Collins Drugs, Inc. v. Walgreen Co.

Brief Fact Summary.

Collins Drugs, Inc. (Collins) sued Walgreen Co. (Walgreens) for terminating a contract that provided Collins and other pharmacies with drugs manufactured by Walgreens.

Synopsis of Rule of Law.

A business may not cancel all of its dealings with Wisconsin under the Wisconsin Fair Dealership Law without cause.

Facts.

Collins Drugs, Inc. (Collins) and other pharmacies contracted with Walgreen Co. (Walgreens) for Walgreens to provide Collins with drugs manufactured by Walgreens. The contract stipulated that Walgreens could terminate the agreement with 30 days notice. Walgreens terminated the contract with 30 days notice after not receiving the expected yield from their contract with Collins. Collins sued under the Wisconsin Fair Dealership Law (WFDL).

Issue.

Whether a business may cancel all of its dealings with Wisconsin under the Wisconsin Fair Dealership Law without cause?

Held.

No. Partial summary judgment was granted to Collins because Walgreens terminated the contract without good cause. Partial summary judgment was also granted to Walgreens for the pharmacies who entered into contract with Walgreens prior to the WFDL becoming effective.

Discussion.

The WSDL seeks to redress an imbalance of power between dealers by providing recourse to economically weaker dealers who are terminated from contracts with economically stronger dealers. The WFDL prohibits grantors from terminating agreements after April 5, 1974 without good cause.