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The Franchise Memorandum

Ohio Federal Court Denies Wendy's Second Motion to Dismiss Franchisee's "Lock-In" Tying Claim
Posted in Antitrust

In September 2009, The GPMemorandum reported that an Ohio federal court had denied the motion of Wendy’s International Inc. to dismiss a claim by several of its franchisees that Wendy’s had violated Section 1 of the Sherman Act by requiring the franchisees to purchase food supplies only from sellers in which Wendy’s had a financial interest. Burda v. Wendy’s Int’l, Inc., 659 F. Supp. 2d 928 (S.D. Ohio 2009). The court held that the franchisee-plaintiffs had sufficiently alleged that Wendy’s had market power in the tying product market under the “lock-in” theory discussed in Eastman Kodak Co. v. Image Technical Serv., Inc., 504 U.S. 451 (1992).

The court recently again denied Wendy’s motion to dismiss the tying claim in Burda v. Wendy’s International Inc., No. 2:08-cv-00246 (S.D. Ohio Oct. 25, 2010). This motion grew out of the withdrawal of the plaintiffs’ counsel of record. Thereupon, one of the plaintiffs, Robert Burda, who is also a lawyer, indicated that he would step in and represent himself and the other plaintiffs. Burda, however, neglected to file a notice of appearance within the time allowed by the court, and Wendy’s moved to dismiss the amended complaint on that basis. The court denied the motion, noting that dismissal would be improper because “Burda’s violation of the Court’s Order was more a technical than a substantive violation, and because Defendants are not prejudiced by Burda’s failure to file the Appearance of Counsel in a timely fashion[.]”  

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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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