Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—Wis. App.: Golf pros’ contracts to run city courses not dealerships, (Aug 26, 2016)

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

A Wisconsin trial court’s dismissal of a lawsuit, which alleged that the City of Madison’s non-renewal of golf pro contracts to run city-owned golf courses violated the Wisconsin Fair Dealership Law, was affirmed by a state appellate court. The appellate court determined that golf pros’ arrangement with the city did not satisfy either the "goods or services" or "commercial symbols" element of the dealership law (Benson v. City of Madison, August 25, 2016, per curiam).

Several golf pros, whose contracts to run city-owned golf courses for the city of Madison were not renewed, sued the city under the Wisconsin Fair Dealership Law. The trial court determined that the golf pros did not have dealerships under the meaning of the dealership law and dismissed the action.

Liberal construction of dealership law. As an initial matter, the appellate court addressed the golf pro’s reliance on the statutory directive that the dealership law be "liberally construed and applied to promote its underlying remedial purposes and policy." After noting that the Wisconsin Supreme Court had rejected the proposition that the courts use this construction rule to take an expansive approach to the threshold question of whether a dealership exists, the appellate court concluded that the liberal construction directive did not apply to the question of whether a dealership exists.

Definition of "dealership." The appellate court then turned to the elements required to satisfy the definition of a "dealership." Although the parties disputed whether a municipality is subject to the dealership law, the court found it unnecessary to address the issue because it concluded that the golf pros were not granted the right to sell or, in the alternative, distribute city "goods or services" or city "commercial symbols."

The appellate court noted that the dealership law did not provide a technical definition of "goods" or "services", or what it meant to be "granted the right" to sell or distribute a grantor’s goods or services. It further noted that the operating agreements between the golf pros and the city expressly stated that the golf pros were not granted the right to sell or distribute any goods or service provided by the city. Based on this express language and its determination that the golf pros were providing non-city goods and their own professional services, the appellate court concluded that the golf pros were not granted the right to sell city "goods or services", within the meaning of the dealership law.

With respect to commercial symbols, the appellate court found that: (1) the parties’ operating agreements expressly stated that the golf pros did not have the right to use a city trade name, trademark, service mark, logotype, advertising, or other commercial symbol; and (2) the golf pro’s actual use of city marks, whether contemplated by the agreement or not, was minimal.

The case is No: 2015AP2366.

Attorneys: Kevin J. Palmersheim (Haley Palmersheim, SC) for Thomas F. Benson. Michael P. May (Michael P. May, Attorney at Law) and Catherine Rottier (Boardman & Clark LLP) for City of Madison.

Cases: FranchisingDistribution WisconsinNews