Franchise Litigation: Understanding the Role of Discovery in Franchise Litigation | Franchise Law Blog

Franchise Litigation: Understanding the Role of Discovery in Franchise Litigation

Can A Default Judgment Be Entered Against a Franchisee – Even if The Franchisee Answered the Complaint?

Answer: Yes‚ when the franchisee defendant continuously fails to comply with a discovery order.  In Jackson Hewitt‚ Inc. v. Barnes Enterprises‚ et al. United States District Court – District of NJ) the court entered default judgment against a franchisee defendant who had answered the complaint but failed to comply with the courts discovery order.  The entry of a default due to a discovery failure is an uncommon remedy but‚ from the facts of this case appears appropriate.  Especially since the defendant franchisee actively litigated a number of issues in the case but‚ selectively‚ ignored all discovery obligations.

Franchise Litigation Factors to Consider: Based on the courts decision in Jackson Hewitt‚ franchisors and franchisees should be aware of the following litigation factors:

When dealing with litigation‚ economics play a large factor.  Most times‚ cases settle when the parties proceed with an aggressive litigation and discovery strategy.  Interestingly‚ while a lax approach to discover is‚ in the short-term‚ less expensive‚ it usually leads to an unproductive and never ending litigation track that wastes money and time.

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Date: 11/30/2011 | Category: Corporate Counsel

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