Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc., 646 F.3d 983

Background

Manitou, a Wisconsin local Girl Scouts council, sues the national Girl Scouts organization in a diversity case.
Manitou alleges the realignment of council territories violated Wisconsin's Fair Dealership Law (Wis. Stat. ch. 135) and related law.
District court granted summary judgment for the national organization; preliminary injunction was dissolved after dismissal.
Seventh Circuit previously held in 2008 that Manitou was entitled to a preliminary injunction on the Wisconsin law claim.
National organization argues First Amendment protection and contends the law does not apply to nonprofit entities.
Court analyzes whether the realignment serves as a good-cause basis and whether First Amendment concerns override the statute.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does Wis. 135.03 apply to the national organization’s realignment of Manitou?	Realignment terminates/decreases Manitou’s competitive position; requires good cause.	First Amendment protects realignment; statute should not force expressive restrictions.	First Amendment cannot immunize; statute can apply to nonprofit dealership realignments.
Is the realignment a change in competitive circumstances under the statute?	Realignment alters exclusive territory and dealership dynamics.	Realignment may open competition but is permissible under the grantor’s authority.	Yes; altering territorial boundaries constitutes a change in competitive circumstances triggering the statute.
Can First Amendment rights override Wisconsin’s fair-dealership requirements in this context?	Realignment furthers expressive activity and minority outreach; government cannot force contrary actions.	Expressive purpose is not sufficiently shown to override general applicability of the law.	First Amendment defense rejected as evidence of lack of necessary connection to expressive aims.
Did the district court err in denying Manitou summary judgment and in granting the national organization relief?	Statutory violation is clear; Manitou should receive summary judgment.	Constitutional considerations and business rationales justify the realignment.	Reversed in part; grant Manitou summary judgment on the fair-dealership claim; reinstate preliminary injunction.
Should common-law claims be addressed or affirmed on appeal?	Common-law claims may be separate and viable.	Statutory analysis suffices; common-law claims should be left intact only if supported.	Remanded with rejection of district court on common-law claims affirmed.

Key Cases Cited

Boy Scouts of America v. Dale, 530 U.S. 640 (U.S. 2000) (expressive association; First Amendment protection for group messages)
Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557 (U.S. 1995) (expressive associations and compelled speech considerations)
Petereit v. S.B. Thomas, Inc., 63 F.3d 1169 (2d Cir. 1995) (legitimate business need to increase sales supports good-cause under franchise act)
Thornburg v. Gingles, 478 U.S. 30 (U.S. 1986) (racially polarized districts; relevance to diversity and grouping arguments)
National Collegiate Athletic Ass'n v. Board of Regents of University of Oklahoma, 468 U.S. 85 (U.S. 1984) (antitrust application to nonacademic university activities)
Foerster, Inc. v. Atlas Metal Parts Co., 313 N.W.2d 60 (Wis. 1981) (dealership protections and noncommercial aspects of business relationships)
Super Valu Stores, Inc. v. D-Mart Food Stores, Inc., 431 N.W.2d 721 (Wis. 1988) (franchise relationship and competitive changes analysis)
Ziegler Co. v. Rexnord, Inc., 433 N.W.2d 8 (Wis. 1988) (objective ascertainability of need for change in dealership arrangements)
Al's Service Center v. BP Products North America, Inc., 599 F.3d 720 (7th Cir. 2010) (dealer-protection law and goodwill concerns)
Fleet Wholesale Supply Co. v. Remington Arms Co., 846 F.2d 1095 (7th Cir. 1988) (franchise termination and good-cause considerations)