PHILADELPHIA — In a July 6 order, a federal judge in Pennsylvania cleared the way for defendant Marriott International Inc. to bring third-party claims in a lawsuit filed against the hotel franchisor by a sex trafficking victim; the same day, Marriott filed its third-party complaint against two Marriott franchisees and various accused sex traffickers (A.B. v. Marriott International Inc., No. 19-5770, E.D. Pa., 2020 U.S. Dist. LEXIS 117728).
PHILADELPHIA — A federal judge in Pennsylvania on June 19 ruled that transfer of a franchisors’ trade secret misappropriation lawsuit against franchisees to Delaware federal court is proper based on the Third Circuit U.S. Court of Appeals’ multifactor balancing test (Sweet Charlie’s Franchising LLC v. Sweet Moo’s Rolled Ice Cream LLC, No. 19-4618, E.D. Pa., 2020 U.S. Dist. LEXIS 107675).
CHICAGO — Finding merit to a franchisee’s assertion of incomplete discovery responses from franchisor The Halal Guys Franchise Inc. (THG) due to the involvement of self-interested parties implicated in the contract dispute, an Illinois federal magistrate judge on July 1 granted the franchisee’s motion to compel a second search for responsive documents (H Guys LLC v. The Halal Guys Franchise Inc., No. 1:19-cv-04974, N.D. Ill., 2020 U.S. Dist. LEXIS 115000).
HOUSTON — A lower court lacked jurisdiction over a Delaware franchisor of math and reading centers in a slip-and-fall lawsuit, a Texas appeals panel ruled June 30, reversing the denial of the franchisor’s special appearance and rendering judgment in its favor (Kumon North America Inc. v. Ngoc Vinh Nguyen, No. 14-18-00639-CV, Texas App., 14th Dist., 2020 Tex. App. LEXIS 4811).
CLEVELAND — Partly denying a motion to dismiss putative class claims brought by financial institutions (FIs) over a 2017 data breach experienced by Sonic Corp., an Ohio federal judge on July 1 found that the FIs sufficiently alleged that the fast food chain acted affirmatively in not updating the data security systems for the franchises that were affected by the breach (In re: Sonic Corp. Customer Data Security Breach, No. 1:17-md-02807, N.D. Ohio, 2020 U.S. Dist. LEXIS 114891).
SAN FRANCISCO — A California federal magistrate judge on June 30 partially granted a former employee’s motion for summary judgment against a franchisee after determining that the former employee met his burden of showing that he is entitled to overtime pay for hours worked in excess of eight hours per day (Decatuer Carter v. Jai-Put Enterprise Inc., et al., No. 18-6313, N.D. Calif., 2020 U.S. Dist. LEXIS 114299).
DETROIT — A chicken wings restaurant was denied a preliminary injunction on June 26 by a Michigan federal judge on claims for trademark and trade dress infringement and copyright infringement against another wings restaurant and its franchising company because many restaurants that serve chicken use circles or images of chicken in their logos (Eastpointe DWC, LLC v. Wing Snob Inc., et al., No. 19-13768, E.D. Mich., 2020 U.S. Dist. LEXIS 108526).
CINCINNATI — A Michigan federal judge’s preliminary injunction barring the former franchisees of four Little Caesars from operating their restaurants or from continued use of the Little Caesars trademarks was not an abuse of discretion, the Sixth Circuit U.S. Court of Appeals ruled June 25 in an unpublished order (Little Caesars Enterprises Inc., et al. v. Miramar Quick Service Restaurant Corp., et al., No. 19-1860, 6th Cir., 2020 U.S. App. LEXIS 19962).
ST. LOUIS — In consolidated appeals, the Eighth Circuit U.S. Court of Appeals on June 24 upheld the dismissal of lawsuits brought by 11 franchisees of Complete Nutrition Franchising for failing to assert their breach of contract and breach of the implied covenant of good faith and fair dealing claims under Nebraska state law (Donovan Middleton, et al. v. Complete Nutrition Franchising, LLC, et al., No. 19-2886; Herman Hourie, et al. v. Complete Nutrition Franchising, LLC, et al., No. 19-2887; Edgar Rojas, et al. v. Complete Nutrition Franchising, LLC, et al., No. 19-2888; Bright Future Holdings, LLC v. Complete Nutrition Franchising, LLC, et al., No. 19-2889; Vivify, Inc. v. Complete Nutrition Franchising, LLC, et al., No. 19-2890; Warrior Fitness & Nutrition, LLC v. Complete Nutrition Franchising, LLC, et al., No. 19-2891; Katherina Jerak v. Complete Nutrition Franchising, LLC, et al., No. 19-2893; M.G. Nutrition, LLC v. Complete Nutrition Franchising, LLC, et al., No. 19-2894, 8th Cir., 2020 U.S. App. LEXIS 19619).
