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The Franchise Memorandum

Posts from March 2012 - Issue 153.
Posted in Antitrust

Last month, the United States District Court for the Western District of Arkansas dismissed state and federal antitrust claims brought by against Green Mountain Coffee relating to the distribution of the “K-cup” single-serve coffee capsule, which is used with a patented coffee machine owned by Green Mountain., Inc. v. Green Mountain Coffee Roasters, Inc. et al., 2012-1 Trade Cases ¶ 77,790 (W.D. Ark. Feb. 15, 2012)., an online retailer of coffee and coffee-related products, alleged that Green Mountain acquired essentially all ...

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In Getty Petroleum Marketing, Inc. v. 2211 Realty, LLC, 2012 U.S. Dist. LEXIS 19346 (D. Mass. Feb. 16, 2012), a Massachusetts federal court considered a dispute arising out of the termination of a dealership agreement. Pursuant to the agreement, which Getty assigned to Green Valley Oil, defendant 2211 Realty operated a Lukoil station in Rhode Island. The plaintiffs terminated the agreement based on 2211 Realty’s alleged failure to pay for fuel deliveries, and initiated a lawsuit to enforce termination. 2211 Realty brought counterclaims alleging, among other things, breach of ...

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Posted in Encroachment

In Kia Motors America, Inc. v. Glassman Oldsmobile Saab Hyundai, Inc., 2012 U.S. Dist. LEXIS 7346 (E.D. Mich. Jan. 23, 2012), a federal district court held that Kia’s decision to add a new dealership to the defendant’s assigned geographic area did not implicate the “anti-encroachment” provision of the Michigan Motor Vehicle Dealers Act. Under the statute, a distributor that seeks to place a new dealer within the “relevant market area” of an existing dealer must satisfy certain procedures. In 1998, at the time the parties executed their agreement, the statute defined ...

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Posted in Terminations

In Long-Lewis Sterling Western Star Of Bessemer v. Sterling Truck Corporation, 2012 U.S. App. LEXIS 3130 (Feb. 17 2012), an auto dealer sued a distributor and manufacturer under the Alabama Motor Vehicle Franchise Act, claiming that the dealer had been coerced to participate in a program that conditioned the purchase of 2008 model year vehicles upon the purchase of the 2007 model. In affirming the lower court’s grant of summary judgment in favor of the manufacturer, the Eleventh Circuit panel first found that a 2010 amendment to the Act modifying the definition of “coerce” did ...

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Posted in Antitrust

A federal district court in New York has denied a plaintiff’s motion to dismiss antitrust counterclaims for discriminatory pricing by a seller to competing buyers. In Dayton Superior Corp. v. Spa Steel Products, Inc., 2012 U.S. Dist. LEXIS 4283 (N.D. N.Y. Jan. 13, 2012), the plaintiff originally sued the defendant for breach of contract to recover $1.2 million that the defendant allegedly owed the plaintiff for goods sold and delivered. The defendant brought counterclaims with its amended answer, including a counterclaim under the Robinson-Patman Act based on the allegation ...

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Posted in Arbitration

A recent decision from the Maine federal district court underscores the need to review provisions in franchise agreements to ensure that they do not have unintended consequences. In Oliver Stores v. JCB, Inc., 2011 U.S. Dist. LEXIS 149718 (D. Maine Dec. 29, 2011), the magistrate judge granted a motion to compel arbitration of two of the three counts of the complaint, but held that the remaining count survived because of the agreement’s savings clause. The savings clause provided that “[i]f any provision herein contravenes the laws or regulations of any state or other ...

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Posted in Contracts

In DaimlerChrysler Motors Company, LLC v. Manuel, et al., 2012 Tex. App. LEXIS 1489 (Tex. Ct. App. Feb. 24, 2012), a Texas appellate court affirmed the trial court’s finding that DaimlerChrysler (Chrysler) breached the best efforts provision of its contract with its dealer. In this case, Chrysler entered into an agreement with the dealer for a new Chrysler-Jeep dealership in South Arlington, Texas. The agreement stated that Chrysler granted the dealership subject to the possibility that it could be protested by another dealer, which would delay its establishment. The contract ...

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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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