001242 Burger King Cleared In Black Franchisee's Lawsuit

Detroit - A federal judge has ruled Burger King Corp. did not break a promise with a black Detroit businessman to let him open more than 200 restaurants, setting the stage for the chain's bid to revoke his existing franchises.

“This battle may have been won by Burger King, but the war is far from over,” the man's attorney said.

In a case that prompted the Rev. Al Sharpton to call for a boycott of world's No. 2 fast-food chain, U.S. District Court Judge Marianne Battani ruled Thursday that La-Van Hawkins had signed away any right to sue Miami-based Burger King in a “clear and unambiguous” July 1999 agreement.

Hawkins' Urban City Group sued Burger King in federal court in April, accusing company of fraud and reneging on a deal to let Hawkins open 225 stores within five years. Burger King argued it never made such a promise and countersued, seeking more than $6.5 million it says Hawkins owes on a 1998 loan.

Hawkins sought at least $500 million and an injunction to prevent Burger King from closing his 20-plus franchises nationwide in retaliation. Hawkins also alleged that Burger King treated him like a pawn, courting him because of his race and then using it against him to squelch his dream of owning a string of Burger Kings in underserved communities.

In arguing that Burger King racially discriminated against him, Hawkins accused the chain of once saying “those people don't know how this system works,” in reference to Hawkins' largely black organization.

Regardless, Battani wrote in her ruling that Hawkins failed to state a claim for relief and that he had signed a forbearance agreement that included releasing his right to claims against the company.

Barry Blum, Burger King's chief legal counsel, called Battani's ruling “well-reasoned” and correct, allowing the chain to now focus on pursuing a court order forcing Hawkins to relinquish control of 22 restaurants in Detroit, Chicago, Atlanta, Baltimore and Washington, D.C.

Hawkins attorney Norman Yatooma said his client would ask Battani to reconsider her ruling, then appeal to the 6th U.S. Circuit Court of Appeals , if necessary.

Yatooma said the forbearance agreement by law was “not binding in any sense of the word,” and that Hawkins was duped into signing it, believing it would extend his credit line.

“That agreement, much like the entire relationship with Burger King, was induced through fraud,” Yatooma said. “He simply was not made aware of what he was signing.”

Battani's ruling, he added, “doesn't change the facts of the case. La-Van Hawkins still was made a promise by Burger King, and Burger King has broken that promise. They have not given him the stores to which he was entitled.”

In its federal countersuit, Burger King sought to force Hawkins to return all of the company's property - including outdoor signs - in addition to millions of dollars from a reported 1998 loan.

Hawkins has said Burger King offered to settle the lawsuit more than once for more than $30 million, but he rejected those offers.

Hawkins and his supporters have spent thousands of dollars on radio ads and a letter-writing campaign against the restaurant chain. Burger King responded with an appeal to Detroit's religious and political leaders.

Sharpton, the head of the National Action Network, cited Hawkins' cases in initially threatening a nationwide boycott against Burger King, but he later relented and said it would begin on a city-by-city basis. In October, the civil rights leader called for a Burger King boycott in New York City because it has a large black population and has no black franchise owners.

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