AMTX Hotel Corporation v. Holiday Hospitality Franchising Inc.
Represented Holiday Hospitality Franchising, LLC (“Holiday Inn”) in defense of lawsuit brought by licensee, AMTX Hotel Corporation, related to alleged representations made by Holiday Inn regarding the renewal of plaintiff’s license and the licensing of additional Holiday Inn branded hotels in the Amarillo, Texas market. Holiday Inn prevailed on its motion to dismiss plaintiff’s claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel. The plaintiff's sole remaining claim in the lawsuit is its claim for fraud.
Pursued post-judgment collection against a judgment debtor on behalf of a wholesale distributor of construction materials.
Court Dismisses Franchisor’s CEO from Lawsuit Based on Plaintiffs’ Failure to State a Claim
A federal court dismissed the sole claim against the CEO for alleged violations of the DTPA because the franchisees failed to allege that the CEO engaged in any false, misleading, or deceptive acts or practices. Momentum Marketing Sales & Services, Inc. v. Curves Int’l, Inc.,
Business Franchise Guide (CCH), ¶14,215 (W.D. Tex. Jul. 28, 2009)
Franchisor Prevails on Motion to Dismiss Out of State Law Claims
A federal court ruled that Texas law trumped out-of-state statutory claims asserted by franchisees, even in states whose franchise statutes contained anti-waiver provisions, dismissing the out-of-state claims based on the Texas choice of law provision in the franchise agreements and on the “most significant relationship” test contained in the Restatement (Second) of Conflicts of Law. Momentum Marketing Sales & Services, Inc. v. Curves Int’l, Inc.,
Business Franchise Guide (CCH), ¶14,047 (W.D. Tex. Dec. 17, 2008).
Anti-Waiver Provisions in Franchisees' State Franchise Statutes Trumped by Texas Law
The federal court for the Western District of Texas dismissed all of the Curves franchisees’ causes of action based on the laws of their home states because Texas law, the law of the franchisor’s location and the law set forth in the choice of law clauses, applies. In this consolidated action, several Curves franchisees located across the United States asserted twenty-six non-Texas statutory claims based on the franchise act and consumer protection laws in the states where the franchisees are located. Franchisees argued that the anti-waiver provisions found in the laws of eleven states that contain franchises owned and/or previously owned by plaintiffs required the application of the laws where the franchisees are located. The federal court rejected this argument because the laws of the franchisees’ home states are inapplicable based on the application of the “most significant relationship” set forth in the Restatement (Second) of Conflicts of Law. Because Texas had the most significant relationship to the franchisees’ claims, the laws of the franchisees’ home states, including those states with anti-waiver provisions, were inapplicable. Thus, all of the franchisees’ twenty-six causes of action based on their home state laws were dismissed. Momentum Marketing Sales & Services, Inc. v. Curves International, Inc.,
Bus. Franchise Guide (CCH) ¶ 14,047 (W.D. Tex. Dec. 17, 2008).
Summary Judgment Defense Victory in Toll-Collection Technology Patent Case
Haynes and Boone established new precedent for patent exhaustion by obtaining summary judgment dismissal, with Federal Circuit affirmation, of a lawsuit alleging infringement of electronic toll collection patents in a case with broad implications for the U.S. toll collection industry. The case could have cost client Electronic Transaction Consultants Corporation (ETC) more than $60 million and had the potential to jeopardize the system that currently collects about 80 percent of all electronic tolls in the United States. The lawsuit was brought against ETC by TransCore, who alleged that ETC infringed four different TransCore patents that relate to the automatic electronic collection of tolls. TransCore sought more than $20 million in damages, which it sought to treble to $60 million. TransCore had alleged that ETC’s “use” of allegedly infringing toll-collection equipment infringed its patents. But the court held that TransCore’s earlier settlement with the equipment manufacturer had exhausted TransCore’s rights in the patents, and granted judgment to ETC.