Commercial Litigation – Case Study
Our success on behalf of a nonprofit Girl Scouts Council in Girl Scouts of Manitou Council v. Girl Scouts of the USA, exemplifies the level of skill we bring to commercial litigation. Every tool in a commercial litigator’s tool bag had to be used to bring this case to a successful conclusion.
- The national Girl Scouts organization was moving to eliminate our client as a separate, independent council. Our client’s 50 years of successful operation and extraordinary good will in the community, together with its multiple camps and other valuable property would be lost. Its devoted employees would be without a job.
- We had to quickly review and come up to speed on years of communications and transactions between the parties in order to get a complaint promptly on file with the United States District Court in Milwaukee. Because the threat was both devastating and imminent, our complaint sought emergency, preliminary and permanent injunctive relief.
- We concluded the best path for success was to pursue a legal theory that had never been pressed anywhere in the country: that our nonprofit Girl Scouts council was a “dealer” under the Wisconsin Fair Dealership Law, and was entitled to the Law’s heightened protections from termination and to injunctive relief. We also pursued alternative claims for breach of contract, breach of the implied duty of good faith and fair dealing, tortious interference, economic coercion, breach of and interference with fiduciary duties, and conspiracy.
- It quickly became evident that the District Court judge had little interest in our theories or in the preservation of the council. This required a shift in the normal outlook and strategy of a case. We began early on to posture the case for an appeal.
- As feared but anticipated, the District Court denied our emergency motions for injunctive relief. We immediately filed an interlocutory appeal to the Seventh Circuit Court of Appeals in Chicago. There, because the threat to our client’s survival remained imminent, we sought expedited treatment from the court, as well as moved for the unusual relief of having an injunction issue directly from the appellate court.
- We got the court’s attention. It established an extremely fast schedule, resulting in the matter being fully briefed and orally argued to the three-judge appellate panel in less than 90 days. Three days after oral argument and just four days from the effective date of the destruction of our client’s business, the appellate court entered a one sentence order reversing the lower court and entering a preliminary injunction against Girl Scouts of the USA. The national organization was forbidden from interfering with Manitou Council for the duration of the lawsuit. A few months later, the Seventh Circuit issued a lengthy opinion in support of its order and adopting our unique theory that Manitou Council qualified as a “dealer” under the Wisconsin Fair Dealership Law.
- The national organization still refused to engage in a common sense dialogue and, instead, costly discovery and pretrial motions ensued in the lower court. Girl Scouts of the USA was represented by one of the largest law firms in the world, an Am Law 10 firm, and they threw lawyers from New York, Washington D.C. and Milwaukee at the case. Hundreds of thousands of pages of documents were produced by the parties. Depositions were taken at numerous locations in Wisconsin, New York, Kansas and Massachusetts. And, throughout, a steady stream of motions was presented to a still antagonistic District Court.
- Defense counsel also shifted their tactic from one principally refuting our claim under the Wisconsin Fair Dealership Law to one based on the First Amendment rights of Girl Scouts of the USA to associate – or not associate – with whomever they wanted. We now had to dig deep into constitutional law and become expert on the professed First Amendment rights of nonprofit associations.
- Eventually, the District Court again expressed its dislike of our claims. It ruled entirely in favor of Girl Scouts of the USA on motions for summary judgment and entered judgment against every one of Manitou Council’s claims. The District Court adopted Girl Scouts of the USA’s First Amendment argument. Again, we were forced to appeal.
- Success was again achieved in the appellate court. The Seventh Circuit rejected the First Amendment analysis put forth by the national organization and the District Court. Our constitutional analysis was adopted, and the District Court was directed to enter judgment in favor of Manitou Council on the claim brought under the Wisconsin Fair Dealership Law. A permanent injunction was then entered against the national organization and its attempts to force Manitou Council to disband and dissolve were fully prevented.
- Finally, under the authority of the Wisconsin Fair Dealership Law we recovered our client’s fees and expenses incurred over the course of the litigation. The client was made whole and it continues to operate as the independent, successful council it always wanted to be.