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Mumford v. GNC Franchising LLC

October 11, 2007

JEAN ANN MUMFORD, SPIRIT ENTERPRISES INC., KARYN DELANEY, AND BLUE SEA ENTERPRISES, INC., PLAINTIFFS,
v.
GNC FRANCHISING LLC, GENERAL NUTRITION CORP., GENERAL NUTRITION DISTRIBUTION CORP., AND APOLLO MANAGEMENT LP, DEFENDANTS.



The opinion of the court was delivered by: Conti, District Judge

MEMORANDUM ORDER

Jean Anne Mumford ("Mumford"), Spirit Enterprises, Inc., Karyn Delaney, and Blue Sea Enterprises, Inc. (collectively, the "plaintiffs") owned and operated franchise stores subject to franchise agreements with defendants General Nutrition Corporation ("GNC"), GNC Franchising LLC, and General Nutrition Distribution LP (collectively, the "GNC Defendants"). Plaintiffs filed a civil action alleging various antitrust violations under sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1, et seq. (the "Sherman Act"), and the Robinson-Patman Price Discrimination Act, 15 U.S.C. § 13(a) (the "Robinson-Patman Act"), and asserting state law claims for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of contract as third-party beneficiary, and negligent and fraudulent misrepresentation. GNC Defendants did not file an answer to plaintiffs' claims or file any counterclaims against plaintiffs. Instead GNC Defendants moved to dismiss all plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state claims.

On June 29, 2006, this court entered an order dismissing with prejudice plaintiffs' federal antitrust claims under the Sherman Act and the Robinson-Patman Act. This court then declined to exercise supplemental jurisdiction over plaintiffs' pendent state law claims and dismissed those claims without prejudice at the same time.

On July 24, 2006, GNC Defendants filed a motion to reopen this case and to award them attorneys' fees and costs (the "Motion"). GNC Defendants argued that they are the prevailing party in this matter, and that as the prevailing party, they are contractually entitled to attorneys' fees and costs pursuant to the prevailing party clauses of the franchise agreements between plaintiffs and GNC Defendants. The court held a hearing on the Motion on July 20, 2007, and indicated that the Motion would be denied as untimely under Federal Rule of Civil Procedure 54(d)(2). GNC Defendants were granted an opportunity to file a supplemental brief on the issue of the timeliness of the Motion. GNC Defendants filed their supplemental brief on July 30, 2007.

For the reasons set forth below and on the record at the hearing on the Motion, the motion will be denied without prejudice to GNC Defendants' right to file a new complaint asserting a claim under the relevant franchise agreements and seeking damages.

Discussion

Rule 54(d) of the Federal Rules of Civil Procedure addresses claims for attorneys' fees and the methods by which a party can recover attorneys' fees in a civil action. The relevant provisions of Rule 54 are:

Rule 54. Judgments; Costs

(a) Definition; Form. "Judgment" as used in these rules includes a decree and any order from which an appeal lies. A judgment shall not contain a recital of pleadings, the report of a master, or the record of prior proceedings. . . . .

(d) Costs; Attorneys' Fees.

(1) Costs Other than Attorneys' Fees.

Except when express provision therefor is made either in a statute of the United States or in these rules, costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs; but costs against the United States, its officers, and agencies shall be imposed only to the extent permitted by law. Such costs may be taxed by the clerk on one day's notice. On motion served within 5 days thereafter, the action of the clerk may be reviewed by the court.

(2) Attorneys' Fees.

(A) Claims for attorneys' fees and related nontaxable expenses shall be made by motion unless the substantive law governing the action provides for the recovery of such fees ...


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