffs cannot make
10 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
this showing, it follows, a fortiori, that Plaintiffs cannot
show that Sunoco’s actions were commercially unjustifiable.
As discussed below, Plaintiffs have failed to create a genuine
issue of material fact on either point, and, therefore, the
district court properly granted summary judgment for Sunoco.
1. “Observance of Reasonable Standards” Test
For a price to be fixed in good faith, the price must be set
pursuant to reasonable commercial standards of fair dealing
in the trade. Ohio Rev. Code Ann. §§ 1302.18 and
1302.01(A)(2). A priced fixed pursuant to § 1302.18 need not
be the lowest possible price. Cf. Havird Oil Co., Inc. v.
Marathon Oil Co., Inc., 149 F.3d 283, 290 (4th Cir. 1988)
(finding that “[w]hile it is true that some of Havird’s
competitors were selling gasoline at retail for less than Havird
could obtain gasoline at wholesale, this does not constitute a
breach of contract on the part of Marathon”); TCP Indus., Inc.
v. Uniroyal, Inc., 661 F.2d 542, 548 (6th Cir. 1981)
(recognizing that “[n]either the [UCC] nor the Official
Comments to the [UCC] require that a merchant-seller price
at fair market value under a contract with an open price term,
but specify that prices must be ‘reasonable’ and set pursuant
to ‘reasonable commercial standards of fair dealing in the
trade’”) (quoting UCC § 2-103); Au Rustproofing Ctr., Inc. v.
Gulf Oil Corp., 755 F.2d 1231, 1235-36 (6th Cir. 1985)
(stating that “Au contends that because its competitors sold
gasoline for less than Au could buy it from Gulf, Gulf’s prices
were unreasonable . . . In our view, this contention is
insufficient to establish that prices set by Gulf contravened
reasonable commercial standards of fair dealing in the
gasoline market or otherwise constitute bad faith or
commercially unreasonable behavior”); Ajir v. Exxon Corp.,
Nos. 97-17032, 97-17134, 1999 WL 393666, at *7 (9th Cir.
May 26, 1999) (unpublished) (stating that “[a]ll that the UCC
requires is that a price term be reasonable, not the lowest
possible”).

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No. 01-4326 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
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5Plaintiffs argue that the six or seven cent dealer margin that Sunoco
subtracts from the average 87 octane retail price to obtain the DTW price
is “dramatically different” from the 10 to 20 cent margin B P strives to
In order for Plaintiffs to meet their burden under § 1302.18,
Plaintiffs must prove, with respect to pricing, that Sunoco
violated reasonable commercial standards of fair dealing in
the gasoline marketing industry. Schwartz v. Sun Co., Inc.,
276 F.3d 900, 905 (6th Cir. 2002) (applying Michigan law).
This burden requires Plaintiffs to produce background
evidence of the manner in which other marketers of gasoline
in Central Ohio set their prices. Id. at 903, 905 (affirming
summary judgment for Sun on franchisee’s breach of contract
claim for wrongful pricing of gas on the ground that
franchisee “failed to introduce any background evidence
against which the commercial reasonableness of the prices
Sun had charged him could be assessed”). Plaintiffs,
however, have proffered no relevant, admissible proof.
The only relevant background evidence appears to be a
letter from an attorney at BP America, Inc., who prepared and
produced the letter to Plaintiffs in lieu of a formal production
of documents. According to the letter, BP determines DTW
prices based on retail street prices posted by its competitors
at retail outlets with an eye on the extent to which target sales
volumes and profit margins have been satisfied. BP
determines rack prices based on information purchased from
the Oil Price Information Service (“OPIS”); jobbers are
notified of price changes in the late afternoon of the day
before the new prices take effect. Sunoco similarly
determines DTW prices based on surveys of retail prices at
competitors and determines jobber rack prices based upon a
survey of its competitor’s jobber rack prices as reflected in
data from the OPIS. Like BP, Sunoco also provides advance
notice of price changes to jobbers. The Court fails to see any
material difference between BP’s and Sunoco’s pricing
practices.5 To the extent Plaintiffs argue that the BP letter is
12 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
maintain for its dea lers. App ellants’ Br. at 28. The y assert that this
differential in dealer margin is evidence that Sunoco does not follow
standard industry practice. Compliance with standard industry practice,
however, does not dictate that all refiners price their gasoline identically,
only that they loo k to the sa me ge neral criteria when setting prices. See
TCP Indus., 661 F.2d at 548 (“[n]either the [UCC] nor the Official
Comments to the [UCC] require that a merchant-seller price at fair market
value under a contract with an open price term, but specify that prices
must be ‘reasonable’ and set pursuant to ‘reasonable commercial
standards of fair dealing in the trade’”) (quoting UCC § 2-103 ).
6The Court doubts that the letter is admissible evidence o f BP ’s
pricing practices, since Plaintiffs have failed to establish a foundation as
to how the BP attorney has pe rsonal knowledge of such matters. See Fed.
R. Evid. 602 (“A witness may not testify to a matter unless evidence is
introduced sufficient to support a finding that the witness has personal
knowledge of the matter.”) Plaintiffs apparently agree. Although
Plain tiffs obtained this evidence in discovery, they now question “how
such an unverified re sponse co uld be dee med admissible.” App ellants’
Br. at 26-27.
7As additional evidence of standard industry p ricing policy, Plaintiffs
cite to the price that jobbers fix when selling Suno co-branded ga soline to
retail dealers– the rack price plus a few cents per gallon mark-up and
freight costs. In o ther wo rds, the jobbers b uy the gaso line from Sunoco
for the rack price and re-sell it to retailers (not Plaintiffs) for a mark-up
plus the cost of delivery. The relevant standard, however, is the DTW and
rack price that a refiner like Sunoco sets for gasoline, not the price for
which a middleman re-sells a refiner’s gasoline to retailers.
inadmissible,6 the record is utterly devoid of any competent
and relevant evidence of industry pricing standards, let alone,
Sunoco’s deviation from those standards.7 Accordingly, there
is no evidence indicating the existence of a material factual
dispute concerning whether Sunoco’s pricing practices were
commercially unreasonable.
2. “Commercially Unjustifiable” Test
Plaintiffs cite to three events that purportedly demonstrate
Sunoco’s bad faith in setting the DTW price: (1) changes in

