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The Franchise Memorandum

Posts from April 2016 - Issue 204.
Posted in Antitrust

The Michigan Court of Appeals recently affirmed a judgment in favor of a dealer on its claims that the manufacturer of the products at issue had violated both the Michigan Antitrust Reform Act ("MARA") and the Michigan Farm and Utility Equipment Act ("MFUEA") by increasing competition in the dealer's exclusive territory. Manitou N. Am., Inc. v. McCormick Intg, LLC, 2016 WL 439354 (Mich. Ct. App. Feb. 2, 2016). Manitou, a manufacturer and supplier of telescoping boom lifts, or "telehandlers," entered into a dealership agreement with McCormick, under which McCormick was to become an ...

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Posted in Terminations

The United States District Court for the Southern District of New York has granted a distributor's motion for judgment on the pleadings, holding that its distribution agreement could not be terminated without cause. Neopharm Ltd. v. Wyeth-Ayerst Int'l LLC, 2016 WL 1076931 (S.D.N.Y. Mar. 18, 2016). Neopharm distributed vaccines manufactured by the defendant, Wyeth, pursuant to a distribution agreement signed in 2002. Originally, the agreement permitted either party to terminate the relationship without cause upon three years' notice. In 2009, in response to a separate ...

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A federal court in Pennsylvania granted a manufacturer's motion for summary judgment on a distributor's breach of contract claim in Precision Industrial Equipment v. IPC Eagle, 2016 WL 192601 (E.D. Pa. Jan. 14, 2016), finding that the claim was barred by the statute of frauds. Precision, a seller and servicer of industrial and commercial cleaning and maintenance equipment, had entered into an oral agreement with IPC to market and distribute IPC's products. Precision alleged that during their discussions, IPC agreed not to sell directly to any of Precision's customers. When a ...

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Posted in Antitrust

A federal district court in New Jersey has denied ExxonMobil's motion to dismiss various antitrust, franchise, and common law claims brought by a group of more than 50 gas station franchisees. S. Gas, Inc. v. ExxonMobil Oil Corp., 2016 WL 816748 (D.N.J. Feb. 29, 2016). The plaintiffs, who leased retail gas stations from Exxon and were required to purchase gas from Exxon for resale to their customers, alleged that Exxon had sold to them at discriminatory prices compared to competing wholesale customers in violation of the Robinson-Patman Act, violated the New Jersey Franchise ...

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Posted in Terminations

A United States District Court in Arizona last month denied Chrysler's motion for summary judgment in a case brought by a dealership's majority shareholder and general manager whose contracts with Chrysler were terminated by the automaker. Smith v. FCA US LLC, 2016 WL 1158789 (D. Ariz. Mar. 24, 2016). At issue in this case was whether Smith, the plaintiff, qualified as a "dealer" and thus was protected under the federal Automobile Dealers' Day in Court Act ("DDCA") and similar state statutes.

In denying Chrysler's attempt to win as a matter of law without a trial, the court relied ...

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The Supreme Court of Minnesota has reversed the denial of a motion to enjoin one Nissan dealership from relocating to a location within ten miles of another. Wayzata Nissan, LLC v. Nissan North Am., Inc., 2016 WL 626069 (Minn. Feb. 17, 2016). The relocation resulted from the sale of the dealership by its previous owner, who wanted to retain the dealership premises for other purposes. The sale contemplated relocation of the dealership to a location approximately 7.5 miles from an existing Nissan dealership operated by the appellant, Wayzata. Nissan approved the sale and relocation and ...

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The state's Supreme Court has held that New Hampshire may regulate equipment dealerships in the same way it regulates motor vehicle dealerships, without violating the Contracts Clause of either the state or federal constitutions. Deere & Co. v. New Hampshire, 130 A.3d 1197 (N.H. Dec. 29, 2015). At issue was an amendment to New Hampshire's "Auto Dealer's Bill of Rights." Specifically, SB 126 amended the bill of rights to include "equipment" in the definition of "motor vehicle." This addition could be read to increase regulation of equipment manufacturer/dealer relationships in a ...

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Posted in Terminations

The United States District Court for the Eastern District of Wisconsin recently ruled that a dealer's sale of its business without supplier consent constitutes good cause for the termination of a dealer agreement under the Texas Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act ("FPA"). Texas Ujoints, LLC v. Dana Holding Corp., Bus. Franchise Guide 91 15,675 (CCH) (E.D. Wis. Dec. 21, 2015).

The court's decision constitutes a reversal of its prior grant of summary judgment in favor of the dealer, Texas Ujoints, as reported in Issue 196 of The ...

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A Wisconsin federal court recently granted a manufacturer's motion to transfer venue on the basis of a forum selection clause contained in the parties' distribution agreement. Brava Salon Specialists, LLC v. Label.M USA, Inc., 2016 WL 632649 (W.D. Wis. Feb. 16, 2016). Brava had filed suit against the manufacturer, Label.M, in state court and raised claims for breach of contract and violations of the Wisconsin Fair Dealership Law ("WFDL"). After removing the case to federal court in Wisconsin, Label.M moved to transfer the case to the Southern District of Florida on the grounds the ...

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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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