Posted by: Patricia Salkin | May 10, 2009

McDonald’s Litigation Reinstated after Appeals Court Determined That Failure to Join Necessary Parties Was Not Fatal

Petitioners sought to annul the approval of various applications submitted by McDonald’s USA, LLC for the construction of a restaurant. The trial court dismissed the petition because the petitioners failed to name all of the owners of the subject property, these were necessary parties, and at that point in the proceeding, the statute of limitations had expired with respect to these necessary parties.

The appeals court first noted that although by the time of the appeal the restaurant had been built, this fact would not render the matter moot since the petitioners were not seeking injunctive relief to prevent construction, but rather they sought modifications that would not require demolition of the restaurant. While the appeals court agreed that at the time of the initial petition, the property owners in question were indeed necessary parties, the trial court should have ordered that they be part of the proceeding, rather than granting the motion to dismiss. The court noted that, “the expiration of the statute of limitations…is not the equivalent of a jurisdictional defect…” and that under New York law, the trial court was required to summon the necessary parties (see, N.Y. CPLR 1001(b)). However, since the parties have now conveyed their interest in the property to McDonald’s, the appeals court said they are no longer a necessary party. The court reinstated the petition.

Yaeger v. Town of Lockport Planning Board, 2009 WL 1163854 (N.Y.A.D. 4 Dept. 5/1/2009).

The opinion can be accessed at: http://www.courts.state.ny.us/ad4/court/Decisions/2009/05-01-09/PDF/0357.pdf

For an article discussing the challenges with regulating formula-based businesses such as McDonald’s see:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1358706


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