36.2 Use the IRAC Method to breifly identify the Issue, the Legal Rule (Legal Te

Question

36.2 Use the IRAC Method to breifly identify the Issue, the Legal Rule (Legal Test), the Facts Applied to the Test (Analysis), and the Conclusion/ Holding of the given case.

Century 21 Real Estate, LLC v. All Professional Realty, Ind. United States Court of Appeals, Ninth Circuit, 600 Fed.Appx. 502 (2015). Background and Facts Carol and Steve Wright owned All Professional Realty, Inc., and All Profes sional Hawaii Re Real Estate, LLC, to operate offices in Sacramento and Folsom, California, and Honolulu, H alty, Inc. The Wrights' companies signed four franchise agreements with Century 21 the name "Century 21 All Professional." The agreements required All Professional to pay royalty and advertising fees. They also permitted Century 21 to terminate the agreements for good cause, includ- ing the franchisee's failure to operate at an approved location.

Explanation / Answer

On January 21, 2011, this Court granted Plaintiff CENTURY 21 REAL ESTATE LLC's ("Plaintiff and Counter-Defendant") Preliminary Injunction against defendants STEVEN M. WRIGHT, CAROL WRIGHT, and ALL PROFESSIONAL REALTY, INC. (hereinafter collectively referred to as "Defendants and Counterclaimants"). (Document 28, Memorandum and Order Re: Motions for a Preliminary Injunction, a copy of which is attached hereto as Exhibit 1.)

On August 8, 2012, Honorable William B. Shrub, judge for the U.S. District Court for the Eastern District of California, filed a 28-page decision granting franchisor Century 21 Real Estate LLC’s (“Century 21”) motion for summary judgment against its former franchisee. As a result of the summary judgment, all of the former franchisee’s claims were dismissed, and Century 21’s claims for breach of contract, breach of guarantee, and trademark infringement were granted.

The case involves a lengthy but typical fact pattern often encountered in franchise litigation. The parties entered into four franchise agreements for the operation of three franchised locations in the Sacramento, California area, and the fourth location in Honolulu, Hawaii. After several years of seamless operation, the franchisee closed one of its Sacramento locations as a result of financial struggles. The franchisee did not seek or obtain approval from Century 21 before closing the store. Several months later, Century 21 terminated the franchise agreement tied to the store on the grounds of abandonment

All Professional asserts that Ms. Bertet was improperly instructed not to answer certain questions, and she was not properly prepared for her deposition. Ms. Bertet did not recall pertinent information, and All Professional contends that other employees had more knowledge on certain issues but Century 21 did not produce them. All Professional complains that Ms. Bertet was only knowledgeable about Realogy's general collection policies and practices regarding payment plans, but otherwise lacked personal knowledge on most of the designated matters. In response, Century 21 argues that a corporate designee need not have personal knowledge.

The former franchisee ultimately filed a lawsuit in California State Court against Century 21 for violation of the termination provision of the California Franchise Relations Act (“CFRA”), violation of California Unfair Competition Law, breach of contract, fraud and other various claims. These claims were premised upon allegations that Century 21 (1) disclosed the former franchisee’s confidential financial information to other franchisees, allowing those franchisees to recruit the former franchisee’s employees, (2) allowed other businesses to dilute its trademark causing customer confusion and the resulting loss of business to the former franchisee, and (3) terminated the franchise agreements in bad faith in order to move a different franchisee into the territory. The case was removed to the Eastern District of California by Century 21.

Shortly thereafter, Century 21 filed a separate lawsuit in the Eastern District of California asserting claims of trademark infringement, federal unfair competition, breach of contract, breach of guaranty and related claims. Century 21 also filed a lawsuit in New Jersey concerning the Hawaii franchise as a result of the New Jersey forum selection clause in the franchise agreement. All cases were ultimately transferred to the Eastern District of California and consolidated into a single action.

Issue

The "issue" is the legal issue. It doesn't ask just any interesting question. It only asks whether THE LAW has anything to say about a particular topic. A classic example of this is a potential legal client who comes in and says that her boss is mean and rude -- he yells and screams and makes work wholly unpleasant. The client wants to know if she has a claim. I already know that there is no law (no rule) that generally prohibits a boss from being a jerk. However, experience tells me that the question should be:

(For those of you with quick logical minds, yes, this means there are forms of lawful discrimination.)

2) Rule

The "Rule" has two important parts. A lawyer, a judge, or whomever has to say what a rule is and where it comes from.

a) State the Rule

That rule says (paraphrasing): "It is unlawful to treat someone in a manner that negatively affects the terms and conditions of employment, if the affected person is in a 'protected class' and is treated differently from a 'similarly situated person' not in her protected class."

Each of the logical pieces you can break it into are called the "elements" of the rule. So, you could say the "elements" of discrimination are

Each of these pieces contain legal terms of art, terms that have their own legal rules. So, you'd actually end up with some nesting here.

b) Cite the Rule

The law is based on existing rules. Even when a decision is based upon what is "fair" (which isn't that often), it's because there's a rule that says that the decision of this type of issue will be based on fairness. And, there are so many rules that no one can know them all. So, an argument has no weight unless it says exactly which rule is being relied upon. As you've seen already this presents a variety of challenges:

If the lawyer provides the wrong law, she can lose the case (or the legal analysis), even if in the cosmos she should have won (ie., there's a law out there that gives her the result she wants). The law has mistakes in it, so the lawyer has to cite the law that exists and then provide some sort of annotation that explains why it's a mistake and/or where the mistake is. Like the Web, there are lots of versions of the same or similar things. You'll see this in case law. There can be lots of decisions that say the same thing on a particular issue. There are often decisions that cite other decisions for support. And, there's more than one publisher, so there's more than one citation to the exact same court decision. Within certain boundaries, any of these citations might be used.

In this example, the rules are:

3) Fact

There are lots and lots of facts that make up the client's story. For the purpose of legal analysis, we look for "material" facts. These are the facts that fit the elements of the rule.

So, in the example, we need to know: if the boss' behavior "affected" a "term or condition of employment"; if the potential client is in a "protected class"; if there are "similarly situated" employees; and if they've been treated in the same manner or differently. The facts that turn out to be relevant are:

4) Analysis

At this stage, we see if our material facts fit the law. So, in the example, we'll say

5) Conclusion

We see that all "elements" of the rule are met and conclude that her boss engaged in unlawful discrimination.

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