Beauty Store Business

JAN 2015

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68 January 2015 | beautystorebusiness.com Beauty & The Law manufacturer was in the wrong all along. The former employee sued the manufac- turer for malicious prosecution in bringing the first lawsuit. The trial court found for the manufacturer and dismissed the case, and the former employee appealed the decision. The California appellate court agreed with the trial court, hold- ing that the manufacturer's assertion that it dismissed the first case because of an extortionate threat overcame the presumption that dismissals generally mean that the plaintiff did not have enough grounds to win a case. Here the manufacturer found itself on the receiv- ing end of a lawsuit, even though it had withdrawn the suit it originally brought. This case demonstrates how a party can lose control of the litigation process and should always expect the unexpected. ✔ The Slip-and-Fall. Janet J. was shop- ping in the beauty aisle of a Wal-Mart in Ohio at the same time as another shop- per was riding in a motorized shopping cart supplied by the Wal-Mart. The two either crashed or Janet fell while she was trying to avoid the cart and seriously hurt her ankle. Janet sued, saying that Wal- Mart should have warned her of the risks of having motorized shopping carts, and should have told the other shopper how to use the cart safely, among other things. The trial court ruled against Janet on a motion before trial and she appealed. The appeals court agreed that it was obvious that colliding with a motorized shopping cart would be dangerous, and Janet didn't have any evidence that the cart was used improperly. Stores have the duty not to injure customers through negligence and to warn customers about hidden dangers the store knows about. Stores also have to inspect to make sure they know about dangers and to warn customers against foreseeable dangers. Here, both Janet and the person in the cart knew they were coming around a blind corner, but that's not a hidden danger since it's com- mon sense that people have to be careful when they turn corners. Slip-and-fall cases are very common whenever a customer is injured in a store. Most of the time the store owner will have insurance to defend these cases, which are often settled. The fact that this case didn't settle indicates that the defendant was sure that it didn't violate any duty it had to keep Janet safe. ✔ Trademark Infringement. When Sally Beauty Holdings, Inc. started a new line of products called Mixed Silk for mixed-race women, it bought an argument with Mixed Chicks, LLC, which already made a product line for mixed- race women called Mixed Chicks. Mixed Chicks sued Sally Beauty Holdings, Inc. in Texas after it learned about Mixed Silk. While the case was still pending, Inc. magazine brought in experts to give their opinions, one of whom warned that the expense of litigation against a large company could bleed a small company dry. Sally Beauty reported in its January 2013 quarterly report that a jury had found that Sally Beauty infringed Mixed Chicks' trademark and trade dress and awarded Mixed Chicks more than $800,000 in actual damages and $7.275 million in punitive damages. While Sally Beauty said it believed the jury was wrong, Sally Beauty paid Mixed Chicks $8.5 million to settle the case and avoid further proceedings. From a defendant's point of view, this case shows that even if you believe that you have done noth- ing wrong, there's always a lot to lose in business disputes. And from Mixed Chicks' perspective, this case demon- strates how valuable it can be to stick to your guns. ■ This copyrighted article is intended to help make you aware of some of the issues that you may face, but it is not exhaustive and does not constitute legal advice. You should consult your lawyer for legal advice about the particular circumstances of your beauty business. Jean Warshaw is a lawyer in private practice in New York City. She provides advice on business and environmental law. She can be reached at 212.722.2240.

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