What was the date the JTH Tax LLC v. John T. Hewitt case was settled, impacting Ledgers?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
set.
Concluded Actions:
JTH Tax LLC d/b/a Liberty Tax Service v. John T. Hewitt, Loyalty LLC, ATAX LLC, ATAX Franchise, Inc. and Yneva Marte (Case No.2:21-cv-00076-RBS-LRL) filed February 4, 2021 in the United States District Court for the Eastern District of Virginia. Plaintiff filed the action alleging that ATAX franchisees maintained signage that is confusingly similar to trade dress and logos of the plaintiff. The Plaintiff also alleges that Mr. Hewitt tortiously interfered with certain contractual relations by discussing with existing and former franchisees of the Plaintiff opportunities at ATAX. The complaint alleges that Mr. Hewitt breached his employment agreement by sharing and using trade secrets, confidential and proprietary information for his own benefit or the benefit of a third party by convincing existing and prospective franchisees of the Plaintiff to leave and instead open ATAX franchises. Lastly, the complaint alleges that Mr. Hewitt engaged in a conspiracy to unfairly compete against and damage Liberty Tax by convincing customers and prospective customers to pick ATAX over Liberty Tax. Plaintiffs sought $20 million in actual damages, treble damages, costs, and legal fees along with injunctive relief. The Defendants have denied the allegations. The matter was settled on December 31, 2021. Under the Settlement Agreement, Defendants agreed to pay the Plaintiff $545,000 over 6 years, and to refrain from: (1) unfairly competing with Liberty Tax by tortiously interfering with its franchise agreements; (2) diverting or attempting to interfere with or divert any leases from Liberty; (3) palming off any of ATAX's products or services as those of Liberty; (4) any action or statement that could reasonably cause likelihood of confusion that any ATAX location is associated with Liberty; (5) possessing, misappropriating, using or disclosing Liberty's confidential information; and (6) accessing any of Liberty's computer systems or databases. ATAX agreed to permanently close three specific ATAX locations and use their best efforts to assign leases for those locations to Liberty. The Court retained jurisdiction to
Source: Item 3 — LITIGATION (FDD pages 11–16)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the case of JTH Tax LLC d/b/a Liberty Tax Service v. John T. Hewitt, Loyalty LLC, ATAX LLC, ATAX Franchise, Inc. and Yneva Marte was settled on December 31, 2021. This case was filed on February 4, 2021, in the United States District Court for the Eastern District of Virginia.
The lawsuit was initiated by the plaintiff alleging that ATAX franchisees were using signage confusingly similar to Liberty Tax's trade dress and logos. The plaintiff also claimed that Mr. Hewitt tortiously interfered with contractual relations by discussing opportunities at ATAX with existing and former Liberty Tax franchisees. Further allegations included Mr. Hewitt breaching his employment agreement by sharing trade secrets and confidential information to benefit himself or a third party, and conspiring to unfairly compete against Liberty Tax by convincing customers and prospective franchisees to choose ATAX instead. The plaintiffs sought $20 million in actual damages, treble damages, costs, legal fees, and injunctive relief.
Under the settlement agreement, the defendants agreed to pay the plaintiff $545,000 over six years and to refrain from several activities, including unfairly competing with Liberty Tax, diverting leases from Liberty, misrepresenting ATAX's products or services as those of Liberty, causing confusion between ATAX and Liberty, misusing Liberty's confidential information, and accessing Liberty's computer systems. ATAX also agreed to close three specific locations and attempt to assign the leases for those locations to Liberty. The court retained jurisdiction to enforce the final consent order. While this case does not directly involve Ledgers, it involves John T. Hewitt, who is associated with Loyalty LLC, which is affiliated with Ledgers.