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The Franchise Memorandum

Distributor's Antitrust Claims Dismissed on Summary Judgment
Posted in Antitrust

The United States District Court for the District of Colorado granted summary judgment dismissing seven claims of federal and state antitrust violations brought by a distributor of DuPont's automobile paint coatings. ITS Choice Enters., Inc. v. E.I. DuPont De Nemours Sr Co., 2014 U.S. Dist. LEXIS 24332 (D. Colo. Feb. 26, 2014). DuPont provided various forms of assistance to its distributors and, in exchange, each distributor agreed not to solicit existing business from other distributors. Between 2008 and 2009, DuPont gave significant financial assistance and other support to Metro Paint, a distributor that competed with plaintiff JTS Choice, by enabling Metro Paint to acquire an existing DuPont distributor in Colorado. Following the acquisition, Metro Paint began aggressively soliciting JTS Choice's customers without interference from DuPont.

The court granted DuPont's motion on the grounds that JTS Choice failed to prove antitrust injury. While JTS Choice may have lost customers to Metro Paint, the court found it was not due to predatory pricing or any other anticompetitive practice; rather, the evidence showed a robust market in the Denver area in automotive coatings both before and after Metro Paint's entry. The court grounded its decision on the longstanding principle that the "[a]ntitrust laws were not intended to protect a particular distributor; they protect the public and overall inter-brand competition."

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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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