Syllabus -- Franchise and Distribution Law/Professor Devlin/Fall 2008
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1 Preliminary (subject to change) Syllabus -- Franchise and Distribution Law/Professor Devlin/Fall 2008 Meets Tuesday and Thursday 10:30 Noon Room TBD Casebook Schneider and Ney - Business Franchise Law: Cases and Materials, (Carolina Academic Press) The course is designed to provide a kaleidoscopic view of substantive franchise and distribution law, consider ethical and professional issues related to the subject areas, and integrate the subject matter with the analytical and practical skills necessary to the practice of law. The syllabus is ambitious because the subjects are quite broad and are governed by both federal and state statutes as well as common law. The areas of the law to be examined include, among others, contract, intellectual property, antitrust, and constitutional law. We will devote time to motor fuel franchises and touch on environmental issues relevant to motor fuel distribution. The assignments are extensive, but we will be flexible in timing and material covered during the semester to assure that we cover as much as possible while tempering that ambition with reasonable limits. Grades will be passed on two components: A paper topic to be selected by each student from a list to be provided during the third class and due by class on November 18. Paper should be approximately 15 to 18 pages in length and not exceed 20 pages plus footnotes or endnotes and is to be in Times New Roman, 12 point type and double-spaced with reasonable margins. Footnotes and references should conform to The Bluebook: A Uniform System of Citations (the Harvard Bluebook ) and the Texas Law Review Manual on Usage and Style. A final examination of approximately one hour to 90 minutes (consisting of 10 to 20 objective questions and a fact pattern analysis essay) will be given. The exam will be open book, and class notes may be used.. Class Participation will also be considered in final grading. Computers are permitted in class for taking notes only. Beverages (water, soda, tea, and coffee) are permitted, but no eating will be permitted in class. Cell phones are to be turned off during class. N.B. - You will note that class will not meet on October 16. That class will be made up by adding an additional 15 minutes to several other sessions.
2 August 26 and 28 Introduction and Overview; Brief History of Franchising What is a Franchise? Distinguish Franchises from Business Opportunities and Sales Representatives Distinguish Distribution from Business Format Franchises Laws governing relationships and registration and/or disclosure Significant Control and Community of Interest Issues Assignment pp and Texas Business Opportunity Act, Texas Business & Commerce Code - Chapter 41; Wisconsin Fair Dealership Law (Chapter 135, Wisconsin Laws, and Wisconsin Franchise Investment Law, Chapter 553, Wisconsin Laws) September 2 and 4 Trademarks Briefly Trade Dress Licensing and Enforcement Assignment -- pp (read Two Pesos decision on 75-81, Fotomat on 81-91, and Jiffy Lube on 91-97) September 9 and 11 Registration and Disclosure Laws FTC Rule State Franchise Investment Laws Enforcement and Penalties Assignment -- pp ; FTC Franchise Rule available at FTC cases (Ashley on and imall on 304). Assignment for 09/04 pp ; Appendix B ( UFOC ) (pp ); State cases (Loghar Chicken on , Kohr on , and Speedee Oil Change on 31 September 16 and 18 Franchise Relationships and Relationship Laws - Overview Transfers of Franchises and Contract Prohibitions; Inheritance Blue Sky on Franchise Sales Assignment -- pp 99 and 197; pp (Creamland and DQ cases on and ) and ; on inheritance, see California Business & Professions Code September 23 Franchise Relationships and Relationship Laws Encroachment common law and statutory Forum Selection and Choice of Law Arbitration and Mediation Provisions
