Conflicting Court Decisions Likely to Confuse Future Franchisee Plaintiffs
Several recent court decisions have reached conflicting conclusions regarding the enforcement of the class action bar for franchisees. It appears " the enforceability of the class action bar provision in franchise agreements may be determined more by where a franchisor gets sued than the language of its franchise agreement."
Two cases involved Quiznos and a third case was against Melt Franchising.
In each case the plaintiffs argued that enforcement of the class action bar was unconscionable. While the disparity in the opinions in these cases may raise some eyebrows, it is the disparity in their analysis that is perhaps most startling. — International Law Office (you can click on link only ONCE, thereafter link will not bring you to story)
What are the consequences of these conflicting opinions for franchisees in the future?
Quiznos franchisees thrown in two different directions
Richard, I am not sure I follow. This story describes two Quiznos cases arguing the same issues and laws but filed in two different jurisdictions. These separate courts then reviewed the lawsuits and, again using the same laws to determine the case, used different reasoning to come to two completely different conclusions. No "competent" lawyer could have helped here (although, I guess, either way they would have been correct!)
This story is about how where you file is just as important as the legal issues of the case. The legal issues in both cases were very similar and the laws cited were exactly the same yet two separate district courts came to opposing conclusions.
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A competent lawyer will deteremine if there are conflicts on
significant issues as part of her due diligence on where/whether to file. Different positions on the same issue depending upon the venue is something experienced trial lawyers are accustomed to deal with.
Of course, you could save the legal fees by not retaining competent counsel and making such decisions for your own self, couldn't you?
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Where to file?
But Richard, when you aren't sure where to file, don't you just file in multiple jurisdictions with different plaintiffs and then when you get the ruling that you want you make the other lawsuits parties in the class action of the 'preferred' suit.
What I didn't see in that link was that at least one of the two Quizno's cases was transferred to Illinois and were part of the big class action settlement talked about on here (even though the IL suit was filed after the CO suit). I'm guessing that the franchisee attorneys in the Quizno's case could care less at this point, because with the $10mil in the bank, they are probably enjoying that.
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Right, JD, if you are lucky enough to get that kind of timing
and sequencing. Filing multiple class actions may get you sent to the Judicial Panel on Multi District Litigation which will send everything to one place - assuming all are filed in the Federal Court system.
On the $ 10,000,000 fees, knowing a little bit about who is involved, we may see the lawyers fighting over its division. These guys aint gong to Muldoons for fellowship if they think they might get an extra dime out of further contention.
I am old enough to remember the good old days of antitrust class action litigation following government price fixing cases. The guys in those fights would commit their mammas to a pesthole over a few bucks.
I remember than in the folding carton and corrugated shipping container cases, how they went after Steve Sussman here in Houston, who Federal Judge Carl Bue made the lead class counsel. The stuff they tried to use to bully Steve off of position was rough, to put it nicely. The lead sharks come at you by saying that if you just step aside, they will trhow you a lot of work that you can get paid for when it settles out. If you fall for that, you get little or nothing and when divvy time comes around the would try to put it to you. The Mafia was just a bunch of pansies compared to these people.
Sussman is one of the best of the best and did/does not take bullying from anyone. Of course it does't hurt that he is from Texas.
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Different laws applied
The 2 Quiznos court cases didn"t apply the same laws. One applied state law that denied certification of the class, deciding that the contract provision was allowable under state law. The other court applied federal law, which the court decided allowed it to ignore the contract prohibition against class actions in the franchisen agreement.
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Re: Different Laws Applied
You are correct. "Two months after the Bonanno decision, the US District Court for the District of Western Pennsylvania issued its decision in Martrano, which involved an almost identical set of allegations. It rejected the Colorado court's analysis and held that federal law, not state contract law, governs the enforceability of the class action bar provision." Lexicology
But, again, with two federal district courts at odds with regard to what laws to use leaves franchisees in a lurch. Am I correct in thinking this may have to go all the way to the Supreme Ct for determination?
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The remedy for frachisee confusion regarding this and any
other legal issue is simply for frachisees to seek advice regarding the issues from competent attorneys. DUH!