RICHMOND -- Mobil Oil Corp., saying recent amendments to Virginia's Petroleum Franchise Act are unconstitutional, has asked a federal court to bar enforcement of the amendments.
The legislation enacted earlier this year is designed to protect retail gasoline dealers from competition with oil companies and to free them from control by refiners. The measure, which took effect July 1, was strongly supported by franchise dealers and opposed by oil companies.
Mobil says in its suit filed in U.S. District Court that the legislation will reduce competition between stations, raise retail gasoline prices and prevent the company from enforcing provisions of some of its contracts.
It said the law is unconstitutional because Mobil will be unable to recover its "substantial investment in service station properties in Virginia, to maintain nationwide uniformity" of its marketing policies and franchise system and preserve the integrity of its federally registered trademark.
Mobil said the primary way it enforces such things as product quality, appearance, advertising, customer service, credit card and operating-hour standards is through its franchising and distributor agreements.
A spokesman for Virginia Attorney General Mary Sue Terry said he could not comment on the suit.
Mobil said the legislation prevents it from requiring its franchise dealers to purchase minimum quantities of Mobil fuel and prohibits it from enforcing the contract requirements of some dealers to operate 24 hours a day.