Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—D.N.J.: “Targeted” franchisees entitled to receive 7-Eleven’s metadata, (Mar 20, 2015)

By Greg Hammond, J.D.

7-Eleven franchisees, claiming that they were “targeted” for franchise termination, are entitled to receive their franchisor’s metadata, consisting of the date of origination, author, custodian, date of each modification and author of each modification, and any data which establishes to whom the document had been electronically distributed, for various documents. The federal district court in Camden, New Jersey granted the franchisees’ motions to compel production of metadata, finding that 7-Eleven failed to demonstrate that it would suffer undue hardship or expense if compelled to produce the requested metadata (Younes v. 7-Eleven, Inc., March 18, 2015, Schneider, J.).

Various 7-Eleven franchisees filed suit against 7-Eleven, alleging that they were “targeted” for franchise termination. They contend that 7-Eleven wanted to “churn” its franchises to collect windfall franchise fees from new franchisees, and that it targeted franchisees that were vocal in their criticism of 7-Eleven. The plaintiffs also alleged that the franchisor targeted franchisees because of their national origin.

The case was before the court on the plaintiffs’ motions to produce metadata. While 7-Eleven had produced some documents, they lacked identifying information. Consequently, the plaintiffs sought the date of origination, author, custodian, date of each modification and author of each modification, and to the extent available, any data which established to whom the document had been electronically distributed.

The court first determined that the plaintiffs have demonstrated a particularized need for the requested materials. Specifically, the metadata was deemed plainly relevant and discoverable, and the data was further relevant to authenticating 7-Eleven’s own documents.

7-Eleven also failed to demonstrate it would suffer undue hardship or expense if it was compelled to produce the requested metadata. Nevertheless, the franchisor argued: (1) the parties originally agreed that documents only needed to be produced in PDF format without metadata; (2) 7-Eleven does not possess much of the requested metadata; (3) the metadata available is “extremely limited, minimally meaningful and potentially misleading”; and (4) it would unreasonably burdensome to require 7-Eleven to reproduce its documents with metadata.

The court rejected all four arguments, finding that, although the parties originally agreed not to request metadata, good cause existed to modify the agreement. Further, there was no justifiable reason, in the court’s view, to deny plaintiffs the “basic discovery” that could exist in the franchisor’s metadata, particularly when 7-Eleven has not offered to voluntarily provide the requested information. 7-Eleven’s availability argument was also rejected by the court, which noted that the franchisor was not expected to produce metadata that did not exist. Lastly, 7-Eleven’s burdensome argument was not convincing because the requested information was probative, and the franchisor failed to demonstrate that it would be unduly burdensome or expensive to produce the requested metadata.

The franchisees’ motions to compel were therefore granted and 7-Eleven’s cross-motions to bar the production of metadata were denied.

The case number is 13-3500 (RMB/JS).

Attorneys: Amy Robin Brandt (Weir & Partners LLP) for Sam Younes. Adrienne Noel Gittens (Duane Morris LLP) for 7-Eleven, Inc.

Companies: 7-Eleven, Inc.

Cases: FranchisingDistribution NewJerseyNews