SAN JOSE, Calif. — A California federal judge on June 25 granted a franchisor’s motion to dismiss with leave for the plaintiffs to amend their complaint alleging that the franchisor violated their rights under the Americans with Disabilities Act (ADA) by not offering counter services after a certain hour of the night because the plaintiffs failed to sufficiently allege that the franchisor owns or co-owns the restaurants visited by the plaintiffs (Jesse Zamora, et al. v. Wendy’s International LLC, No. 19-6133, N.D. Calif., 2020 U.S. Dist. LEXIS 111636).
CHICAGO — An Illinois judge on June 24 denied a preliminary injunction against McDonald’s Corp. and McDonald’s USA LLC but ordered an Illinois operation and a franchise owner to offer better protocols for employees in light of the COVID-19 pandemic (Taynarvis Massey, et al. v. McDonald’s Corporation, et al., No. 20 CH 4247, Ill. Cir., Cook Co.).
CHICAGO — A federal judge in Illinois on June 18 dismissed a 7-Eleven franchisee’s putative class complaint for wages filed against the franchisor, ruling that the profit-sharing agreement contained within the franchise agreement is based on sales only and is not a wage agreement (Niral Patel, et al. v. 7-Eleven, Inc., No. 18-7010, N.D. Ill., 2020 U.S. Dist. LEXIS 106827).
FRESNO, Calif. — A federal judge in California on June 19 granted final approval of a $4 million class settlement to be paid by a fast food franchisee to end claims over ads sent via text messages (Cory Larson, et al. v. Harman-Management Corporation, No. 16-219, E.D. Calif., 2020 U.S. Dist. LEXIS 107938).
MIAMI — A Florida federal magistrate judge on June 19 recommended denying a franchisor’s motion for a preliminary injunction in a dispute over a franchise agreement for food delivery services because the franchisor never provided any unique training to the franchisee (Delivery.com Franchising LLC v. Patrick Moore, No. 20-20766, S.D. Fla., 2020 U.S. Dist. LEXIS 108359).
ALAMEDA, Calif. — A McDonald’s in Oakland, Calif., was ordered to remain closed by a state trial judge on June 22 until a decision is made on a pending motion for temporary restraining order brought by current employees in their public nuisance and public health case asking that the franchise’s owners improve their COVID-19 safety protocols (Yamilett Olimara Osoy Hernandez, et al. v. VES McDonald’s, et al., No. RG20064825, Calif. Super., Alameda Co.).
ALAMEDA, Calif. — A McDonald’s restaurant franchisee should be ordered to remain closed because the restaurant failed to take necessary precautions against the spread of COVID-19, which resulted in the spread of the novel coronavirus to a number of employees and the employees’ families, and failed to provide its employees with proper personal protective equipment or information to combat the spread of the virus, the employees say in a June 16 complaint and an application for a temporary restraining order, both filed in California state court (Yamilett Olimara Osoy Hernandez v. VES Mc Donald’s, et al., No. RG20064825, Calif. Super., Alameda Co.).
CHICAGO — Investor plaintiffs claim in a June 18 complaint filed in an Illinois federal court that the managing members of a company formed to operate franchised restaurants in Chicago breached their fiduciary duties by failing to properly manage the fast-food franchise restaurants, which resulted in the termination of the franchise agreements, and by misappropriating the investors’ funds (George B. Kim, et al. v. H Guys LLC, et al., No. 20-3588, N.D. Ill.).
CHARLESTON, S.C. — The president of Buzz Pop Cocktails Corp. LLC (BPCC) and a holding company were dismissed June 21 by a South Carolina federal judge in a trademark infringement lawsuit brought by a franchisor of alcohol-infused popsicles (Booze Pops LLC, et al. v. Real Estate Flipz, Inc., et al., No. 20-691, D. S.C., 2020 U.S. Dist. LEXIS 108321).
CHICAGO — The Seventh Circuit U.S. Court of Appeals on June 19 affirmed a lower federal court’s ruling that a professional liability insurer has no duty to defend against an underlying argument that its bank insured’s failure to timely notify the operator of a Taco John’s restaurant franchise of a default on rent caused it to incur damages (Market Street Bancshares, Inc. v. Federal Insurance Company, doing business as Chubb Group of Insurance Companies, No. 18-3395, 7th Cir., 2020 U.S. App. LEXIS 19212).
CAMDEN, N.J. — 7-Eleven Inc. did not owe a duty of care to an employee of one of its New Jersey franchised stores involved in an armed robbery, a New Jersey federal judge ruled June 18, granting summary judgment to the franchisor in the employee’s negligence lawsuit (Adil Boutahli v. 7-Eleven, Inc., et al., No. 16-1186, D. N.J., 2020 U.S. Dist. LEXIS 106709).