Blog Banner Image

The Franchise Memorandum

California Federal Court Grants Judgment Against Plaintiff

The parent companies of a hotel chain prevailed against personal injury claims brought in Reider v. Radisson Hotels Int’l et al., No. 3:08-cv-02328 (S.D. Cal. March 8, 2010). The case arose out of serious injuries suffered by the plaintiffs when they fell through a glass door in a sports bar located within a Radisson hotel in Japan. The hotel was operated under a management agreement between the hotel owner and a subsidiary of the defendants based in Singapore. The plaintiffs failed to name the subsidiary as a defendant, bringing suit instead against the two parent companies in the United States. In granting summary judgment, the court rejected the plaintiffs’ “agency” theory that any liability of the subsidiary in operating the hotel should be imputed to the parent companies because they allegedly had a “right to control” the subsidiary. The California federal court rejected the plaintiffs’ argument and held that they had presented insufficient evidence of the parent companies exerting any “day to day” control over the subsidiary, which was the correct legal test for determining agency under California law. Gray Plant Mooty represented the parent companies in this case and represents the franchisor of the system.

Email LinkedIn Twitter Facebook

The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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. 

To subscribe to monthly emails for The Franchise Memorandum, please click here


















Blog Authors