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The Franchise Memorandum

Posts from August 2017 - Issue 220.

The United States Court of Appeals for the Sixth Circuit has reversed a district court's grant of a preliminary injunction enjoining termination of a beer distributor who failed to obtain the brewer's consent before a change of the distributor's ownership. S. Glazer's Distribs. of Ohio, LLC v. Great Lakes Brewing Co., 860 F.3d 844 (6th Cir. June 26, 2017). The parties' agreement required the brewer's written consent prior to any change in ownership of the distributor. Yet, without obtaining consent, the distributor merged with another distributor and requested consent only after a ...

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Posted in Trademarks

The United States Court of Appeals for the Third Circuit affirmed on alternative grounds the Western District of Pennsylvania's finding that a manufacturer owned a trademark used to distribute its products, but the court vacated and remanded the case as to damages. Covertech Fabricating, Inc. v. TVM Building Prods., Inc., 855 F.3d 163 (3d Cir. Apr. 18, 2017). Covertech manufactures insulation products under the umbrella of its rFOIL brand, which includes the products CONCRETE BARRIER (a registered trademark) and ULTRA (an unregistered trademark). Covertech entered into two ...

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A federal court in South Dakota recently denied a motion to exclude a dealer's expert testimony in a dispute over lost profits resulting from the termination of a distributor agreement. Black Hills Truck & Trailer, Inc. v. Mac Trailer Mfg., Inc., 2014 WL 5782452 (D.S.D. July 10, 2017). MAC had entered into a written distributor agreement with Black Hills. Less than a year later, MAC sent Black Hills proposed modifications to the agreement and required Black Hills to accept the modifications. Black Hills filed a lawsuit in response, alleging that MAC's actions constituted a wrongful ...

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A federal court in Colorado dismissed a car dealer's claim of fraudulent concealment against its manufacturer in European Motorcars of Littleton, Inc. v. Mercedes-Benz USA, LLC, 2017 WL 2629133 (D. Colo. June 19, 2017). The controversy arose when Mercedes-Benz USA ("MBUSA") entered into an agreement to establish a new dealership several miles from plaintiff Mercedes-Benz of Littleton ("MBOL"). MBOL contended MBUSA had hid its intention to establish a new dealership nearby. The court dismissed the claim, holding that MBUSA had no duty to disclose its intention.

Applying ...

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A federal court in Nevada declined to dismiss a beer distributor's claim that a brewer had breached the implied duty of good faith and fair dealing in Crown Beverages, Inc. v. Sierra Nevada Brewing Co., 2017 WL 1508486 (D. Nev. Apr. 26, 2017). Plaintiff-distributor Crown sued brewer Sierra Nevada Brewing over a dispute arising out of the parties' distribution agreement that made Crown the exclusive importer and wholesaler of Sierra Nevada products in northern Nevada. Nevada statutes governing liquor suppliers and wholesalers require that a brewer notify a distributor 90 days ...

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Posted in Class Actions

A California federal court has denied class certification to two proposed classes of small wholesalers alleging that Living Essentials, LLC, the maker of 5-hour Energy, engaged in price discrimination. ABC Distrib., Inc. v. Living Essentials LLC, 2017 WL 2603311 (N.D. Cal. Apr. 7, 2017). The plaintiffs, who were three small wholesale distribution companies in California, alleged that Living Essentials sold 5-Hour Energy to wholesalers at different prices, discriminating against small wholesalers in violation of the Robinson-Patman Act and California law. The court found ...

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About this Publication

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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