Collins v. International Dairy Queen, Inc.

168 F.R.D. 668, 1996 U.S. Dist. LEXIS 12898, 1996 WL 501867
CourtDistrict Court, M.D. Georgia
DecidedAugust 30, 1996
DocketCivil Action File No. 94-95-4-MAC(WDO)
StatusPublished
Cited by22 cases

This text of 168 F.R.D. 668 (Collins v. International Dairy Queen, Inc.) is published on Counsel Stack Legal Research, covering District Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Collins v. International Dairy Queen, Inc., 168 F.R.D. 668, 1996 U.S. Dist. LEXIS 12898, 1996 WL 501867 (M.D. Ga. 1996).

Opinion

ORDER

OWENS, District Judge.

I. Introduction

The above plaintiffs are franchisees of defendant American Dairy Queen Corporation who transact business in the Middle District of Georgia. Plaintiffs each operate one or more Dairy Queen or Dairy Queen/Brazier restaurants in this district under similar, but not necessarily identical, written franchise agreements which they have entered into with defendants.

American Dairy Queen Corporation (“ADQ”), a Delaware corporation with its principal place of business in the State of Minnesota, owns all trademarks utilized in the Dairy Queen system and licenses and serves a system of 5,500 Dairy Queen stores. Defendant International Dairy Queen, Inc. (“IDQ”), also a Delaware corporation with its principal place of business in Minnesota, is the parent company of ADQ and is involved in activities relating to the sale and distribution of products to the Dairy Queen system.

Plaintiffs filed this lawsuit against IDQ/ ADQ seeking injunctive and declaratory relief in addition to unspecified monetary dam-

ages. In Count I and Count II of the fourth amended complaint plaintiffs allege that defendants have violated § 2 of the Sherman Act, 15 U.S.C. § 2, by monopolizing or attempting to monopolize the market consisting of products sold to the franchisees. In Count III they allege defendants have violated § 1 of the Sherman Act by engaging in a tying arrangement. In Count IV they allege that defendants have breached that provision of the franchise agreement, under which each franchisee operates, which provides that the franchisee is free to purchase food products and supplies from any available source as long as the products meet defendants’ reasonable standards and specifications. They allege that defendants have breached this provision by failing to establish and implement a reasonable procedure by which the franchisees may obtain new approved products. In Count V plaintiffs allege that defendants have violated an implied duty of good faith and fair dealing. In Count VI and Count VII they allege that defendants have breached those portions of the franchise agreement relating to advertising fees payable by more than 3,300 franchisees for the advertising and promotion of Dairy Queen products. They also allege that defendants have breached their fiduciary duty to the franchisees by charging the advertising fund an excessive management fee either not permitted by contract or not reasonably related to defendants’ services, by selecting advertising agencies based on criteria not related to the goal of the best promotion and advertising at the lowest cost to the franchisees, and by usurping the advertising fund for their own benefit. In Count VIII plaintiffs allege that defendants have breached various obligations imposed upon them in the Poole settlement agreement including the provisions pertaining to manufacture and sale of cold drink cups and lids to the Dairy Queen system.1

Plaintiffs have moved for certification of a class action pursuant to Rule 23, Federal Rules of Civil Procedure. The undersigned has heard oral arguments on the issue of [673]*673class certification as well as on the parties’ pending motions for summary judgment. Following oral argument, both parties submitted proposed findings of fact and conclusions of law at the direction of the court. After carefully considering the proposed findings and conclusions along with the arguments of counsel, the relevant case law, and the record as a whole, the court issues the following order with respect to plaintiffs’ motion for class certification.

II. Proposed class action

Plaintiffs have requested that the court certify the following two classes and two subclasses of Daily Queen franchisees:

Class I, consisting of all members of the Dairy Queen Operators’ Association.2

Class II, consisting of all other Dairy Queen and Dairy Queen/Brazier franchisees in the United States, except those franchisees who are located in the state of Texas and those who are Territorial Operators.

Subclass I, consisting of all members of Class I and Class II who are members of the permanent settlement class in the Poole settlement agreement and all persons claiming under them.

Subclass II, consisting of all members of Class I and Class II who made mandatory payments to the Dairy Queen advertising fund.

A. General requirements of Rule 23

In exercising its discretion to determine whether class certification is appropriate under Rule 23, a trial court may not consider the merits of a plaintiff’s claim. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 2152-53, 40 L.Ed.2d 732 (1974). However, the court may consider as true the allegations of the complaint while considering the type of evidence a plaintiff must produce to prove his claims. See General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982). Plaintiffs bear the burden of proving that the prerequisites of Rule 23 have been satisfied. Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1038 (5th Cir.1981); Newton v. Southern Wood Piedmont Co., 163 F.R.D. 625, 631 (S.D.Ga.1995). In order to meet the requirements of Rule 23, plaintiffs must satisfy all the requirements of Rule 23(a) and at least one of the three permissible categories identified in Rule 23(b). Eisen, 417 U.S. at 163, 94 S.Ct. at 2145-46.

(1) Rule 23(a)

A class action is appropriate only if: “(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a). The district court must determine “as soon as practicable” whether the class action is to be maintained, Fed.R.Civ.P. 23(c)(1), but “may alter its determination if it appears unsound after a fuller development of the facts.” Lumpkin v. E.I. DuPont De Nemours & Co., 161 F.R.D. 480, 481 (M.D.Ga.1995).

Numerosity: The court finds that the numerosity requirement in the present case has been met. “Where joinder as an alternative to class action would be impracticable, the numerosity requirement of Rule 23(a) is satisfied.” Coleman v. Cannon Oil Co., 141 F.R.D. 516, 521 (M.D.Ala.1992). The number of franchisees in each of the classes and subclasses is sufficiently large that joinder would not be practicable.

Commonality:

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Bluebook (online)
168 F.R.D. 668, 1996 U.S. Dist. LEXIS 12898, 1996 WL 501867, Counsel Stack Legal Research, https://law.counselstack.com/opinion/collins-v-international-dairy-queen-inc-gamd-1996.