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The Franchise Memorandum

Posts from December 2018 - Issue 236.
Posted in Antitrust

A federal court denied a distributor’s motion for a preliminary injunction and dismissed its antitrust claims against a competitor, holding that the distributor failed to adequately plead its claims under either Section 1 or Section 2 of the Sherman Act. Nicolosi Distrib., Inc. v. FinishMaster, Inc., 2018 WL 4904918 (N.D. Cal. Oct. 9, 2018). Plaintiff Nicolosi Distributing is a small distributor of automotive paints and supplies that sells to auto body shops in the San Francisco Bay Area. It sued FinishMaster and its Canadian parent company, alleging that FinishMaster entered ...

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Posted in Arbitration

The United States District Court for the Eastern District of Pennsylvania has denied a drug manufacturer’s motion to compel arbitration of a putative class member’s antitrust claim. In re Remicade Antitrust Litig., 2018 WL 5314775 (E.D. Pa. Oct. 26, 2018). The plaintiff at issue was an authorized distributor, pursuant to a distributor agreement, of an infliximab medication called Remicade. The distributor alleged the drug manufacturer monopolized the infliximab market and artificially inflated prices by entering into third-party contracts and imposing rebate ...

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In another case involving the Wisconsin dealership statute, a federal court granted a manufacturer’s motion for summary judgment after finding that a distributor was not a “dealership” under the Wisconsin Fair Dealership Law (WFDL). PMT Machinery Sales, Inc. v. Yama Seiki USA, Inc., 2018 WL 5775919 (E.D. Wis. Nov. 2, 2018). In October 2015, PMT was incorporated to sell Yama Seiki machines and immediately contacted Yama Seiki seeking to become an exclusive distributor in eastern Wisconsin. The general manager of Yama Seiki sent PMT an “exclusive letter of dealership,” ...

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Posted in Procedure

A federal court in California granted in part and denied in part a dealer’s motion to amend its complaint against Ralph Lauren Corp. and related entities. Card v. Ralph Lauren Corp , 2018 WL 4109082 (N.D. Cal. Aug. 29, 2018). Card was an approved dealer of Ralph Lauren Home products. Following termination of the relationship by Ralph Lauren Home, Card filed suit alleging breach of implied contract, breach of the implied covenant of good faith and fair dealing, violations of the Robinson-Patman Act, and a variety of other tort-based and statutory claims. Ralph Lauren moved to dismiss ...

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In Arena Restaurant & Lounge LLC v. Southern Glazer’s Wine & Spirits, LLC, 2018 WL 4334631 (N.D. Cal. Sept. 10, 2018), a federal court in Northern California granted Southern Glazer’s motion to dismiss a putative class action lawsuit brought by plaintiffs who purchased liquor from Southern Glazer, an international wine and spirits distributor. The plaintiffs alleged that Southern Glazer engaged in various unlawful and unfair business practices, including violations of California’s Unfair Practices Act consisting of (1) below-cost sales, (2) loss-leader sales, (3 ...

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A federal court in Minnesota recently ruled that a manufacturer was not liable under Minnesota or Wisconsin dealer statutes when its five-year relationship with a dealer ended over disputes about the noncompete obligation in a new form of annual contract. In Tri-State Bobcat Inc. v. FINN Corp., 2018 WL 4268898 (D. Minn. Sept. 6, 2018), Tri-State Bobcat brought suit against FINN Corp., a manufacturer of hydroseeders and other landscaping equipment, after the parties failed to agree on terms for a 2016 dealer agreement. While the parties were negotiating terms for the new contract ...

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Posted in Antitrust

A federal court in North Carolina recently denied Hyundai’s request to dismiss federal antitrust counterclaims brought against it in a trademark infringement lawsuit. Hyundai Motor Am., Inc. v. Direct Techs. Int’l, Inc., 2018 WL 4110544 (W.D.N.C. Aug. 29, 2018). Hyundai sued Direct Technologies International (DTI) for trademark infringement, false advertising, dilution, unfair competition, intentional interference, and unfair and deceptive trade practices, alleging that DTI imported and sold Hyundai-branded parts through an unauthorized distributor. In ...

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Posted in Choice of Law

A manufacturer represented by Gray Plant Mooty recently obtained an important victory when a federal court in Iowa enforced a choice of law provision to preclude application of California’s unfair competition statute. Quality Office Furnishings, Inc. v. Allsteel, Inc., No. 3:17-CV-00041- JEG (S.D. Iowa Sept. 11, 2018). This dispute arose after Allsteel, a nationwide manufacturer of office furniture headquartered in Iowa, declined to renew its agreement with a California-based dealer. Although the dealer agreement designated Iowa’s courts as the exclusive forum and ...

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Posted in Antitrust

The United States District Court for the District of Kansas has granted in part and denied in part motions by the distributor and supplier of EpiPen® products (“Mylan” and “Pfizer,” respectively) to dismiss a class action lawsuit initiated by the products’ consumers. In re EpiPen Mktg., Sales Practices, & Antitrust Litig., 2018 WL 3973153 (D. Kan. Aug. 20, 2018). The consumers’ 1,400-paragraph complaint alleges that Mylan and Pfizer have devised an unlawful scheme to establish a monopoly over the epinephrine auto-injector products market. It claims Mylan and ...

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The United States Court of Appeals for the Seventh Circuit has affirmed a district court’s determination that a distributor’s claims were stale under the applicable statute of limitations. Heiman v. Bimbo Foods Bakeries Distrib. Co., 902 F.3d 715 (7th Cir. Aug. 30, 2018). Heiman’s company, JTE, distributed products for defendant Bimbo Foods under a distribution agreement that did not have a fixed duration and could be terminated in the event of a noncurable or untimely cured breach by one of the parties. The agreement also specified that New York law would govern all claims and ...

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Posted in Defamation

In a dispute between a mattress retailer and a bedding manufacturer, the United States Court of Appeals for the Second Circuit has ruled that statements made to representatives of the retailer may have constituted slander. Sleepy’s LLC v. Select Comfort Wholesale Corp., 2018 WL 6174650 (2d Cir. Nov. 27, 2018). Sleepy’s, a mattress and bedding retailer, entered into a dealer agreement with Select Comfort pursuant to which Sleepy’s acquired the right to sell Select Comfort’s ‘‘Personal Preference” line of “Sleep Number” beds in Sleepy’s stores. Select ...

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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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