Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D. Ind: Transfer of venue granted in claims by Noble Roman’s franchisor, (Oct 26, 2015)

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

A motion to transfer venue, in a breach of contract and deception action brought by a franchisor against a franchisee and its owners, was granted by the federal district court in Indianapolis. The court granted the motion after determining that both the “convenience” factor and the “interest in justice” factor weighed in favor of the transfer (Noble Roman’s, Inc. v. B&MP, LLC, October 22, 2015, Lawrence, W.).

Background. Bradley Perdriau, on behalf of B&MP, LLC, entered into two franchise agreements with Noble Roman’s Inc. to operate a Noble Roman’s franchise and a Tuscano’s franchise in Bloomington, Illinois. The term of the agreements was ten years. After two years, B&MP was involuntarily dissolved. Since then, Bradley and Leslie Perdriau continued to purchase ingredients from Noble Roman’s and to operate the Noble Roman’s franchise pursuant to the franchise agreement.

Noble Roman’s asserted claims of breach of contract and deception against the defendants on the basis that they: (1) owed royalty fees; (2) intentionally misreported their weekly sales for purposes of avoiding payment of royalty fees; (3) used ingredients purchased from Noble Roman’s in non-Noble Roman’s products; and (4) violated the non-competition provisions of the franchise agreements by selling non-Noble Roman’s and non-Tuscano’s products within a one-mile radius of the location. Noble Roman’s also asserted a claim for making “a false or misleading representation of fact.”

Before the court was the defendants’ motion to transfer venue to the Northern District of Illinois.

Transfer of Venue. The court determined that transfer of venue was appropriate pursuant to 28 U.S.C. §1404(a). The court noted that 28 U.S.C. §1404(a) permits, for the convenience of the parties and the witnesses, and in the interest of justice, transfer of any civil action to any district where it might have been brought.

The court determined that the “convenience” factor weighed in favor of the defendants because the acts that they were accused of occurred in Illinois. The other two considerations, travel and the availability and access to witnesses, were neutral because neither side demonstrated a greater burden if it did not get its choice of forums and each sides’ witnesses were located in their preferred forum.

The “interest in justice” factor also weighed in favor of transfer since the court’s docket was slightly more congested than the Northern District of Illinois’s docket. The courts’ relatively familiarity with the law was neutral because the state law applicable to the case was not complex or unique.

Finally, the court found that “the respective desirability of resolving controversies in each locale” and “the relationship of each community to the controversy” weighed strongly in favor of the defendants because: (1) the Illinois Franchise Disclosure Act recognized the state’s strong interest in protecting Illinois residents who become franchisees; and (2) Illinois had a far stronger relationship with the controversy because the activities took place in Illinois.

The case is No. 1:14-cv-206-WTL-MJD.

Attorneys: Curtis T. Jones (Bose Mckinney & Evans, LLP) for Noble Roman's Inc. Glenn R. Gaffney (Gaffney & Gaffney PC) for B&MP, LLC.

Companies: Noble Roman's Inc.; B&MP, LLC

Cases: FranchisingDistribution IndianaNews