Judge Dismisses Federal Claims against Quiznos without Prejudice
The lawsuit was filed as a class action by six Illinois franchisees on April 19, 2007, against Quiznos and its related entities. But it also named two corporate officers and six of the company's Illinois employees. The group claimed they have all suffered losses in connection with the franchise agreements they signed with Quiznos, and alleged ten claims of action. They asserted violations of Racketeer Influenced and Corrupt Organizations Act (RICO), the Sherman Act, the Illinois Antitrust Act, the Illinois Franchise Disclosure Act of 1987, and the Illinois Consumer Fraud and Deceptive Business Practices Act. Their claims also included that of common law fraud, breach of contract and breach of covenant of good faith and fair dealing.
Quiznos moved to dismiss all their claims on June 8, 2007.
Judge Pallmeyer went through each of the ten claims asserted by the franchisees, in explaining her decision. She also showed the comparisons between the Illinois action and the Wisconsin litigation, stating they were almost identical. She states that Quiznos is correct that, in light of
the explicit and comprehensive disclosures in the UFOC and Franchise Agreement, plaintiff franchisees cannot sustain any claim predicated on the contractual terms in question and dismisses Counts I and II (RICO), III (Sherman Act), IV (Illinois Antitrust Act), and VII (common law fraud). She states, "This includes all of Plaintiffs’ federal claims. In general, when all federal claims have been dismissed prior to trial, the trial court should leave the pendent claims to the state courts."
Quiznos Pleased with Decision; Plans More Energy Toward Franchisee Profitability
Richard Emmett, Quiznos' Executive VP and Chief Counsel, said they are obviously very pleased with the decision. "It's what we expected. It is totally consistent not only with what we thought but with what Judge Griesbach ruled in Wisconsin." He added that this is the third case that has been dismissed, one which was voluntarily dismissed by the plaintiff's themselves without the court even taking into account any discovery. Emmett said, "Now multiple courts have determined that a cause of action just wasn't stated. So we are pleased with the result, but we are even more pleased to hopefully have this behind us." Emmett said they can now spend more time and energy toward increasing franchisee profitability. He concludes, "That has been our goal all of last year, all of this year and into the future. That's what we want to concentrate on."
Franchisees Will Vigorously Pursue State Claims
But in view of this latest decision, Justin Klein, Marks & Klein, attorney for the six Illinois franchisees, said they were evaluating their options with respect to the federal claims the judge dismissed. "It is critical to understand that the court dismissed them "without prejudice" and has ordered the plaintiffs to file an amended complaint by April 21," Klein said. And he continued, "As we did in Wisconsin, we will take the judge’s advice and vigorously pursue our state claims, including those alleging violations of Illinois' Franchise Disclosure Act and its Consumer Fraud and Deceptive Business Practices Act."
Judge Daniel's recent decision in Colorado stated that Colorado's consumer fraud statute applied to their franchisees there, and Klein said they see no meaningful distinction between the Colorado Consumer Protection Act and what is set out by the Illinois Legislature. He explained, "Indeed, Judge Pallmeyer states in her decision that these claims are "not obviously flawed" and instructed us to proceed with them along with our other state law claims. As I have stated in the past, our legal team will continue to fight for the Quiznos franchisees until they receive justice--wherever that fight has to be fought and on whatever terms. Real injuries occurred here to real people and the law is on our side."
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Related readings:
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| Judge Pallmeyer Decision.PDF | 66.18 KB |
