The use of litigation trusts to fund franchise lawsuits

Article Abstract:

Franchisees have begun pooling resources for litigation into litigation trusts that fund disputes between franchisees and franchisors, but franchisors can challenge some suits funded by these trusts. While the trusts are legal, they are often made party in the action, giving the franchisor the opportunity to claim the trust is not the real party in interest. Also, lawyers representing the trust and acting in litigation may have conflicts that should be discussed in court.

Laws, regulations and rules, Trusts and trustees, Trustees, Trusts (Law), states

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Fraud in the inducement claims provide means of avoiding franchise agreement arbitration clause - at least in the first instance

Article Abstract:

A 1996 Second Circuit decision held franchisees' claims of fraudulent inducement should be adjudicated rather than resolved by arbitrators, thus providing franchisee-plaintiff with a way of temporarily avoiding franchise agreement arbitration clauses. However, the Eleventh Circuit's 1996 decision in Kotam Electronics, which relied on the US Supreme Court's reasoning in the 1985 Mitsubishi decision, upheld the validity of arbitration clauses in antitrust matters.

Other Justice, Public Order, and Safety Activities, Franchise Law, Interpretation and construction, Fraud, Commercial law, Commercial arbitration agreements

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Meineke reversal a setback for franchisee class action lawsuits

Article Abstract:

Class certification of franchisee lawsuits is discussed, starting with the holding if the Fourth Circuit in Broussard v. Meineke Discount Muffler Shops. that the disparate frnahisee claims precluded class treatment. A number of rulings after Meineke are summarized.

United States, Usage, Class actions (Civil procedure), Class action lawsuits

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