Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D. Fla.: Bacardi’s declaratory judgment action against terminated distributor hard to swallow, (Mar 10, 2016)

By Michael Menzhuber, J.D., LL.M.

Bacardi U.S.A., Inc.’s attempt to obtain declaratory judgment that it did not violate the antitrust laws by terminating its business relationship with a distributor was rejected by the federal district court in Miami. The court dismissed the declaratory judgment action, finding that there were no facts suggestive of an actual or threatened injury (Bacardi U.S.A., Inc. v. Empire Merchants, LLC, March 9, 2016, King, J.).

After terminating its business relationship with former distributor Empire Merchants, LLC, Bacardi filed an action against Empire that sought declaratory judgment that there were: (1) no damages from termination of the business relationship; (2) no violation of the request for a proposed agreement; (3) no violations of Sections 1 or 2 of the Sherman Act; (4) no violations of the Robinson-Patman Act; and (5) no violations of Sections 3, 4 or 16 of the Clayton Act. Empire filed a motion to dismiss on the grounds that Bacardi had not pleaded the existence of a case or controversy.

The court found that that Bacardi’s amended complaint did not contain facts suggestive of an actual or threatened injury resulting from Empire’s conduct. Instead, the complaint merely concluded that a dispute exists “based on past experience” and “information and belief” so that to require Bacardi to await suit by Empire “would be a needless formality.” Although Bacardi contended that other terminated distributors often litigate in similar circumstances, the court concluded that: (1) speculation based on the dealings of other individuals does not present a concrete case or controversy; (2) Empire’s decision to remain quiet concerning future lawsuits did not create a current case or controversy; (3) a case or controversy is created by affirmative conduct; and (4) a declaratory judgment action may not be used as an anticipatory maneuver to preempt future actions.

The case is No. 16-cv-20074-KING.

Attorneys: Justin Scott Brenner (Hogan Lovells US LLP) for Bacardi U.S.A., Inc. George G. Mahfood (Broad and Cassel) and Jon A. Sale (Sale & Weintraub, P.A.) for Empire Merchants, LLC.

Companies: Bacardi U.S.A., Inc.; Empire Merchants, LLC

Cases: FranchisingDistribution Antitrust FloridaNews