Scott McIntosh, Partner

Representative Matters

SUCCESSFUL DISPOSITION OF PUTATIVE CLASS ACTIONS OR COMPLEX MULTI-PARTY ACTIONS

Dismissal of Putative Franchisee Class Action
Following the offering of a new form of franchise agreement, franchisees filed a putative class action on behalf of all franchisees in the system against their franchisor. The complaint asserted claims for breach of contract and fraud. We successfully moved for dismissal of the putative class action.

Dismissal of Antitrust Claims for Monopolization or Attempted Monopolization
We successfully obtained dismissal of claims under the Sherman Antitrust Act by multiple plaintiffs asserting that defendants were monopolizing or attempting to monopolize the private club software market. In connection with obtaining dismissal of the claims under the Sherman Antitrust Act with prejudice, we obtained dismissal of the remaining claims based upon mandatory forum selection clauses and improper venue arguments.


INJUNCTION-RELATED SUCCESSES

Enforcing Non-Compete Agreements from Date of Injunction, Rather than Termination Date of Franchise Agreements
After the issuance of the Court’s injunctions whereby the Court granted our request to enjoin defendants and those acting in concert or participation with them from operating a competing business for a period of two years beginning on the date of the Court’s Order, defendants filed a motion for relief from the Court’s Order. Defendants argued that the Court improperly extended the term of the non-compete beyond the two years provided for in the franchise agreements. The Court agreed with our argument that it was justified in extending the non-compete agreements beyond the two-year term as set forth in the franchise agreements because defendants, and those acting in concert with them, were actively engaged in competition in violation of the franchise agreements and the Court’s injunctions following termination of the agreements.

Avoidance of Injunction to Preclude Termination of U.S. Distributor
After a foreign medical device manufacturer provided notice that it was terminating the distributor agreement with its U.S. distributor, the U.S. distributor brought a claim for declaratory and injunctive relief to preclude the termination. After we successfully defeated the U.S. distributor’s motion for preliminary injunction that sought to preclude its termination, we obtained a dismissal of the U.S. distributor’s complaint.

Injunction to Preclude Franchisee from Unilaterally Terminating Its Franchise Agreement
When a franchisee unilaterally declared its franchise agreement terminated, removed its signage, and sought to run a competing business, we obtained a temporary restraining order enjoining the purported unilateral termination and requiring the franchisee to re-install its signs. Subsequently, we obtained a preliminary injunction precluding the franchisee from unilaterally terminating its franchise agreement, contrary to the provisions of the franchise agreement.


SUCCESSES IN OBTAINING DAMAGE AWARDS FOR FRANCHISORS OR IN ENFORCING SETTLEMENT TERMS

Award of Royalties for Remaining Term of Franchise Agreement When Franchisee Abandoned its Franchise
When a franchisee abandoned its franchise prior to the end of the term of its franchise agreement, we successfully obtained an award of fees that would have been paid by the franchisee during the remaining term of the franchise agreement, together with an award of attorneys’ fees and arbitration expenses.


SUCCESSFUL ENFORCEMENT OF DISPUTE RESOLUTION PROVISIONS

Franchise Act Did Not Preclude Enforcement of Forum Selection Provision
Notwithstanding the mandatory forum selection clauses in their franchise agreements, plaintiff franchisees filed a complaint in federal court in Washington alleging various causes of action, including a claim for violation of the Washington Franchise Investment Protection Act (“FIPA”). We moved to dismiss or transfer based upon the mandatory forum selection provisions in the franchise agreements. Plaintiffs opposed enforcement of the mandatory forum selection provisions, arguing that such provisions contravene the public policy reflected in FIPA. The Court agreed with our argument that FIPA did not bar enforcement of forum selection provisions mandating venue outside of Washington and transferred the case to the forum specified in the franchise agreements.

Enforcing Arbitration Provision in Franchise Agreement
A franchisee filed a declaratory judgment action in court in an effort to avoid the mandatory forum selection provision in its franchise agreement. We moved to compel arbitration and filed an arbitration demand. After successfully defeating the franchisee’s motion to enjoin the arbitration proceeding, we obtained an order compelling the franchisee to arbitrate the dispute with its franchisor.