Goldstein Law Firm Secures Rare Temporary Restraining Order and Temporary Injunction in Alleged Wrongful Beer Franchise Termination Case in Minnesota

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In a rare court decision, a judge granted Plaintiff’s request for a Temporary Restraining order and Temporary Injunction filed by Jeffrey M. Goldstein, of Goldstein Law Firm, PLLC and Clarence J. Kuhn, of Kuhn Law Firm, PLLC on behalf of plaintiff Needham Distributing Company, Inc., a family-owned and operated Minnesota beer distributor whose distribution rights were terminated by defendant Summit Brewing Company, a major local craft beer brewer, in an alleged attempt to take and give the plaintiff’s distribution rights to a competitor.

In a rare court decision, a judge granted a request for a Temporary Restraining Order and Temporary Injunction following the alleged wrongful termination of a family-owned and operated Minnesota beer distributor by a major national craft beer brewer. The case, Needham Distributing Company, Inc. vs. Summit Brewing Company, Inc. (62-CV-17-2292, (Second Judicial District County of Ramsey), was heard in a Minnesota State district court on May 1, 2017. Jeffrey M. Goldstein, franchisee lawyer and founder of Goldstein Law Firm, PLLC in Washington, D.C., served as lead litigation counsel in the case, representing plaintiff Needham. Minnesota attorney Clarence J. Kuhn, of the Kuhn Law Firm, PLLC, served as co-counsel for Needham. Summit was represented in the wrongful termination litigation by Gray, Plant, Mooty.

Attorneys Goldstein and Kuhn filed the motion for the Temporary Restraining Order on behalf of their client to prevent defendant Summit from terminating their client’s exclusive franchise territorial rights as Summit’s beer wholesaler in various Minnesota and Wisconsin territories. The motion alleged that Summit’s goal in terminating Needham was to take Needham’s statute-guaranteed distribution rights and give them to Needham’s competitor, J.J. Taylor Distributing (Taylor), which is one of Minnesota’s largest beer distributors.

The Complaint in the case alleged that Summit hired Taylor’s former President and General Manager, Mike Bamonti, as Summit’s Chief Sales Officer, and that Bamonti, when he had worked for Taylor, made several attempts to acquire Needham’s beer distribution business during his tenure at Taylor, all of which had been rejected by Needham. Needham also alleged in the Complaint that Summit and Bamonti had entered into an agreement whereby Summit would “take and give” Needham’s distribution rights to Taylor.

The emergency motion to prevent the planned franchise termination alleged that the termination was wrongful under the Minnesota Beer Brewers and Wholesalers Act, the Wisconsin Fair Dealers Act and the beer distribution agreement between the parties. Needham further alleged that, under the state dealer acts, a distributor cannot be terminated unless it violates a “reasonable and material” requirement imposed by the brewer without “reasonable excuse or justification.” The motion alleged that Summit based the wrongful termination on numerous insignificant and deceptive “terminating events.” Under the statutes, trivial violations mistakenly made by otherwise compliant distributors are prohibited from being used as grounds for termination.

The motion also alleged that Summit refused to provide 90 days’ notice to cure, as mandated by the Minnesota statute. Nevertheless, Needham claimed to have cured each of the alleged minor mistakes well within the 90-day cure period. Moreover, according to the Complaint, none of the written communications to Needham sent by Summit and Summit’s counsel fully noted all of the specific violations committed by Needham, a requirement under the statute.

The Court, in its oral ruling for Needham, viewed Summit as having shown both a likelihood of succeeding on the merits as well as irreparable harm if the injunction was not entered. As such, the court granted Needham’s request for a temporary restraining order and temporary injunction to enjoin Summit from terminating Needham until a full trial on the merits.    

“Temporary restraining orders are considered extraordinary remedies that are rarely granted,” said Attorney Jeffrey Goldstein. “The Court’s decision in favor of Needham marks a significant win for our client and all beer distributors.”

For more information, contact Jeffrey M. Goldstein.

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Jeffrey M. Goldstein
@Goldlawgroup
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