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Tim-Minn, Inc. v. Tim Hortons USA, Inc.

United States District Court, D. Minnesota

July 3, 2019

Tim-Minn, Inc., Plaintiff,
v.
Tim Hortons USA, Inc. and Restaurant Brands International Limited Partnership, Defendants.

          ORDER

          ELIZABETH COWAN WRIGHT UNITED STATES MAGISTRATE JUDGE

         This case is before the Court upon Plaintiff Tim-Minn, Inc.'s (“Plaintiff”) Motion to Stay and for Leave to Conduct Limited Jurisdictional Discovery (Dkt. No. 14). Steven L. Reitenour, Gerald A. Marks and Steven Keppler appeared on behalf of Plaintiff Tim-Minn, Inc. Michael D. Joblove and R Henry Pfutzenreuter appeared on behalf of Defendants Tim Hortons USA, Inc. (“THUSA”) and Restaurant Brands International Limited Partnership (“RBI”).

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Jurisdictional Allegations in the Initial Complaint

         On February 20, 2019, Plaintiff initiated the present action against Defendants THUSA and RBI. (Dkt. No. 1.) The gravamen of this case is a dispute between a franchisor (and its parent) and a franchisee. In the present operative Amended Complaint, Plaintiff alleges that it is a franchisee and area developer for Tim Hortons restaurants in Minnesota. (Dkt. No. 11 ¶¶ 1, 3.) THUSA is the U.S.-based franchisor for Tim Hortons restaurants in the United States. (Id. ¶¶ 24, 155.) RBI is alleged to be the Canadian-based parent of THUSA. (Id. ¶¶ 25-26.)

         With regard to the subject matter jurisdiction of the Court, Plaintiff's initial Complaint alleged that “the parties are citizens of different states and the matter in controversy exceeds the sum of $75, 000.00, exclusive of interest and costs.” (Dkt. No. 1 ¶ 18.) Plaintiff further alleged that it is a Minnesota corporation whose principal place of business is in Minnesota; that THUSA is a Delaware corporation whose principal place of business is in Florida; and that RBI “is a foreign entity with corporate offices and U.S. headquarters in . . . Florida.” (Id. ¶ 25.)

         B. March 5, 2019 Order

         In her March 5, 2019 Order (Dkt. No. 10), U.S. District Judge Joan N. Ericksen issued an Order giving Plaintiff the opportunity to cure the jurisdictional defects in the Complaint related to the citizenship of RBI:

Restaurant Brands International is allegedly a limited partnership. “When one of the parties to the action is a limited partnership, the citizenship of each general and limited partner must be considered in determining whether complete diversity of citizenship exists.” Barclay Square Props., 893 F.2d at 969; see Americold, 136 S.Ct. at 1015; Carden v. Arkoma Assocs., 494 U.S. 185, 192-97 (1990); cf. Great Lakes Gas Transmission Ltd. P'ship v. Essar Steel Minn. LLC, 843 F.3d 325, 328 (8th Cir. 2016). Tim-Minn did not allege the citizenship of Restaurant Brands International's partners.
* * *
The Court grants Tim-Minn an opportunity to file an amended complaint. Within seven days of the date of this Order, Tim-Minn shall file an amended complaint that rectifies the deficiencies noted above. If it fails to do so, the action is subject to dismissal for lack of subject-matter jurisdiction.

(Dkt. No. 10 at 2-3 (parenthetical omitted).)

         C. Amended Complaint

         In response to Judge Ericksen's Order, Plaintiff filed the currently operative Amended Complaint on March 11, 2019. (Dkt No. 11.) Plaintiff added the following allegations related to the citizenship of RBI:

Defendant, RBI, is a Canadian entity with corporate offices and U.S. headquarters in Miami, Florida, located at 5505 Blue Lagoon Drive, Miami, Florida 33126. RBI is a privately held, limited partnership which, upon information and belief, does not disclose the identity of all of its limited partners. That said, publicly available documents establish that RBI was, as of RBI's February 22, 2019[, ] 2018 Amended 10-K, 92% owned by an entity known as 3G Restaurant Brands Holding[s], LP (“3G RBH”), itself an “affiliate” of 3G Capital Partners, Ltd, a Brazilian/U.S. investment firm with offices in Rio de Janiero [sic] and New York City; 3G RBH enjoys 41% of the “combined voting power” in the Limited Partnership. Corporate Governance documentation on RBI's website further indicates RBI is controlled by Restaurant Brands International, Inc. and 8997896 Canada, Inc. Upon information and belief, Restaurant Brands International, Inc., and 8997896 Canada, Inc., are Canadian entities. Therefore, upon information and belief, RBI is a wholly-foreign entity with no known limited partners domiciled in the State of Minnesota.

(Dkt. No. 11 ¶ 25.)

         D. April 17, 2019 Order

         In her April 17, 2019 Order (Dkt. No. 13), Judge Ericksen again concluded that Plaintiff's jurisdictional allegations were insufficient. In particular, Judge Ericksen found that while Plaintiff alleges that RBI was a Canadian corporation, it did not allege where RBI's principal place of business is located. (Id. at 3.) In addition, based on the Form 10-K cited in the Amended Complaint, Judge Ericksen noted as follows:

According to the Form 10-K that Tim-Minn cited, “[t]he capital of Partnership consists of three classes of units: the Partnership Class A common units, the Partnership preferred units and the Partnership exchangeable units. The interest of [Restaurant Brands International Inc.], as the sole general partner of Partnership, is represented by Class A common units and preferred units. The interests of the limited partners is represented by the Partnership exchangeable units.” Annual Report (Form 10-K) 47 (Feb. 22, 2019). “3G Restaurant Brands Holdings LP (‘3G RBH') currently owns approximately 92% of the Partnership exchangeable units . . . .” Id. at 19. “The Partnership exchangeable units trade on the Toronto Stock Exchange (‘TSX') under the ticker symbol ...

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