Round Two: Major Brands v. Mast-Jager, SGWS

Dear Client:

Earlier this month, a US District Court judge granted Mast-Jagermeister’s and Southern Glazer’s Wine & Spirits’ motions to dismiss a case brought against the two companies by Missouri-based wholesaler Major Brands for allegedly violating Missouri franchise law.

Major Brands filed an amended complaint to which Jager and SGWS recently filed separate motions to dismiss the case, claiming MB still hasn’t adequately made its case.

BACKGROUND. In February 2018, Mast-Jagermeister notified its distributor network that it intended to consolidate its US footprint with Southern Glazer’s Wine & Spirits. Mast-Jager’s Missouri distributor, Major Brands, promptly filed suit against both the supplier and SGWS, alleging violation of Missouri franchise law [see WSD 02-13-2018]. Major Brands argues Mast-Jager did not establish the “good cause” necessary for termination in Missouri.

In its motion to dismiss, Mast-Jager argued that MB is not a franchisee of Jagermeister and “has failed to allege facts that demonstrate otherwise,” characterizing the relationship as “nothing more than a run-of-the-mill vendor/vendee relationship,” per Mast-Jager’s attorneys [see WSD 04-05-2018].

SGWS filed its own motion to dismiss the case, echoing the issues that Jager brought up.

The judge was inclined to agree with Jager and SGWS, granting their motions to dismiss in part, while also giving MB the opportunity to file an amended complaint. In its amended complaint, MB provided more evidence to drive home the fact the two companies did in fact have a franchise relationship [see WSD 04-11-2019].

ROUND TWO. In Jager’s motion to dismiss the amended complaint, the supplier claims MB still fails to state a claim upon which relief can be granted. “Major Brands’ second bite of the apple fares no better, as the first amended complaint fails to cure any of the factual and legal deficiencies in the original complaint,” per court documents.

Moreover, Jager says the evidence that MB supplied to show that it was given a license to use Jager’s trademark and a community of interest were “mere marketing efforts, which are the hallmark of any ordinary distribution relationship,” and not a franchise one.  

Similarly, SGWS writes in its own motion to dismiss that MB still fails to state a claim. SGWS alleges MB “made no effort to include any factual allegations to support” the unjust enrichment and recoupment claims against the wholesaler, adding “Nor can it,” per the motion to dismiss.

SGWS also contends that MB’s allegations of using “improper means” are “pure legal conclusions without any factual support whatsoever.”

MB RESPONDS. In a response to both motions to dismiss filed last week, MB says it “followed the direction of the court” providing more facts and a fuller description of its “close, long-time relationship” with Jager.

MB claims the motions to dismiss its amended complaint “either ignore or mischaracterize the allegations.” For example, as mentioned above, Jager characterizes the wholesaler’s efforts to promote the brand in the state as “mere marketing efforts,” which MB calls “misleading and false.”

The wholesaler says it has provided “more than ample support” for its claims against both Jager and SGWS, adding that “the harm to Major Brands from its groundless and summary termination, at [SGWS’s] inducement, is apparent.”

HESS FAMILY WINE ESTATES BUYS NAPA VINEYARD

Hess Family Wine Estates has announced the acquisition of Napa Valley-based Iron Corral Vineyard as part of its long-term acquisition strategy to beef up its Napa holdings, per a release.

The Iron Corral Vineyard sits on 420 acres, 186 of which are planted, mostly to cabernet sauvignon. This brings Hess Family’s grand total to 872 arable vineyard acres in Napa Valley.

The plan is to use Iron Corral to form the backbone of the winery’s Lions Head Collection portfolio as well as supply future new luxury product introductions coming down the pike. They will also continue to sell grapes from the vineyard to other producers for the foreseeable future.  

“Over the last five years, we have been looking strategically at Napa Valley vineyards that support our cabernet sauvignon expansion and Iron Corral is a perfect fit for us,” says chairman Timothy Persson. “We have been farming in the Napa Valley region since the late 1970s, we know what it is capable of in the cabernet arena and we could not be more excited.”

WSD BRIEFS:

CONSTELLATION TAKES MAJORITY STAKE IN NELSON’S GREEN BRIER. In case you missed the news alert this morning, Constellation Brands announced it has acquired a majority stake in Tennessee-based Nelson’s Green Brier Distillery, marking the first Constellation Ventures investment to be fully integrated into the portfolio [see WSD 05-02-2019].

DIAGEO LAUNCHES SMIRNOFF ZERO SUGAR INFUSIONS. Smirnoff Zero Sugar Infusions are 30% abv and will launch in three flavors; Cucumber & Lime, Watermelon & Mint and Strawberry & Rose. To support the launch, long-time brand partner actor Ted Danson and Saturday Night Live cast member Cecily Strong will be featured in several TV spots. The new line will be available in stores nationwide this month for about $12 a 750 ml.

RECKLESS LOVE WINES INTRODUCES SUNDAY FUNDAY SAUV BLANC. Sunday Funday Sauvignon Blanc uses grapes sourced from Mendocino, Sonoma County, Lake County and Clarksburg. It will be available in select markets nationwide for approximately $11 a 750 ml.

BLACK BUTTON DISTILLING TO RELEASE LILAC GIN. Black Button Distilling announced this year’s limited release of its Lilac Gin will be May 10. The distillery first released Lilac four years ago and since then has released the gin annually for the spring season. It will now be available in 375 ml and 750 ml offerings in select liquor stores in Rochester, Buffalo and Ithaca, New York starting next week.

Until tomorrow,
Sarah

“One mistake will never kill you. The same mistake over and over will.” – Harvey Mackay

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