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Ninth Circuit Holds Washington Franchise Statute Does Protect California Franchisee

In contrast to the Minnesota district court ruling discussed in the previous summary, the United States Court of Appeals for the Ninth Circuit last week ruled that the Washington Franchise Investment Protection Act (FIPA) does apply to protect a non-Washington franchisee. Red Lion Hotels Franchising, Inc. v. MAK, LLC, et al., 2011 U. S. App. LEXIS 24152 (9th Cir. Dec. 7, 2011). Reversing in part a Washington federal court’s grant of summary judgment, the Ninth Circuit remanded the case to the district court to determine the merits of the FIPA counterclaims brought by a California-based franchisee against its franchisor, which was based in Washington. The FIPA “franchisee bill of rights” must be applied by the lower court, according to the Ninth Circuit. The appellate court based its ruling on its analogy to past cases interpreting similar statutes and determining that they do apply if the defendant is an in-state entity.

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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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