California Supreme Court Denies MBE/UPS Review of Decision

SAN FRANCISCO (Blue MauMau) - On August 20, 2008, the Supreme Court of California denied Mail Boxes Etc petition to have the appeals court decision reviewed. The California Court of Appeals issued its ruling in favor of the MBE and UPS franchisees on May 23, reversing the decision of the trial court that granted the franchisor's motion of summary judgment to all causes of action.

The lawsuit (G.I. McDougal, Inc. v. MBE) was filed on behalf of three franchise operators under the Platinum Shield Association, one of three groups litigating against Mail Boxes Etc. The franchisees claimed that UPS withheld crucial information and made misrepresentations in persuading them to convert to its new concept, The UPS Store, following its acquisition of Mail Boxes Etc in 2001.

On selected claims made in the legal pleadings, the judge had ruled that MBE did not satisfy their burden of proof and that the franchisees did create triable issues. The appellate court stated, "In light of our findings . . .we need not deal with the remaining causes of action. We reverse the [trial court] judgment."

According to Howard Spanier, president of Platinum Shield Association, his understanding is that the Supreme Court, as a rule, does not issue any written decision in denying petitions to review. He said, "It only states that it is denied."  He also explained that the scheduled action now for the remittitur--an order sent back to the appeals court judge limiting the scope of its decision--is September 9, 2008.  Although their status conference is scheduled for September 3, Spanier said they were hopeful that the appellate judge will receive their "immediate remittitur" by that date. He added, "If he does receive it, a trial date could possibly be set."

MBE spokesperson Rich Hallabrin said according to their in-house counsel they knew when they petitioned the California Supreme Court that they would refuse to review it. He explained, "The reason was simply because they are facing a high number of cases on their docket."  He said that they tend to look at those that will somehow have an impact on existing law or those with an issue of public policy. "They are very selective in which cases they review." 

But Hallabrin added, "It is not necessarily an endorsement or a validation of the lower court, but basically it does have that effect." Hallabrin said, according to their counsel, it doesn't in anyway change the company's position or plans in other litigation where cases are pending.

Attorneys from the Gordon & Rees law firm representing the MBE franchisees did not return phone calls.

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Related article:

Appeal Court Reverses Decision, Sends Mail Boxes Etc. to Trial