Pernod Ricard USA, LLC v. Major Brands Inc. et al

Filing 38

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiffs motion to bifurcate its action for declaratory judgment from Defendant Major Brands counterclaims, and to accelerate the declaratory judgment action, is GRANTED to the extent that t he claim and counterclaim for declaratory judgment shall be bifurcated from Major Brands other state law counterclaims, with the specific schedule for the case to be set in a Case Management Order that the Court shall issue after a Rule 16 scheduling conference is held in this case.(Doc. No. 27.) IT IS FURTHER ORDERED that a Rule 16 scheduling conference shall be set by separate Order. Signed by District Judge Audrey G. Fleissig on 4/30/2013. (KSH)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

PERNOD RICARD USA, LLC,
Plaintiff / Counterclaim Defendant,
v.
MAJOR BRANDS, INC.,
Defendant / Counterclaim Plaintiff, and
MID-CONTINENT DISTRIBUTORS, INC.,
d/b/a/ GLAZER’S MIDWEST,
Defendant.

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No. 4:13CV00064 AGF

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiff’s motion to bifurcate its action for
declaratory judgment from Defendant Major Brands, Inc.’s counterclaims, and to
accelerate a hearing in Plaintiff’s declaratory judgment action. For the reasons set forth
below, this motion shall in essence be granted.
BACKGROUND
On January 14, 2013, Plaintiff Pernod Ricard USA, LLC, a manufacturer of wine
and spirits, terminated the rights of Defendants, two competing distributors of wine and
spirits, to distribute Plaintiff’s brand products in the State of Missouri, effective April 14,
2013. Also on January 14, 2013, Plaintiff filed this action seeking a declaratory
judgment that its termination of Defendants’ distribution rights did not violate the

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Missouri Franchise Act, Mo. Rev. Stat. § 407.413 (“MFA”), because the parties’
distribution relationship was not subject to the Act.
On February 5, 2013, Major Brands, Inc. (“Major Brands”) filed a counterclaim
for a declaration that its relationship with Plaintiff constituted a “franchise” under the
MFA and that Plaintiff had no legal right to terminate Major Brands as a distributor.
Major Brands also asserts counterclaims of violation of the MFA, breach of contract,
breach of the covenant of good faith and fair dealing, recoupment, unjust enrichment, and
tortious interference with business expectancy.
By Order dated March 3, 2014, the Court1 informed the parties that the case was
preliminarily designated as a Track 2 case, with anticipated resolution within 18 months
of the filing of the complaint. On March 22, 2013, the parties submitted a Joint Proposed
Scheduling Plan, in which Plaintiff asked that the case be redesignated as a Track 1 case,
with Plaintiff’s claim for declaratory judgment bifurcated and resolved by the end of
August 2013. On the same day, Plaintiff filed the motion now under consideration.
In support of its motion to bifurcate its declaratory judgment claim from Major
Brands’ counterclaims, Plaintiff argues that if it prevails on its declaratory judgment
claim, there would be no need to try the merits of Major Brands’ counterclaims, “much
less consider whether any damages should be awarded.” Plaintiff maintains that all of
Major Brands’ counterclaims are premised on its position that Plaintiff’s termination of
Major Brands’ distributorship was improper under the MFA.

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At the time, the case was assigned to the Honorable Charles A. Shaw, and was
reassigned to the undersigned on April 19, 2013.
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In support of its request to expedite its declaratory judgment claim, Plaintiff states
that the Missouri legislature is likely to enact a bill that is now pending before it pursuant
to which the MFA would apply to Plaintiff. According to Plaintiff, this bill could
become law on August 28, 2013. Plaintiff posits that if its declaratory judgment claim is
not resolved before that time, Major Brands is likely to argue that the new law should be
applied retroactively to its distribution agreement with Plaintiff, whereas if the
declaratory judgment claim is tried to verdict prior to August 28, 2013, that issue would
be eliminated from the case.2
Major Brands responds that the bifurcation and acceleration proposed by Plaintiff
would prejudice Major Brands and result in the duplicative presentation of evidence at
different times, and waste the parties’ and this Court’s time and resources.
DISCUSSION
Federal Rule of Civil Procedure 42(b) provides that “[f]or convenience, to avoid
prejudice, or to expedite and economize, the court may order a separate trial of one or
more separate issues, claims, crossclaims, counterclaims, or third-party claims.” Fed. R.
Civ. P. 42(a). District courts are given “considerable latitude in deciding the most
efficient and effective method of disposing of the issues in a case, so long as a party is
not prejudiced.” Rolscreen Co. v. Pella Prods. of St. Louis, Inc., 64 F.3d 1202, 1209 (8th
Cir. 1995).

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On April 23, 2013, the Court granted Plaintiff’s unopposed motion for judgment on
the pleadings against Defendant Mid-Continent Distributors, Inc.
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While the counterclaim that seeks damages for violation of the MFA is the only
counterclaim, besides the one for declaratory judgment, that is directly dependent on the
declaratory judgment claim and counterclaim, the Court believes that bifurcation of the
declaratory judgment claim and counterclaim from the state tort counterclaims is
warranted here. See Id. at 1209 (approving such a procedure in similar circumstances.)
The Court discerns no prejudice to Major Brands in proceeding in this manner.
The Federal Rules also provide that in an action for declaratory judgment, “[t]he
court may order a speedy hearing.” Fed. R. Civ. P. 57. Here, the Court will move
forward with the declaratory judgment aspect of the case as quickly as reasonable,
without directly taking into account the actions of the Missouri legislature, which in any
event, are speculative.
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s motion to bifurcate its action for
declaratory judgment from Defendant Major Brands’ counterclaims, and to accelerate the
declaratory judgment action, is GRANTED to the extent that the claim and counterclaim
for declaratory judgment shall be bifurcated from Major Brands’ other state law
counterclaims, with the specific schedule for the case to be set in a Case Management
Order that the Court shall issue after a Rule 16 scheduling conference is held in this case.
(Doc. No. 27.)

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IT IS FURTHER ORDERED that a Rule 16 scheduling conference shall be set
by separate Order.

_______________________________
AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 30th day of April, 2013.

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