Planet Fitness International Franchise v. JEG-United, LLC
1:20-cv-00693
D.N.H.May 14, 2021Background
- Planet Fitness (franchisor) and franchisee JEG-United (owns five Mexican gyms) negotiated a Side‑Letter (Mar. 5, 2019) to pursue an Area Development Agreement to expand in Mexico.
- JEG‑United alleges Planet Fitness intentionally interfered with three prospective business opportunities: (1) lease/expansion negotiations with Soriana (retailer/landlord); (2) a preliminary partnership or purchase deal with Carlos Ibarra/Ibarra Group (use of confidential info to lure the deal); and (3) purchase negotiations for California Fitness locations.
- Planet Fitness moved for judgment on the pleadings seeking dismissal of JEG‑United’s tortious‑interference counterclaim (Count III), arguing it would be a necessary party to any future franchise agreements and therefore cannot be a third‑party interferer.
- JEG‑United contends Planet Fitness misused its franchisor position to sabotage these third‑party deals and take the opportunities for itself, alleging intentional and improper interference.
- The court evaluated the pleading under the Rule 12(c)/12(b)(6) standard and found JEG‑United plausibly alleged tortious interference, denying Planet Fitness’s motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether franchisor can be a "stranger" and thus liable for tortious interference with franchisee's deals | Planet Fitness, as franchisor, acted as a third party to JEG‑United’s relations with Soriana, Ibarra, and California Fitness and interfered improperly | Planet Fitness claims its franchisor role and right to approve franchises makes it a necessary party and insulated from liability | Court: Franchisor status does not as a matter of law preclude liability; alleged interference concerned separate third‑party relations and survives pleading challenge |
| Whether JEG‑United must plead actual malice for tortious interference under NH law | JEG‑United: need only plead intentional and improper interference under NH law | Planet Fitness: plaintiff must plead actual malice (bad faith/ill will) | Court: New Hampshire requires intent and impropriety, not actual malice (ill will); Restatement §§766/766B apply |
| Whether the pleadings plausibly state tortious interference claims under Rule 12(c) | JEG‑United: factual allegations support reasonable inference of improper intent and resulting damage | Planet Fitness: facts show only exercise of franchisor approval rights, so no plausible claim | Court: Accepting JEG‑United’s allegations as true, its claim is plausible and judgment on pleadings is denied |
Key Cases Cited
- Zipperer v. Raytheon Co., 493 F.3d 50 (1st Cir. 2007) (standard for judgment on the pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for federal pleadings)
- Foley v. Wells Fargo Bank, N.A., 772 F.3d 63 (1st Cir. 2014) (pleading plausibility and Rule 12 standards)
- Hughes v. N.H. Div. of Aeronautics, 152 N.H. 30 (N.H. 2005) (elements of tortious interference under NH law)
- Tessier v. Rockefeller, 162 N.H. 324 (N.H. 2011) (interference requires actor be a stranger to the contract)
- Demetracopoulos v. Wilson, 138 N.H. 371 (N.H. 1994) (intentional and improper interference standard)
- Roberts v. Gen. Motors Corp., 138 N.H. 532 (N.H. 1994) (franchisor’s proper exercise of contractual rights contrasted with improper interference)
- Bricker v. Crane, 118 N.H. 249 (N.H. 1978) (adoption of Restatement §766 for tortious interference)
- Baker v. Dennis Brown Realty, Inc., 121 N.H. 640 (N.H. 1981) (adoption of Restatement §766B for prospective contractual relations)
- Burger King Corp. v. Ashland Equities, Inc., 161 F. Supp. 2d 1331 (S.D. Fla. 2001) (franchisor conduct can, in some circumstances, support interference claims)
