The premier Blog devoted to current developments of Puerto Rico's franchising and distribution laws and jurisprudence, including the Dealer's Contract Law 75 and Sales Representative Law 21. © since 2009 Ricardo F. Casellas. All rights reserved.
Monday, February 10, 2025
Some cases or appeals just leave me wondering….
Smart Distributors, an alleged distributor, alleged that Garraton, a Puerto Rico distributor, contracted with it verbally to serve as the distributor in Puerto Rico of many pharma products manufactured by Haleon. Smart v. Garraton, 2024 WL 5348678 (TA Dec. 13, 2024). Smart alleged that, for over a year, it performed promotional services and closed sales contracts with customers worth over $2 million in sales. Garraton suspended sales to Smart alleging that Haleon had prohibited it (where’s the antitrust claim for collusion?). Smart sued both defendants apparently only under Law 75. The trial court denied Haleon’s motion to dismiss and appealed on various grounds, first, that Smart was not a Puerto Rico distributor, and even if it was, that it had just cause. The appellate court denied certiorari basically holding that interlocutory appeals of this sort should wait until the record is more fully developed. I would have thought that who qualifies for protection as a Law 75 dealer and the existence of just cause are factually-intensive issues which almost never are susceptible to a dismissal on the pleadings. Or Halceon may have believed that its argument that it had no contractual relationship at all had more traction, but belied by the allegations that there was substantial commercial activity pre-termination suggesting the establishment of a dealer or sub-dealer relationship.