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The Franchise Memorandum

Maine Federal Court Denies Injunction to Prevent Termination of Dealership
Posted in Terminations

Holding last month that the Maine Franchise Act does not create a “new set of standards” for temporary restraining order and injunction requests, the United States District Court for the District of Maine refused to stop the termination of a heavy equipment dealership in Frank Martin Sons, Inc. v. John Deere Construction & Forestry Co., 2008 WL 787680 (D. Me. March 21, 2008). The court instead applied a standard test weighing factors such as the plaintiff’s likelihood of success on the merits and alleged irreparable harm.

The plaintiff’s main argument was one made often – that termination was not allowed if the supplier had not terminated other dealers in the same situation. The plaintiff wanted the court to read the statutory language about renewal “on terms then equally available to all its distributors or dealers” to trump the “good cause” language allowing termination and non-renewal. The court held that the plaintiff’s reading of the Maine statute to prohibit a termination for good cause “would make little sense.”

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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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