2011 Ohio 5939
Ohio Ct. App.2011Background
- Esber Beverage Co. distributes Heineken Brand and Newcastle Brown Ale in Ohio since 1969/1976 respectively.
- Heineken NV and affiliates (HUSA, NFB, SNIC, S&N) underwent a corporate consolidation under Sunrise Acquisitions in 2007–2008.
- On April 28, 2008, Heineken NV acquired S&N and related brands/assets; control over US distribution followed.
- Distributors were notified that HUSA would become the exclusive US importer by September 1, 2008; SNIC and NFB acknowledged the transition.
- On October 24, 2008, HUSA notified Esber of termination of Esber’s Brand franchise under R.C. 1333.85(D).
- The Stark County trial court granted declaratory relief in Esber’s favor (Sept. 18, 2009), with a subsequent settlement on unrelated counts leaving the judgment final and appealable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HUSA is a successor manufacturer under R.C. 1333.85(D). | Esber contends HUSA is not a successor and thus termination is unlawful. | HUSA contends it is a successor manufacturer and the notice was timely. | HUSA is not a successor; termination improper. |
| Whether injunctive relief was proper under the Franchise Act. | Esber argues for damages; injunctive relief is improper. | Act allows injunctions to preserve rights pending merits. | Injunction proper; Act contemplates damages or other relief. |
| Whether Esber is judicially estopped from opposing notice timing based on another case. | Esber’s position in related case conflicts with other filing; estoppel should apply. | No record showing the prior court accepted Esber’s position. | No judicial estoppel; claim affirmed. |
Key Cases Cited
- Esber Beverage Co. v. InBev USA, 2007-Ohio-927 (Ohio App. 6th Dist. 2007) (addressed successor manufacturer concept under R.C. 1333.85(D) and transfer of brand assets)
- Beverage Distributors, Inc. v. Miller Brewing Co., SD Ohio 2009 (S.D. Ohio, 2009) (discussed broader purposes of the Act and protection of distributors)
- Superior Beverage Co., Inc. v. Schieffelin & Co., 1:05 CV 0834, 4:05 CV 0868 (N.D. Ohio, 2007) (fact pattern distinguishing successor transaction under the Act)
- InBev USA, LLC v. Hill Distributing Co., No. 2:05-CV-00298 (S.D. Ohio, Apr. 3, 2006) (S.D. Ohio, 2006) (treatment of successor-like transfers and termination rights under the Act)
- Tri–County Wholesale Dist. v. The Wine Group, No. 2:10–cv–693 (S.D.Ohio Sept. 2, 2010) (S.D. Ohio, 2010) (support for injunctions under the Franchise Act)