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Search Int'l, Inc. v. Snelling & Snelling, Inc.

United States District Court for the Northern District of Texas, Dallas Division

April 9, 2001, Decided ; April 10, 2001, Filed; April 11, 2001, Entered




On November 29, 2000, Plaintiffs Search International Inc. and Kent Little filed suit in this Court against Defendant Snelling & Snelling, Inc., alleging violations of 15 United States Code section 1 (Sherman Anti-Trust Act), and violations of Texas Business and Commerce Code sections 15.05 (unlawful practices in restraint of trade) and 17.46 (Texas Deceptive Trade Practices Act). Now before this Court is Defendant's Motion to Dismiss the Sherman Anti-Trust Act claim pursuant to Federal Rule of Civil [**2]  Procedure 12(b)(6), filed on January 29, 2001. Also before this Court is an Application to Stay and Compel Mediation and Arbitration for the Texas Business and Commerce Code claims, filed on January 29, 2001. For the reasons stated below, the Motion to Dismiss is GRANTED and the Anti-Trust claim is DISMISSED WITH PREJUDICE. The Motion to Stay and Compel Mediation and Arbitration is DENIED and the Texas Business and Commerce Code claims are DISMISSED WITHOUT PREJUDICE.


The Plaintiffs filed their Original Complaint on November 29, 2000 and the Defendant filed the Motion to Dismiss that is now before this Court on January 29, 2000. Subsequently, the Plaintiffs filed their First Amended Original Complaint (Amended Complaint) on February 23, 2001. According to the Plaintiff's one-page response to the Defendant's Motion to Dismiss, the Amended Complaint cures any defects in the Original Complaint. Therefore, this Court will consider the facts contained in the Amended Complaint and the attached Exhibits in ruling on this Motion.

 [*623]  Defendant, Snelling & Snelling, Inc. (Snelling), has been a franchisor of career and temporary personnel staffing [**3]  businesses since 1951. Defendant is incorporated in the state of Delaware and has franchises throughout the United States. Defendant's principal place of business is located in the state of Texas. In 1994, Defendant began to acquire corporate stores in addition to operating through its franchises. Some of the corporate stores were purchased from existing franchisees and some were purchased from competitors of existing franchisees. Many of the corporate stores were located in close proximity to other Snelling franchises. During this time period, Snelling continued to enter into agreements with new franchisees.

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168 F. Supp. 2d 621 *; 2001 U.S. Dist. LEXIS 4459 **; 2001-1 Trade Cas. (CCH) P73,271


Disposition:  [**1]  Defendant's Motion to Dismiss the Plaintiffs' claim under 15 U.S.C. § 1 GRANTED and that claim DISMISSED WITH PREJUDICE. Defendant's Motion for Stay and to Compel Arbitration DENIED and the remaining state law claims DISMISSED WITHOUT PREJUDICE.


franchisees, franchise, conspiring, unilateral, concerted, Arbitration, personnel, restrain, incapable, entities

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Dismissal, Involuntary Dismissals, Failure to State Claims, Antitrust & Trade Law, Sherman Act, Claims, International Trade Law, General Overview, Commercial Law (UCC), Sales (Article 2), Form, Formation & Readjustment, Jurisdiction, Jurisdictional Sources, Governments, Courts, Judicial Comity, Subject Matter Jurisdiction, Jurisdiction Over Actions, Supplemental Jurisdiction, Pendent Claims