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Civil Procedure Keyed to Field
Grunin v. International House of Pancakes
Citation:
513 F.2d 114 (8th Cir. 1975)Facts
International House of Pancakes franchisees filed consolidated actions alleging that IHOP violated federal antitrust laws by requiring franchisees to lease restaurant equipment and purchase various products and services exclusively from IHOP or IHOP-approved suppliers as a condition of obtaining a franchise. The franchisees claimed these tying arrangements were illegal under the Sherman and Clayton Acts and that IHOP charged prices greatly exceeding fair market value. After extensive discovery, the parties negotiated a first settlement in April 1973 that provided monetary damages but did not materially amend equipment leases. The district court rejected this settlement in July 1973, finding it perpetuated alleged antitrust violations. A second settlement was proposed in November 1973, offering franchisees options to purchase equipment at reduced rates or continue leasing at lower costs, limiting required purchases to pancake flour and coffee, and creating a $500,000 fund for former franchisees. The court approved this settlement and awarded $1.25 million in attorneys’ fees, which various parties appealed.
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