Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—N.D. Ohio: Wine distributor secures remand after showing how it would cure pleading, (Sep 9, 2026)

By Justin Marcus Smith, J.D.

Failure to plead an agreement in an Ohio Alcoholic Beverage Franchise Act dispute did not doom a motion for remand if the plaintiff could show it had a colorable basis for amending that another distributor had a protectable interest.

In a dispute about the purported termination of a long-time Ohio wine distributorship, the federal district court in Akron, Ohio, held it must read all disputed facts and ambiguities in favor of remand, after having previously granted the defendant-manufacturer’s motion for removal. Although the plaintiff wine distributor failed to allege an agreement between the manufacturer and a new distributor, the plaintiff provided set forth a colorable basis for finding that the purported new distributor had a legally protectable interest in the action. The potential for amending the complaint with facts implicating the new distributor in an agreement with the manufacturer suggested the new distributor was a necessary party to the action and was not fraudulently joined. However, the legal and factual context was not so clear that the plaintiff could justify an award of attorney’s fees for improper removal (Esber Beverage Company v. Vinarchy North America, No. 5:26-cv-00308-SL (N.D. Ohio. Sep. 4, 2026)).

Background. In 2025, Vinarchy North America, Inc. (Vinarchy), the putative successor-manufacturer of Pernod Ricard wines, sent a franchise termination letter to Esber Beverage Company (Esber), a family-owned Ohio exclusive beverage distributor. The termination letter allegedly requested Esber’s sales information for the prior three years so the parties could engage in statutorily-mandated diminished business value negotiations.

After business valuation negotiations stalled, Esber filed a complaint seeking a declaration (1) that Vinarchy’s “attempted termination” and award of the Esber franchise to Heidelberg Distributing Company (Heidelberg) in Esber’s territory was unlawful; (2) that any purported transfer of certain disputed Pernod Ricard brands (the brands) to Vinarchy was not a “successor manufacturer” transaction under Ohio’s strict Alcoholic Beverage Franchise Act (OABFA), Ohio Rev. Code § 1333.82 et seq., such that Vinarchy could not terminate Esber’s franchise “without cause”; and (3) that Ohio Rev. Code § 1333.851 did not apply because no “successor manufacturer” transaction occurred, hence Vinarchy could not transfer the disputed brands to Heidelberg.

Without Heidelberg’s consent, Vinarchy invoked the diversity jurisdiction requirements pursuant to 28 U.S.C. § 1331(a) and removed the action to federal court pursuant to 28 U.S.C. § 1441. Vinarchy argued Heidelberg did not have a legally-protectable interest in the outcome of the case, that Heidelberg was not a necessary party, and that Esber therefore fraudulently joined Heidelberg to the action.

Esber moved for remand on the basis that Heidelberg was not fraudulently joined and that removal was improper because the complaint raised no federal claims. Vinarchy bore the burden of establishing that removal was proper insofar as Vinarchy was the removing party. Esber did not dispute that Heidelberg must have a legally protectable interest to be a necessary party in this declaratory judgment action. The colorable-basis analysis turned on whether Heidelberg’s interest in the action was protected by law.

No agreement. Esber failed to allege an agreement between Vinarchy and Heidelberg. The complaint only mentioned Heidelberg in four paragraphs. Those four paragraphs all referenced Vinarchy’s inchoate desire to transfer the disputed brands to Heidelberg. There was no existing or impending transfer to Heidelberg. However, that did not necessarily doom Esber’s motion if it could set forth a colorable basis for finding that it could plead the existence of a contract between Vinarchy and Heidelberg in an amended complaint.

Colorable basis. The court held Esber provided a colorable basis for amendment in its remand briefing. Specifically, the court found Esber’s factual submissions indicated conduct consistent with a franchise distribution agreement between Vinarchy and Heidelberg. For example, a representative of Heidelberg emailed Esber hoping to “address a path” for brand transition to Heidelberg. Two days later, Vinarchy filed product registration forms and territory designation forms with the Ohio Department of Commerce, Division of Liquor Control, designating Heidelberg as Vinarchy’s exclusive distributor of the brands in Ohio.

