Franchise Terminations, Girl Scouts, Homosexuals, and the Yom Kippur War

If you thought you’d seen everything as a franchisee lawyer, then here is a case where the state’s franchise relationship law was given a very expansive and biting interpretation.

And, the Court found that the state law had been violated by the Girl Scouts of America in cutting the territory of one of its Local Council’s territory by 75%. However, the federal court went on to conclude that the First Amendment trumped the Wisconsin Dealership Law. Along the way, the Court visited homosexuals, constructive terminations, First Amendment constitutional jurisprudence, the Wisconsin Dealership Law, The Girl Scout credo of being “honest and fair”, the “good cause” standard, the NAACP, the covenant of good faith and fair dealing, the Yom Kippur War, and national gasoline shortages during times of war. Just when you thought a franchisee was going to win one.

In GIRL SCOUTS OF MANITOU COUNCIL V. GIRL SCOUTS OF AMERICA (pdf, pg 1 of 89), Eastern District of Wisconsin  Judge J.P. STADTMUELLER ordered:

The Girl Scout Law is a pledge ritualistically recited and “shared by every member” of the Girl Scouts of the United States of America (“Girl Scouts” or “GSUSA”), the defendant in this action. See Girl Scouts of the United States of America, Girl Scout Promise and Law, http: //www.girlscouts.org/program/gs_ central/promise_law (last visited March 31, 2010). The Girl Scout Law, described by the GSUSA as the “credo of girl scouting,” entails the ten tenets each scout must strive to fulfill in their daily lives. Id. In relevant part, the Girl Scout Law requires that every member must do their “best to be honest and fair.” Id. The plaintiff, Girl Scouts of Manitou Council, Inc. (“Manitou”), an organization that provides Girl Scouting to seven counties in eastern Wisconsin, contends that the national organization of the Girl Scouts has not been loyal to the terms of its own Law, in that the GSUSA has not been “honest and fair” in its dealings with the Manitou Council. Specifically, Manitou argues that GSUSA, acting pursuant to a national strategy that would eventually merge the council into a larger regional council, has violated the Wisconsin Fair Dealership Law (“WFDL”), Wis. Stat. § 135.01, breached the terms of the charter that created the council, and committed several related torts. (Docket # 120). After extensive discovery, on August 31, 2009, GSUSA, asserting that there were no genuine issues of material fact necessitating a trial in this case, moved pursuant to Fed.R.Civ.P. 56 for a summary judgment in its favor on all counts of Manitou's Second Amended Complaint (“complaint”). (Docket # 134). On that same day, Manitou moved for summary judgment in its favor on the breach of contract claim and the WFDL claim. (Docket # 141). After reviewing the voluminous record, consisting of hundreds of pages submitted by each party, and consulting the relevant law, the court is now prepared to make a ruling on the parties' cross-motions for summary judgment.

GIRL SCOUTS OF MANITOU COUNCIL INC., Plaintiff,
GIRL SCOUTS OF the UNITED STATES OF AMERICA INC., Defendant.
No. 08-CV-184., March 31, 2010