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GNC Franchising LLC v. Sala

April 6, 2006

GNC FRANCHISING LLC, ET AL., PLAINTIFFS,
v.
NESTOR SALA, DEFENDANT.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

ORDER OF COURT DENYING DEFENDANT SALA'S MOTION TO VACATE COURT ORDERS DATED MARCH 20, 2006 AND MARCH 27, 2006 AND ALTERNATIVE REQUEST FOR A STAY OF THOSE ORDERS SCHEDULING PERMANENT INJUNCTION TRIAL

A. BACKGROUND

Upon the Court's initial review of the complaint, motion for temporary restraining order and motion for preliminary injunction in this case, it appeared to be simple and straightforward -- albeit involving an important public safety issue (the purported sale of banned ephedrine-containing products), the protection of GNC's goodwill and intellectual property, and the termination of a Franchise. The Court believed this case to be "simple and straightforward" based upon this Court's extensive experience with hundreds of temporary restraining orders, preliminary and permanent injunctions, both as a litigator and as a trial judge.

Stated simply, Plaintiff GNC, Franchisor, contended that on at least two occasions, its Franchisee, Nestor Sala, through his Tallahassee, Florida store, sold banned ephedrine-containing products to a GNC "mystery shopper" and soon thereafter to the GNC Regional Sales Director, in violation of the GNC directives and the GNC Franchise Agreement, causing damage to GNC's goodwill and intellectual property. Defendant Sala responded that the sales did not take place; that if they did occur, they were the only two sales, ever at this store, of the banned ephedrine- containing products, and it was coincidence that both sales were made to GNC "shoppers"; and that the sales, if they did occur, were unauthorized and by a rogue employee.

Because the obvious public safety and intellectual property issues required, and still require, immediate attention, the Court ordered counsel to attend an initial case management conference, on February 27, 2006, to schedule a prompt hearing involving live witnesses to resolve the conflicting positions and make the necessary credibility determinations. The Court expected that, in light of the urgency of the issues, coupled with "prevailing party" attorneys fees provision in the Franchise Agreement, all parties, including defendant Sala, would wish to move expeditiously to a one or two day preliminary injunction hearing, with live witnesses, so said credibility determinations could be made and an appealable ruling could be rendered.

Instead, defendant Sala engaged in, and continues to engage in, skillful and elaborate legal maneuvers to avoid a hearing with live witnesses, both initially at the preliminary injunction hearing and now at the upcoming scheduled permanent injunction hearing (April 13 and 17, 2006 and "thereafter until concluded") (scheduled more than 3 months after the filing of the Complaint)

B. DEFENDANT SALA'S PRIOR EFFORTS TO AVOID A LIVE WITNESS TRIAL

1. Motion to Dismiss for Improper Venue (doc. no. 11)

At the argument on GNC's request for Temporary Restraining Order (conducted on February 27, 2006 together with the Initial Case Management Conference), defendant sought (and was granted) a delay on the TRO request to file the Motion to Transfer. In his Motion to Dismiss for Improper Venue or, in the Alternative, to Transfer Pursuant to 28 U.S.C. Secs. 1401/1406 (doc. no. 11) (filed March 1, 2006) and supporting brief (doc. no. 13) (plus Motion to Dismiss (doc. no. 18)), defendant Sala requested that this case be transferred to Florida to avail himself of a faster docket and obtain a speedier "day in court." Said Motions were denied (doc. nos. 20 and 22) on March 9, 2006.

2. Emergency Motion to Continue Hearing on GNC's Preliminary Injunction Motion (doc. no. 17)

When the preliminary injunction hearing was scheduled for March 16, 2006 (doc. 16), defendant Sala instantly filed an Emergency Motion to Continue Hearing on Plaintiffs' Motion for Temporary Restraining Order and for Preliminary Injunction, and Associated Deadlines (doc. no. 17), on the very same day the Scheduling Order was entered, which was granted in part and denied in part (doc. no. 21). Since defendant refused to bring forth live witnesses on the scheduled date, the Court decided to proceed on the existing record, granting defendant Sala the additional opportunity to supplement the record. Order of March 2, 2006 (doc. no. 21).

3. First Motion to Stay Permanent Injunction Trial (doc. no. 29)

The Court granted the preliminary injunction (doc. nos. 24 and 25) with detailed findings of fact and conclusions of law on March 20, 2006, and scheduled a permanent injunction hearing (Pretrial Order doc. no. 26 - March 20, 2006) for April 13, 2006, so the parties would have a prompt opportunity to present live testimony, and so the Court could make appropriate credibility ...


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