The court found those facts sufficiently indicated, for a colorable-basis analysis, that Esber would be able to allege, in an amended complaint, that Vinarchy and Heidelberg entered into a franchise agreement for Heidelberg to distribute the brands in Esber’s exclusive territory.

Insofar as Esber set forth a colorable basis for finding that Heidelberg had a legally protectable interest in the action, the court held Heidelberg was a necessary party to the action and was not fraudulently joined.

Vinarchy argued that because Esber was seeking a declaration that Vinarchy was not a successor manufacturer, Vinarchy could not transfer the brands at all if Esber made its case. The court deemed that argument “backwards.” The court reasoned that Heidelberg had a legally protectable interest precisely because Esber was trying to invalidate a purported contract to which Heidelberg was a party.

Vinarchy said it could not authorize Heidelberg to distribute the brands in Esber’s territory until the termination of Esber’s franchise, but the court said this argument failed because Vinarchy’s lack of authorization did not negate the existence of an agreement that might be affected by the disposition of the action. It was up to Vinarchy to disprove the existence of such agreement, but the court had to construe the uncertainties in favor of Esber as the plaintiff.

Vinarchy argued next that post-Rumpke decisions precluded the possibility of a colorable claim against Heidelberg. See Rumpke Sanitary Landfill, Inc. v. State, 941 N.E.2d 1161, 1165 (Ohio 2010). Rumpke clarified that only those legally affected by a potential declaratory judgment are proper parties. The court found the post-Rumpke cases were all distinguishable. Without on-point case law, the court said it had to resolve all ambiguities in the controlling state law in favor of remand.

Last, Vinarchy argued, too broadly, that a Sixth Circuit decision negated any legally-protectable interest a new distributor would have in an action to declare a manufacturer not a successor manufacturer. See Tri Cnty. Wholesale Distribs., Inc. v. Labatt USA Operating Co., 828 F.3d 421 (6th Cir. 2016). The court distinguished that there was no evidence that the manufacturer and new distributor in that case had yet formed a franchise agreement covering the old distributor’s territory. Moreover, no party raised, and the Sixth Circuit did not address, the issue of whether the new distributor had a legally protectable interest in the action.

Remand. After applying the facts Esber set forth to the colorable-basis analysis, the court held it must read all disputed facts and ambiguities in controlling law in favor of remand. However, it was a sufficiently close call that Esber had no basis for an award for attorney’s fees. Vinarchy had an objectively reasonable basis for attempting to remove the case, even if that attempt was ultimately unsuccessful.

The court distinguished a case Esber cited for attorney’s fees. That case preceded Rumpke, the plaintiffs asserted additional claims for injunctive relief and unjust enrichment, and the case specifically recognized that a similar suit brought in the successor manufacturer context might be different. The court continued that even if the case had been directly on-point, Vinarchy’s decision to remove was “still objectively reasonable based on the complaint and the clarity of the law.” Again, Esber’s complaint did not sufficiently allege an agreement between Vinarchy and Heidelberg, and Ohio law on legally protectable interests post-Rumpke was “at least ambiguous on some salient points.”

The court rejected Esber’s argument that Vinarchy failed to mention it had filed territory designation forms when it removed the action. Esber did not say whether it was unaware of the filings when it filed its complaint. Again, the court could not say Vinarchy lacked an objectively reasonable basis for removing the action. The court denied Esber’s request for attorney’s fees.

The Case is No. 5:26-cv-00308-SL.

Judge: Lioi, S.

Attorneys: Alisa L. Wright (Roetzel & Andress) for Esber Beverage Co. James B. Niehaus (Frantz Ward) for Vinarchy North America, Inc.

Companies: Esber Beverage Co.; Vinarchy North America, Inc.

Cases: FranchisingDistribution OhioNews