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v. Sunoco, Inc.
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a rebate program for independent dealers; (2) Sunoco’s
adoption of a business plan in which Sunoco planned for an
increase in jobber retailers relative to the number of
independent dealers in the Columbus area; and (3) Sunoco’s
decision to permit jobbers to compete directly with
independent dealers in the Columbus area. None of these
events evidence a lack of honesty in fact, as that term is
defined under Ohio law, because Plaintiffs have not created
a genuine issue of material fact that Sunoco’s actions were
commercially unjustifiable.
a. VIP Program
Prior to Sunoco’s change to the Volume Improvement
Program in 1995, independent dealers had received a rebate
of the DTW price for all gallons purchased over a monthly
target figure, and the rebates increased as the volumes
purchased increased. Although Sunoco reduced the rebates
roughly by half, Sunoco also reduced the DTW price for all
of the gallons leading up to the monthly target figure.
According to Sunoco, the net effect to Plaintiffs from the
reduction in the rebates was negligible, and Plaintiffs have not
disputed this contention. Moreover, Plaintiffs have not
proffered any evidence of the rebate practices of other
refiners. See Short, 799 F.2d at 423 (affirming directed
verdict for refiner on claim that refiner’s reduction in a rebate
program put plaintiff at a competitive disadvantage; finding
no evidence to support a finding of bad faith where plaintiff
“did not produce evidence of the pricing or rebate practices of
other oil companies”). Thus, on this factual record, no
reasonable jury could find that Sunoco’s change in the VIP
program was commercially unjustifiable.
b. 1995 Business Plan
Plaintiffs also point to Sunoco’s 1995 business plan, as well
as related documents and testimony from Sunoco officials,
which show that Sunoco projected a gradual shift in the
14 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
Columbus area from direct-supply dealers like Plaintiffs to
jobber-retailers. The evidence shows that the relative
numbers of direct-supply dealers compared to jobber-retailers
has, in fact, declined since 1995. Plaintiffs argue that a jury
could infer from these facts that Sunoco intended to drive
independent owners like Plaintiffs out of business, in favor of
jobber-run retailers. Plaintiffs are incorrect.
Evidence that Sunoco anticipated and even planned for a
reduction in direct-supply dealers does not, in itself, permit an
inference that Sunoco intended to drive Plaintiffs out of
business. This is particularly true here, where there is no
evidence in the record that Plaintiffs have been driven out of
business or that jobber retailers either took business from any
of the plaintiffs or forced Plaintiffs to reduce their prices in
order to retain business. Plaintiffs have submitted no
evidence of lost profits or reduced revenue or gas sales
stemming from Sunoco’s decision to permit jobbers to
compete in the Columbus area.
Indeed, the evidence of Sunoco’s conduct since 1995
supports the conclusion that Sunoco intends to maintain the
competitiveness of its independent dealers. First, Sunoco has
renewed Plaintiffs’ DFAs since 1995. Second, as an
inducement to renew their DFAs, since 1995 Sunoco has paid
and/or promised all but one of Plaintiffs over one million
dollars, in the aggregate, to improve their respective
properties. Third, those Plaintiffs who control the real
property on which their businesses are located (all but three)
have had the option to switch gasoline suppliers at the end of
their contract terms if they find a better deal, yet all but one
of such Plaintiffs have chosen to continue to be directly
supplied by Sunoco. Fourth, since 1995, those Plaintiffs who
own their properties have received so-called “running
consideration” from Sunoco – a cents-per-gallon credit for
achieving negotiated monthly purchasing milestones. Based
on the totality of the evidence, Sunoco’s projection of a
decline in direct-supply retailers does not provide a sufficient

