Gordon Grocery, Inc. v. Associated Wholesalers, Inc. (Maryland U.S.D.C.) (Approved for Publication)

Signed February 28, 2007--Memorandum opinion by Judge Andre M. Davis. (Approved for publication.)

Held: Dispute over stock redemption procedures remanded back to state court on the basis of mootness.

Plaintiff Gordon Grocery, Inc. ("Gordon Grocery") is a shareholder in defendant Associated Wholesalers, Inc. ("Associated"), which is a Pennsylvania corporation operating as a cooperative engaged in the business of purchasing, manufacturing, processing, warehousing and distributing food and related merchandise for retail merchant shareholders such as plaintiff. In the fall of 2005, Associated notified Gordon Grocery that it had failed to satisfy the minimum purchase requirements of the cooperative, and that Associated would redeem Gordon Grocery's shares, thereby terminating their relationship. Associated proposed to do so in two installments, one-third initially, and two thirds in 2010, while Gordon Grocery asserted the right to immediate redemption, and filed in state court for a declaratory judgment to that effect. Associated had the case removed to federal court.

During discovery, Associated elected to rescind the redemption determination and retain Gordon Grocery as a shareholder, thus rendering the dispute over redemption procedures abstract, and moved for summary judgment on the ground of mootness. The judge agreed, but rather than rendering the requested "judgment" in favor of Associated, remanded the case to state court from which it had been removed, where the judge speculated (but declined to decide) that the state trial court might determine it lacks subject matter jurisdiction on the ground of mootness.

The memorandum opinion is available in PDF.