Wisconsin Fair Dealership Case Law Updates: Girl Scouts of Manitou Council, Inc. v. The Girl Scouts of the United States of America, Inc., et al.

September 11, 2008

Axley Brynelson’s Distribution and Franchise Team publishes the Wisconsin Fair Dealership Case Law Update as an online resource for developments in the Wisconsin Fair Dealership Law.

Girl Scouts of Manitou Council, Inc. v. The Girl Scouts of the United States of America, Inc., et al
United States Court of Appeals for the Seventh Circuit, September 11, 2008. 

Facts: In this surprising opinion the 7th Circuit Court of Appeals determined that a local Girl Scout council was a protected dealer under the Wisconsin Fair Dealership Law. The plaintiff, the Girl Scouts of Manitou Council, Inc., objected to the Girl Scouts of America’s decision to reorganize its national organization plan, which resulted in a reduction of size of Manitou’s Girl Scout’s jurisdiction by 60%. The Manitou Girl Scouts claimed that this reduction would irreparably harm its ability to generate revenues to the sale of Girl Scout cookies.

Ruling: The 7th Circuit Court of Appeals applied a fact intensive analysis developed through case law to determine whether or not the Girl Scout council could be a protected dealer under the law. The Court determined that the Manitou Girl Scouts council is a dealer within the meaning of the term as defined by the Wisconsin Fair Dealership Law. First, it found that a contractual relationship existed between the Manitou Girl Scouts and the Girl Scouts of America. Second, the court fount that the Manitou Girl Scouts sell and distribute Girl Scouts of America products or services and make extensive use of Girl Scouts of America’s proprietary marks. Third, the Court found that a community of interest existed between Manitou’s Girl Scouts and the Girl Scouts of America based on numerous factors which included the facts that the Manitou Girl Scouts had been a local Girl Scout Council since 1950, the contractual relationship and obligations are expensive, Manitou Girl Scouts devote 100% of its time and resources to providing girl scouting to its jurisdiction, and draw virtually 100% of its profits from offering girl scouting products and services. In addition, the Girl Scouts of America has granted the Manitou Girl Scouts broad territory that included seven counties and over 7,000 active members, Manitou Girl Scouts made extensive use of Girl Scouts of America proprietary marks, Manitou Girl Scouts had a substantial investment in real property and good will within its community, all which were made in the name of girl scouting. Finally, the Manitou Girl Scouts devoted 100% of its personnel to providing girl scouting to its jurisdiction and all of Manitou’s advertising or promotions are intended to build interest and support for girl scouting.

Bottom Line: This case is instructive as it indicates the breadth of the Wisconsin Fair Dealership Law and the different types of relationships that where it may apply. Moreover, this case illustrates that the court does not look to see whether there is a typical manufacturer – dealer relationship when applying the law, but instead looks to the statutory and case law analysis to make such a determination.

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For more information about "Wisconsin Fair Dealership Case Law Updates: Girl Scouts of Manitou Council, Inc. v. The Girl Scouts of the United States of America, Inc., et al.," contact Robert C. Procter at rprocter@axley.com or 608.283.6762.