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The Franchise Memorandum

Posts from August 2016 - Issue 208.

A Wisconsin federal court recently granted summary judgment in favor of Dean Foods on the plaintiff’s claim that a hauling agreement between the parties was governed by the Wisconsin Fair Dealership Law (“WFDL”). Andrea Distrib., Inc. v. Dean Foods of Wis., LLC, 2016 WL 3199544 (W.D. Wis. June 8, 2016). Dean Foods and Andrea Distributing were parties to two agreements: (1) a hauling agreement, under which Andrea Distributing hauled Dean Foods’ products directly to Dean Foods’ customers, and (2) a distribution agreement, under which Andrea Distributing purchased ...

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A Virginia federal court partially granted Volvo Group North America’s motion for a preliminary injunction to stop the proposed sale of a group of truck dealerships. Volvo Grp. N. Am., LLC v. Truck Enters., Inc., 2016 WL 1479687 (W.D. Va. Apr. 14, 2016). Volvo initiated the suit against a group of truck dealers who owned and operated seven dealerships, four of which sold both Volvo and Kenworth trucks, two of which sold Kenworth and Isuzu trucks, and one that sold only Kenworth trucks. The dealers entered into an agreement with a third party to sell the dealerships in a package deal. In ...

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Posted in Terminations

Meanwhile, the United States District Court for the Northern District of Indiana granted in part and denied in part a manufacturer’s motion to dismiss claims arising from the termination of a dealership agreement in Ervin Equipment Inc. v. Wabash National Corp., 2016 WL 2892132 (N.D. Ind. May 17, 2016). Ervin entered into a dealership agreement with semitrailer manufacturer Wabash that granted Ervin the right to sell Wabash products in a territory that covered parts of Texas and all of Mexico. After several years, during which Ervin repeatedly sold Wabash products outside of its ...

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In Miller Construction Equipment Sales, Inc. v. Clark Equipment Co., 2016 WL 2626803 (D. Alaska May 6, 2016), the federal court in Alaska found that a distributor did not have an obligation to repurchase several pieces of equipment in its former dealer’s inventory under Alaska’s distributorship statute. After the parties’ distribution agreement ended, Miller demanded that Clark repurchase several pieces of heavy equipment (and associated attachments) under a statute which governs the disposition of a dealer’s remaining merchandise upon the termination of a ...

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A federal district court in Washington has preliminarily enjoined a terminated distributor from violating the terms of his distribution agreement by competing with Organo, his former supplier of mushroom-based drinks and products. Organo Gold Int’l, Inc. v. Ventura, 2016 WL 1756636 (W.D. Wash. May 3, 2016). The parties’ agreement included a noncompete provision that prohibited Ventura’s participation in any opportunity involving the sale of mushroom-based products for twelve months following termination. The agreement further prohibited Ventura from soliciting ...

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Posted in Antitrust

In Issues 196 and 200 of The GPMemorandum, we discussed some of the common antitrust risks facing manufacturers. Prevention is the best cure for those problems, as attempts to address the risks at the time of termination or after a claim has been lodged are too late. We recommend that manufacturing companies review their compliance with antitrust laws by formally gathering and scrutinizing all of their pricing programs, sales policies, competitor communications, and customer agreements, among other documents, to uncover and defuse landmines. Sales leadership and other ...

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The United States Court of Appeals for the Sixth Circuit has affirmed a lower court’s finding that the successor-manufacturer exception to Ohio’s alcohol distributor protection law applies when termination follows the sale of an alcohol supplier’s parent company to a third party. Tri County Wholesale Distribs., Inc. v. Labatt USA Operating Co., LLC, 2016 WL 3618970 (6th Cir. Mar. 17, 2016). Under ordinary circumstances, the Ohio statute requires a supplier to have “just cause” for termination of an alcohol distributor. There is, however, an exception to the just cause ...

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Posted in Terminations

The United States Court of Appeals for the Third Circuit has affirmed in part and reversed in part a Pennsylvania federal court’s order dismissing a dealer’s claims that arose from the alleged improper termination of its dealer agreement. Bull Int’l, Inc. v. MTD Consumer Grp., Inc., 2016 WL 3542249 (3d Cir. June 29, 2016). MTD terminated, without cause, a termless dealer agreement with Bull in accordance with the express terms of the agreement. Bull claimed that, among other things, the termination breached the implied covenant of good faith and fair dealing because it was ...

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Posted in Antitrust

The United States Court of Appeals for the Third Circuit recently ruled that Swatch Group was not subject to New Jersey’s Franchise Practices Act (“NJFPA”) but partially reversed the lower court’s summary judgment order because a material dispute of fact remained regarding a retailer’s claim that Swatch violated the Robinson-Patman Act (“RPA”). Orologio of Short Hills, Inc. v. Swatch Group (U.S.), Inc., 2016 WL 3454211 (3d Cir. June 24, 2016). Orologio, a high-end watch store in suburban New Jersey, sued Swatch after it was dropped as an authorized dealer. Orologio ...

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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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