3 Assignment -- pp and and Iowa Code 523H.6(1) on encroachment; pp on forum selection; pp. pp on choice of law and jurisdiction; pp on arbitration September 25 and 30 The Perpetuity Issue Termination and Nonrenewal Constructive Termination and Nonrenewal Assignment -- pp and 152; STATUTES. October 2 Discrimination Among Franchisees Repurchase and Compensation Rights of First Refusal Remedies Arbitration Assignment pp and ; Arbitration Fairness Act of 2007, S / H.R (110 th Cong. 1 st Sess.) October 7, 9, and 14 UCC and Other Contract Issues Overview Duty of Competence and Due Care Implied Covenant of Good Faith and Fair Dealing Pricing (Open Price Terms) Integration Clauses Assignment On implied covenant, Texas Business & Commerce Code 1-203, 1-201(19), and 2-103(1). On Open Price Terms - Texas Business & Commerce Code 2-305; Mathis v. Exxon Corp F.2d 448 (5 th Cir. 2002); Shell Oil Co. v. HRN, Inc., 144 S.W.3d 429 (Tex. 2004); Marcoux v. Shell Oil Prods. Co., 2008 U.S. App. LEXIS 8393 (1 st Cir. April 18, 2008) On integration clauses, casebook pp No-Compete Agreements Assignment Texas Business & Commerce Code ; Hill v. Mobile Auto Trim, Inc., 752 SW2d 168 (Tx. 1987); Butts Retail, Inc. v. Diversififoods, Inc., 840 SW2d 776 (Tx. App. Beaumont) 199_) Vicarious Liability Assignment -- pp TX CASE (No class on October 16) October 21 and 23 Petroleum Marketing Industry Franchising; Preemption Issues Assignment Petroleum Marketing Practices Act (15 U.S.C )
4 October 28 Industry-Specific Franchise Laws (ex-pmpa) Assignment pp and ; October 30 and November 4 International Franchising (Materials to be designated) November 6, 11, and 13* Introduction to Distribution Law and Antitrust Brief History of Antitrust Law Competition Principles (Competition v. Competitors; Inter v. Intra-brand) Federal and State Laws and their Relationship Assignment pp ; Sherman Act, 15 U.S.C. 1 et seq., Clayton Act, 15 U.S.C. 14 et seq, and FTC Act, 15 U.S.C. 45 et seq. Standard Oil Co. (New Jersey) v. U.S., 221 U.S. 1 (1911); Dr. Miles Medical Co. v. John D. Park & Sons, 220 U.S. 373 (1911); U.S. v. Colgate & Co., 250 U.S Rule of Reason v. Per se Treatment Horizontal/Vertical Development of Vertical Price and Non-Price Restraints Jurisprudence Assignment U.S. v. Parke, Davis & Co., 362 U.S. 29 (1960); Simpson v. Union Oil Co., 377 U.S. 13 (1964); U.S. v. Arnold, Schwinn & Co, 388 U.S. 365 (1967); Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977); Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); Business Electronics Corp. v. Sharp Electronics Corp., in Casebook at ; State Oil Co. v. Kahn in Casebook at ; Leegin Creative Leather Products, Inc. v. PSKS, Inc., U.S. Supreme Docket No (June 28, 2007) November 18 and 20* Tying Assignment Siegel v. Chicken Delight, Inc. 448 F.2d 43 (9 th Cir. 1971); Casebook pp Price Discrimination Robinson-Patman Act Fred Meyer Guides Slotting Allowances Assignment pp ; F.T.C. v. Sun Oil Co., 371 U.S. 505 (1963); J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557 (1981); Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. 428 (1983) Texaco Inc. v. Hasbrouck, 496 U.S. 543 (1990); Volvo Trucks North America, Inc. v. Reeder_Simco GMC, Inc., 546 U.S. 164 (2006); Weyerhauser Co. v. Ross-Simmons Hardwood Lumber Co., 127 S. Ct (2007); on Fred Meyer Guides, see Fred Meyer, Inc. v. FTC, 390 U.S. 341 (1968) and FTC, Guides
5 for Advertising Allowances and Other Merchandising Payments and Services, 16 C.F. R et seq. November 26 and December 2 Predatory Pricing State Below-Cost Selling Statues Price Gouging Legislation Assignment Florida Motor fuel Marketing Practices Act, Florida Statutes, Chapter 526, et seq. Merger Issues (very briefly) Assignments Clayton Act 7 and 7A; see FTC releases on supermarket acquisitions involving Whole Foods Markets ( ) and gasoline refining/distribution involving Western Refining ( December 4 Closing and Fill-in-the-Gaps You need read only the syllabi in the U.S. Supreme Court cases assigned for these classes except you should read the full opinions in the Standard Oil, Dr. Miles, Colgate, Leegin, and Hasbrouck cases. Francis J. Devlin 2008
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