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No. 01-4326 Tom-Lin Enterprises, et al.
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factual basis from which Sunoco’s alleged intent to drive
Plaintiffs out of business could reasonably be inferred.
c. Competition with Jobbers
Related to Sunoco’s 1995 business plan, Plaintiffs also
point to the fact that, in 1995, Sunoco began to permit jobbers
to establish Sunoco stations in the Columbus market; prior to
that time, Plaintiffs’ potential competitors in the area were
either independent business owners like themselves or
company-owned stores. As noted above, however, there is no
evidence whatsoever of competitive injury, such as lost
business volume or decreased profit margins. There is no
evidence that Plaintiffs have been injured financially or even
that they are worse off as a class than the jobbers with whom
they allegedly compete and who have significant overhead
costs that Plaintiffs do not have.
Plaintiffs instead argue that they are not required to proffer
evidence of competitive harm. As support, they quote the
following statement from this Court’s decision in Schwartz:
“It is sensible to acknowledge that whenever there is price
discrimination of the sort involved here, the overall financial
health of the disfavored purchaser will usually be affected for
the worse.” Schwartz, 276 F.3d at 905. This statement,
however, was made in the context of Schwartz’s Robinson-
Patman Act claim, where proof of antitrust injury is not
“unduly rigorous.” Id. at 904. Tellingly, this Court affirmed
the dismissal of Schwartz’s UCC claim, noting that it was
incumbent on Schwartz “to prove that the prices he paid Sun
for its gasoline, even if they were higher than what others in
the same situation paid for the same product, were illegal.”
Id. at 905. Since the evidence showed that Sun had set the
rack price pursuant to reports of the OPIS, the Court held that
Schwartz failed to establish a prima facie case that Sun had
violated reasonable commercial standards of fair dealing. Id.
Plaintiffs face the same situation with respect to Sunoco,
which establishes its rack price in the same manner.
16 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
No. 01-4326
Even assuming that this Court’s comment about Schwartz’s
Robinson-Patman Act claim is relevant to a UCC claim for
violation of an open price term, it would be unavailing to
Plaintiffs. Schwartz had submitted evidence showing not
only lost profits, but also that the volume of gasoline sold at
his stations decreased when the jobbers opened competing
stations nearby and sold the same gas at a lower retail price.
Thus, the Court found that the jury did not have to make a
vast inferential leap to find that Sun’s price discrimination
had negatively impacted Schwartz’s bottom line. Id. at 905.
In contrast, Plaintiffs in the instant case have submitted no
evidence of financial injury, so there would be no harm for a
factfinder to link to Sunoco’s allegedly wrongful conduct.
At bottom, Plaintiffs have ignored the significant
distinctions between direct-supply dealers and jobbers.
Jobbers are responsible for maintaining and improving the
properties they own; maintaining their own offices and
petroleum storage facilities; bearing the risk of environmental
liability; maintaining a sales staff to service their retail
locations; and transporting the gasoline from the refiner’s
terminals to their own retail locations. The jobber rack price
is generally lower than the DTW price to compensate the
jobber for these functions, functions that Sunoco otherwise
would have to perform. Accordingly, a jobber’s contract with
Sunoco reflects its additional responsibilities and its
entitlement to the rack price. Conversely, a direct-supply
retailer’s contract reflects its lesser responsibilities and its
obligation to pay the generally higher DTW price. Plaintiffs
appear simply to desire more favorable price terms in their
contracts, contracts that several Plaintiffs have renewed yet
again during the pendency of this litigation. It is not the role
of this Court, however, to re-write Plaintiffs DFAs that were
negotiated at arm’s-length, nor to ensure that Plaintiffs obtain
the best possible prices for Sunoco gasoline. See Au
Rustproofing, 755 F.2d at 1235 (finding that refiner was not
unreasonable and did not act in bad faith because it had no
contractual duty to keep retailer competitive by charging a

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No. 01-4326 Tom-Lin Enterprises, et al.
v. Sunoco, Inc.
17
lower DTW price; “none of the documents restricts Gulf’s
discretion to set the tankwagon price, obligates Gulf to sell
gasoline to Au at competitive prices or otherwise establishes
Gulf’s liability for failure to keep Au competitive”); Ajir,
1999 WL 393666, at *6 n.7 (“Exxon is in the business of
selling gasoline to make a profit, and has entered into the
sales contracts with its dealers to further that purpose.
Reading the contracts to impose the duty on Exxon to assure
its dealers get the lowest possible prices . . . is thus
inconsistent with the purpose of the contracts.”).
Accordingly, summary judgment for Sunoco was fully
warranted.
CONCLUSION
Plaintiffs have failed to create a genuine issue of material
fact that Sunoco’s DTW prices were commercially
unreasonable. The only relevant “evidence” on the record
suggests that Sunoco complied with standard pricing
practices. Plaintiffs also have not created a genuine issue that
Sunoco’s setting of rack prices relative to the DTW prices
was commercially unjustifiable. All Plaintiffs have shown is
that Sunoco planned for a relative reduction in dealer-
supplied retailers compared to jobber-supplied retailers. They
have not proffered any facts from which it could be
reasonably inferred that any specific actions Sunoco took to
effectuate this plan injured Plaintiffs in any way. For these
reasons, we AFFIRM the district court’s order granting
summary judgment to Sunoco on Plaintiffs’ complaint.

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