Antitrust Lawsuit Between Dunkin’ Donuts Suppliers Dismissed

An antitrust lawsuit between two New Jersey Dunkin’ Donuts suppliers ended after Judge Michael A. Shipp ordered the dismissal of the plaintiff’s complaint. He granted the defendants’ Motion for Summary Judgement.

Central Jersey CML filed the complaint alleging antitrust violations in December 2017. Central Jersey CML, represented by Grace Marmero, is a company that was seeking approval to begin operations of a baking facility and distribute baked goods to local Dunkin Donuts locations. They alleged the South CML conspired against them and violated Antitrust laws.

The defendants; including Kaushik Patel, Ashwin Chaudhary, Dipen Patel, Yogesh Patel, Vipul Patel, Gulu Puri, Nilesh Patel, Danny Saparia, the estate of Suresh Patel, and Atul Patel, are represented by Flaster Greenberg. They are members of the South CML and deliver inventory to Dunkin’ Donuts stores in Southern New Jersey. They were approved to deliver products by Dunkin’ Brands Group, Inc. in December of 2013 and signed supply agreements with about 80 franchises.

According to the memorandum in support of the order dismissing the case, Paresh Patel and Alexander McCourt, both involved in the South CML, together formed the Central CML without alerting the other members of the South CML. Later they invited the defendants to purchase an ownership share in the Central CML. The defendants decided not to invest and wrote to Dunkin’ Brands executives expressing that decision.

“(The South CML) is not part of this proposed venture, nor were they consulted,” the letter said, “the vast majority of the Members/Managers of (the South CML) are largely loyal Dunkin’ Brands franchises who have made significant investments in the (South CML). The creation of a Trenton facility will directly impact their business operations and potentially cause them to suffer significant monetary losses.” They clarified that although a member of the South CML was involved in the effort to begin the Central CML, he was not acting on behalf of the South CML.

The plaintiff claimed these actions were an attempt to boycott and withhold from doing business with the Central CML because of a fear that competition would increase to receive an offer of a higher initial percentage ownership if they decided to buy in. The defendants say they simply did not want to be involved with the Central CML because McCourt and Paresh Patel were asking for a $350,000 investment in exchange for a 5 percent share.

In the memorandum, the judge says that there is no evidence that the defendants have a monopoly on the geographic market and says that the plaintiff did not establish a causal link between the Defendants’ actions and any injury to the Central CML. The court also says there is no evidence that the Central CML would have been approved if the defendants did not send the letter.

“The letter did not impact McCourt’s ability to secure signed service agreements, as required for CML approval, or submit the required documentation … both of which McCourt admitted he failed to do,” the memorandum opinion states.