In September, an Ohio federal court granted the motion for preliminary injunction brought by a group of alcohol beverage distributors, enjoining their supplier from enforcing the terminations of their distributorships. The case is Tri-County Whole Distrib., Inc. v. The Wine Group, Inc., 2010 U.S. Dist. LEXIS 92598 (D. Ohio Sep. 2, 2010). In granting the motion, the court held that the supplier did not demonstrate that it had “just cause” to terminate the distributorships under the Ohio Alcoholic Beverages Franchise Act because the distributors had not breached their agreements. Rather, the supplier simply wanted to move distribution of its wine products in Ohio to a single statewide distributor. The court found that, although the Franchise Act does not define “just cause,” it does provide that just cause does not include the unilateral decision to alter a franchise for reasons unrelated to a breach, and that a rational business purpose is not enough to permit termination.
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.