On Deck, a Franchise Dispute

When the parties in Maris Distributing vs. Anheuser-Busch take their dispute to court as expected within a few months, the spectators are likely to include more than the idly curious. The case has its share of marquee appeal, pitting the family of late New York Yankee and St. Louis Cardinal home run star Roger Maris against the nation's biggest beer maker. But it may also have something to say about the relationship between franchiser and franchisee under Florida law. "I would expect all franchisers would be interested in the outcome," says University of Florida business law professor Stuart Cohn, who has been watching the case unfold in state and federal court in Gainesville and Ocala.

August Busch Jr., former owner of the Cardinals, Maris' final team, gave the slugger the distributorship in 1967 as a reward for Maris' on-field feats. But in 1997, Anheuser-Busch Corp. terminated its distribution contract with the Maris family (Maris died in 1985), spawning a bitter dispute that's paper-choked with accusations of fraud, conspiracy and dirty dealing on both sides.

Maris Distributing, led by President Rudy Maris, Roger's brother, alleges that Anheuser-Busch terminated the contract because it wanted the lucrative north central Florida territory for itself. "Maris (Distributing) was enormously profitable and growing by leaps and bounds," says Orlando lawyer Bernard Dempsey, who represents Maris Distributing.

According to the complaint Dempsey filed in Alachua County Circuit Court, Anheuser-Busch officials put Maris Distributing under intense scrutiny in order to build a record of deficiencies that would force the Maris family to sell. After the distributorship twice refused Anheuser-Busch's offer of about $20 million -- a price Maris claims was far below market value -- Anheuser-Busch terminated Maris' right to distribute its products in the Gainesville and Ocala areas and transferred the territory to two other distributors, the suit says.

In its countersuit, Anheuser-Busch claims that Maris Distributing fell below contract-specified standards in such areas as vehicle and warehouse maintenance, promotional efforts and keeping out-of-date beer off the market. The brewer also alleges that Maris engaged in fraud to cover up problems. Anheuser-Busch deputy general counsel Royce J. Estes wrote that the brewer "took every step possible" to avoid ending its relationship with the Maris family, but that failure to correct the "alarmingly poor conditions" of the operation left Anheuser-Busch with no choice.

Maris Distributing claims its deficiencies were minor, that Anheuser-Busch piled them together as an excuse to force out the Maris family. According to its lawsuit in state court, Anheuser-Busch's behavior constitutes a breach of good faith and fair dealing. (The federal suit alleges that Anheuser-Busch conspired to limit its competition in the beer market.) "I think we've got an excellent case for being reinstated and being awarded our damages," Dempsey says. "We believe a jury will return in excess of $100 million in the state case," he says.

Whatever the result, Professor Cohn believes the case could help clarify some issues surrounding the franchiser/franchisee, manufacturer/distributor relationship -- particularly the question of what behavior constitutes a breach of "fair dealing" by a franchiser and what rises to the level of "material breach" of terms by a franchisee. Contracts typically favor the franchiser, and Cohn says the courts will have to look there first. But, he says, in areas not clearly covered by contract, the courts can use the concept of "good faith" to "impose standards of conduct" on the franchiser. "It could become quite important because there's not much case law in Florida," he says.