Florida Federal Judge Awards Franchisor Attorneys’ Fees in FDUTPA Case
On March 26th, 2018, a Florida federal judge awarded a franchisor more than $730,000 in attorneys’ fees after the company successfully defended itself against a Florida Deceptive and Unfair Trade Practices Act (FDUTPA) lawsuit. In this post, our experienced West Palm Beach franchise law lawyers analyze they key facts of this case, and we explain what litigants need to know about fee-shifting in FDUTPA claims.
Hard Rock Cafe Prevailed in a Counterclaim Against a Franchisee
Hard Rock Cafe International is a franchisor headquartered in Central Florida. A franchisee, HRCC, brought a lawsuit against this company alleging several different violations of the FDUTPA. The franchisee alleged that Hard Rock Cafe International violated Florida law by:
- Misrepresenting the amount of time it would likely take the franchisee to recover its initial investment; and
- Overstating the projected annual earnings that the franchisee could reasonably expect.
While franchisors are certainly not required to guarantee returns to investors, these companies do have a legal obligation to make fair and reasonable representations to actual and prospective franchisees. However, this case was eventually dismissed by multiple judges, for a variety of different reasons.
In its response to the lawsuit, Hard Rock Cafe International filed a counterclaim, arguing that HRCC was irresponsible in bringing this lawsuit and that the franchisee knew or should have known that it had no legitimate basis to prevail in this type of claim. A Florida federal judge agreed with the Hard Rock Cafe International legal argument, awarding the company full compensation for its attorneys’ fees.
Fee-Shifting in Florida Deceptive and Unfair Trade Practices Lawsuits
The FDUPTA contains a critically important fee-shifting provision. When appropriate, both plaintiffs who bring FDUPTA lawsuits and defendants who are facing FDUPTA lawsuits can seek reasonable attorneys’ fees from the opposing party in the case.
While Florida judges have some discretion to award attorneys’ fees under this statute, defendants will typically only be granted legal costs if the plaintiff’s lawsuit is deemed to be “frivolous or groundless”. In the aforementioned case regarding Hard Rock Cafe, several different courts noted that the plaintiff (franchisee) failed to present any evidence that it sustained actual damages, as is required by the statute. Thus, the lawsuit was deemed to be groundless, and the defendant (franchisor) was awarded attorneys’ fees.
If your company is facing a bad faith or frivolous lawsuit under the FDUTPA, you need a strong legal defense. If you prevail in the lawsuit, your business may be entitled to compensation for all legal fees that are reasonably related to defended the lawsuit.
Contact Our Florida Franchise Law Attorneys Today
At Pike & Lustig, LLP, our experienced franchise law lawyers have extensive experience serving business owners in Florida. We represent both franchisors and franchisees in a wide range of legal cases. To get a free, no obligation review of your claim, please contact our law firm today. We have offices in West Palm Beach, Wellington and Miami and serve franchise law clients throughout southeastern Florida, including in North Miami Beach, Hollywood, Fort Lauderdale, Jupiter, and Homestead.
Resources:
leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0501/part02.htm&StatuteYear=2005&Title=-%3E2005-%3EChapter%20501-%3EPart%20II
law360.com/articles/1026333/hard-rock-should-get-732k-fees-in-franchise-row-judge
