Franchisor Representation: Termination of Franchisee/Dealer

A Maine-based manufacturer/distributor of automated storage retrieval systems was involved in a dispute with a Minnesota-based dealer whose contract our client recently did not renew after a 25 year-period of being a dealer. Described as a "fiercely contested arbitration" over "the substantial potential financial effect of a violation of a franchisee protection law," the matter required our attorneys’ creativity and assertiveness in establishing that our client had no liability to the Minnesota dealer.

In the case, the Arbitrator previously ruled that the Minnesota company was not protected by the Minnesota heavy equipment dealer law, but that the Minnesota dealer fell within the protections of the Maine franchise laws. In response to that order, with Verrill Dana’s help, our client proceeded to the Maine Legislature, which then amended the Maine Franchise Law to state explicitly that the statute applies only to dealers located in Maine and that amendment was to apply retroactively to all pending cases. The Arbitrator then ruled that this legislative amendment of the Maine Franchise Laws constituted an unconstitutional impairment of the Minnesota dealer’s contract. However, in July of 2011, our attorneys presented the case to the Arbitrator who ruled finally that “there is no franchise relationship between the parties, as required for the Maine Franchise Law. The termination of the Contract in a manner permitted by that Contract did not violate Maine law.”

This matter required the coordination of attorneys working with the Maine Legislature as well as those presenting the case in the arbitration hearing. It is a good example of both the skill and dedication of the Verrill Dana litigation team, their creativity in seeing an opportunity to amend the state statute, and a testament to Verrill Dana's ability to draw on the talents of many attorneys and practice groups to best serve our client's unique needs.