121 F.4th 661
8th Cir.2024Background
- Major Brands, Inc., a large Missouri liquor distributor, was the exclusive Missouri distributor for Jägermeister (supplied by Mast-Jägermeister US, Inc. or MJUS) for over 40 years without a written distribution contract.
- In 2018, MJUS terminated Major Brands and appointed Southern Glazers Wine and Spirits, which had recently entered a national distribution agreement with MJUS, as Jägermeister’s new exclusive Missouri distributor.
- Major Brands sued MJUS and Southern Glazers, alleging wrongful termination under Missouri franchise law, tortious interference, and conspiracy to violate Missouri franchise law.
- The jury found for Major Brands on multiple claims, awarding $11.75 million, and the district court denied defendants’ motions for judgment as a matter of law or a new trial.
- On appeal, the Eighth Circuit found that the jury instructions misstated the law regarding the meaning of a "community of interest" under Missouri’s Franchise Act and reversed and remanded for a new trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the relationship a protected franchise? | The MJUS-Major Brands relationship qualified as a franchise under Missouri law. | The relationship lacked the legal "community of interest" needed for franchise protection. | Jury instruction misstated "community of interest"; must assess economic dependence. |
| Correct jury instruction on "community of interest"? | Investments in the Jägermeister brand sufficed to show community of interest. | Instruction should require substantial franchise-specific, not brand-specific, economic dependence. | Jury should consider distributor’s economic dependence, not just brand-specific investment. |
| Award and attorney's fees to Major Brands | Entitled based on jury verdict under Missouri franchise law. | Invalid given legal errors in jury instructions on key elements. | Verdict and award vacated due to legal error; remanded for new trial. |
| Application of general vs. liquor-specific franchise definition | Only liquor-specific definition should apply. | Both general and liquor-specific definitions required by statute and precedent. | Both definitions apply under binding precedent (Shelton case). |
Key Cases Cited
- High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493 (Mo. banc 1992) (discussed purpose of Missouri franchise law, to protect against unequal bargaining power)
- Missouri Beverage Co. v. Shelton Bros., 669 F.3d 873 (8th Cir. 2012) (established test for "community of interest" in Missouri franchise law)
- Cooper Distributing Co. v. Amana Refrigeration, Inc., 63 F.3d 262 (3d Cir. 1995) (developed two-part test for community of interest in franchise law)
- Frieburg Farm Equip., Inc. v. Van Dale, Inc., 978 F.2d 395 (7th Cir. 1992) (interpreted "community of interest" for franchise status)