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The Franchise Memorandum

Posts from July 2010 - Issue 132.
Posted in Terminations

A New Jersey federal court issued a lengthy opinion last month addressing cross motions for summary judgment filed by a group of beer distributors and defendants InBev and Anheuser-Busch. The case is Warren Distributing Co., et al. v. InBev, et al., 2010 U.S. Dist. LEXIS 55542 (D.N.J. June 7, 2010). While the court addressed several issues, it held that InBev could not succeed on its motion for summary judgment on the plaintiffs’ breach of contract claim, finding that the plaintiffs had put forth viable evidence that InBev’s reliance on the doctrine of ...

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Posted in Terminations

In a case that has been in litigation for several years, the Eighth Circuit has ruled in favor of a manufacturer of farm equipment in Cole v. Homier Distributing Co., 599 F.3d 856 (8th Cir. 2010). The background of the case, first reported in Issue 102 of The GPMemorandum, was that plaintiff Cole had entered into an oral agreement with manufacturer Homier under which Cole became a distributor and dealer of Homier’s products. As a result of that agreement, Cole established more than 30 dealerships. The parties later memorialized their agreement through a written distributorship ...

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Posted in Terminations

In Minnesota Deli Provisions, Inc. v. Boar’s Head Provisions Co., 2010 U.S. App. LEXIS 10821 (8th Cir. June 11, 2009), the Eighth Circuit affirmed a grant of summary judgment dismissing plaintiff Minnesota Deli’s claims arising out of the termination of its distributorship for Boar’s Head deli products. In doing so, the court rejected Minnesota Deli’s argument that its distributorship was not terminable at will. The court held that statements by Boar’s Head executives allegedly telling Minnesota Deli it would “never be touched” as long as it grew its business ...

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Posted in Antitrust

A New York federal court recently granted Honeywell International, Inc.’s motion to dismiss a former distributor’s antitrust claims, despite the plaintiff’s allegation that it was terminated pursuant to an agreement among Honeywell and its other distributors, who allegedly objected to the plaintiff’s discounting. In Integrated Systems and Power, Inc. v. Honeywell Int’l, Inc., 2010 U.S. Dist. LEXIS 47283 (S.D.N.Y. May 13, 2010), the court found ISPI’s allegations insufficient to state a claim for either per se or Rule of Reason violations of Section 1 of the ...

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Posted in Antitrust

In Shell’s suit against a former franchisee under the Petroleum Marketing Practices Act, the First Circuit held that the franchisee’s price discrimination antitrust counterclaim was properly dismissed on summary judgment because the franchisee failed to show that it was competing with favored retailers of Shell Oil. The Shell Oil Company (Puerto Rico) Ltd. v. Los Frailes Serv. Station, Inc., 605 F.3d 10 (1st Cir. 2010). The franchisee claimed that Shell was violating Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, as well as Puerto Rican antitrust law ...

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In Webb Candy, Inc. v. Walmart Stores, 2010 U.S. Dist. LEXIS 55985 (D. Minn. June 7, 2010), the court examined the viability of a forum-selection clause after the expiration of the underlying distribution agreements. In this case, Walmart had one-year vendor contracts with two companies that allowed individual stores to buy merchandise directly from those two companies without contacting Walmart’s corporate office. Both of those contracts had expired, but the vendor identification numbers of the companies were still in effect. Webb Candy, a third-party vendor that did not ...

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In The Dry Dock, LLC v. The Godfrey Conveyor Co., 2010 U.S. Dist. LEXIS 55628 (E.D. Wis. June 7, 2010), the plaintiff, a boat retailer, sued a manufacturer from which it purchased boats, claiming that the boats were defective and needed repairs. The retailer brought claims for breach of contract, breach of warranty, and violation of the Wisconsin Fair Dealership Law (WFDL), seeking consequential damages and reimbursement for the cost of repairs. The retailer claimed that the manufacturer’s failure to honor warranty claims and its removal of the retailer from the “dealer ...

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Posted in Terminations

In Al’s Service Center, et al. v. BP Products North America, Inc., 2010 U.S. App. LEXIS 6270 (7th Cir. Mar. 26, 2010), the Seventh Circuit affirmed a district court’s summary judgment ruling in favor of BP, finding that BP had not violated the Petroleum Marketing Practices Act (PMPA). In this case, a gas station franchisee was notified by the Illinois Department of Transportation of a partial condemnation of its property for a road widening project, which would result in the closing of some of the entrances to its gas station and consequently would negatively impact its business. In ...

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Posted in Antitrust

In an instructive opinion arising from the appeal of two related antitrust suits, the Third Circuit in Howard Hess Dental Laboratories Inc. v. Dentsply International, Inc., 602 F.3d 237 (3d Cir. 2010), affirmed the dismissal of two dental laboratories’ claims for monopolization against a manufacturer of artificial teeth and for conspiracy to monopolize and restrain trade against the manufacturer and its dealers. The laboratories, which purchased artificial teeth to make dentures, alleged that the manufacturer set anticompetitive prices for artificial teeth and ...

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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