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Scandinavian Airlines System Denmark-Norway-Sweden v. McDonald's Corp.

November 20, 1997

SCANDINAVIAN AIRLINES SYSTEM DENMARK-NORWAY-SWEDEN, PLAINTIFF-APPELLANT,

v.

MCDONALD'S CORPORATION, CHICAGO AVIATION PARTNERS, A JOINT VENTURE OF MCDONALD'S CORPORATION AND DUTY FREE INTERNATIONAL, INCORPORATED, CARSON INTERNATIONAL, INCORPORATED, ET AL., DEFENDANTS-APPELLEES.



Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division. No. 94 C 2269 Robert W. Gettleman, Judge.

Before BAUER, KANNE, and DIANE P. WOOD, Circuit Judges.

BAUER, Circuit Judge.

ARGUED OCTOBER 28, 1997

DECIDED NOVEMBER 20, 1997

Scandinavian Airlines System ("SAS") filed a three count complaint against McDonald's Corporation ("McDonald's"), Chicago Aviation Partners ("CAP") which is a joint venture of McDonald's and Duty Free International, Inc. ("Duty Free"), and Carson International, Inc. ("Carson"), alleging that McDonald's joint venture with Duty Free violated the joint venture agreement between SAS, McDonald's, and Carson, misappropriated a business opportunity to which SAS was entitled, and breached McDonald's fiduciary duty to SAS. These claims arose in connection with an alleged joint venture formed between SAS, McDonald's, and Carson for the purpose of pursuing a contract opportunity with the City of Chicago to develop and operate concessions stands and duty-free shops at the new international terminal of O'Hare International Airport. McDonald's, CAP, and Carson filed motions for summary judgment, and the district court granted summary judgment. SAS now appeals. We affirm.

Background

In December of 1990, the City of Chicago issued a Request for Proposal ("RFP1"), seeking proposals for the development and operation of concessions stands and duty-free shops at the new international terminal of O'Hare International Airport. SAS, McDonald's, and Carson initiated discussions to form a joint venture for the purpose of pursuing the City contract.

On March 29, 1991, the parties signed a Letter of Intent, indicating their mutual intent to negotiate and form a joint venture to pursue the City contract at the new international terminal. Thereafter, on April 1, 1991, SAS, McDonald's, and Carson submitted their proposal to the City under the name "Creative Forces Partnership." The proposal included a cover letter which indicated that Creative Forces Partnership was a planned joint venture to be owned equally by SAS, McDonald's, and Carson for the purpose of submitting a proposal to the City and pursuing the contract at the new international terminal of O'Hare International Airport. In June of 1991, SAS, McDonald's, and Carson presented their proposal to the City, and in July of 1991, they supplemented their original proposal as requested by the City. Despite their efforts to draft a joint venture agreement, SAS, McDonald's, and Carson did not enter into any final agreement.

On July 2, 1992, the City accepted another proposal which was submitted by Host International ("Host") and began to negotiate a contract with Host. The City notified McDonald's and Carson that it had selected another bid and was in the process of negotiating with Host. Carson notified SAS on July 30, 1992 that the City had not selected the proposal of Creative Forces Partnership.

The City of Chicago, however, terminated its negotiations with Host in November of 1992. As a result of these failed negotiations, the City prepared a new request for proposals, soliciting new submissions for the contract to develop and operate the concessions stands and duty-free shops at the new international terminal. In December of 1992, the City of Chicago issued a Second Request for Proposal ("RFP2"). In January of 1993, McDonald's and Duty Free submitted a proposal pursuant to RFP2 under the name "Chicago Aviation Partners." *fn1 Thereafter, on February 13, 1993, the City accepted CAP's proposal, and on March 25, 1993, the City and CAP entered into a contract.

Upon learning of McDonald's contract with Duty Free and the City, SAS filed suit in April of 1994, alleging that McDonald's violated its joint venture with SAS and Carson by failing to inform SAS of RFP2 and by entering into a contract with Duty Free to form a joint venture and with the City to develop and operate the concessions stands and duty-free shops at the new international terminal of O'Hare International Airport. In its complaint, SAS claimed that McDonald's and Carson breached the joint venture agreement for failure to advise SAS of RFP2. In addition, SAS asserted that McDonald's and CAP misappropriated a business opportunity, and breached a fiduciary duty owed to SAS.

After discovery was completed, McDonald's, CAP, and Carson moved for summary judgment. The district court granted ...


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