## Facts

- Abrahim & Sons Enterprises and about 43 independent gasoline dealers operated Shell- or Texaco-branded stations in Southern California under leases and dealer agreements with Shell or Texaco.
- Shell and Texaco formed Equilon Enterprises, LLC to combine their western refining and marketing operations.
- Shell and Texaco contributed western assets to Equilon, including gas-station premises interests, leases, and dealer agreements.
- Shell executed grant deeds conveying “all its rights, title, and interest” in relevant gas-station properties to Equilon, and post-transaction Equilon held the interests as owner/lessor.
- Corporate and securities filings characterized Equilon as a distinct entity, with descriptions indicating either no unilateral control by Shell or joint control by Shell and Texaco.
- The dealers alleged the contribution of premises interests to Equilon was a disposition to a separate legal entity that triggered California’s statutory right of first refusal.

## Issues

1. Whether Shell’s and Texaco’s contribution of gas-station premises interests to Equilon constituted a “sell, transfer, or assign” under California Business & Professions Code § 20999.25(a).
2. Whether Equilon, though owned by Shell and Texaco, qualified as “another person” under § 20999.25(a) such that the statute required an offer to the dealers before the disposition.

## Decision

- The Ninth Circuit reversed the district court’s summary judgment for Shell, Texaco, and Equilon.
- The court held the contribution of premises interests to Equilon constituted a “transfer” within the ordinary meaning of § 20999.25(a).
- The court held Equilon was “another person” because an LLC is a separate legal entity from its members, even if wholly or jointly owned by them.
- The case was remanded for further proceedings consistent with the appellate interpretation of § 20999.25(a).

## Legal Principles

- Under California law, an LLC is a separate legal “person” distinct from its members; ownership does not erase entity separateness for statutory application.
- Statutory terms such as “transfer” are applied according to ordinary meaning when the text is clear; a transfer occurs when an owner relinquishes title, possession, and control and vests them in another legal person.
- A franchisor’s movement of franchise premises interests into a newly formed affiliated entity can qualify as a transfer to “another person,” triggering franchisee protections such as a right of first refusal under § 20999.25(a).

## Conclusion

Because Shell and Texaco conveyed gas-station premises interests to Equilon, a separate legal entity, the transaction was a “transfer” to “another person” under California Business & Professions Code § 20999.25(a), requiring that dealers be offered the opportunity to purchase before the disposition.


Abrahim & Sons Enters. v. Equilon Enters., LLC, 292 F.3d 958 (9th Cir. 2002)