To Fund Ongoing Legal Disputes, Craft Beer Cellar Turns to Crowdsourcing

Embattled Massachusetts-based retail franchisor Craft Beer Cellar is asking the public for $250,000 that it says will be put toward “past, present and future legal demands.”

The request, posted to fundraising platform GoFundMe, comes about two months after the retailer’s parent company, “Craft Beer Stellar, LLC,” had a lawsuit against employment website Glassdoor dismissed by a federal judge in Massachusetts, and about one month after it filed a lawsuit against one of its franchisees.

In its lawsuit against Glassdoor, Craft Beer Stellar asserted that negative reviews of the craft beer retail company, which were posted anonymously to the employment website, violated the federal Defend Trade Secrets Act and the Computer Fraud and Abuse Act as well as the Massachusetts trade secrets statute and state Consumer Protection Act.

Craft Beer Stellar also claimed a “civil conspiracy,” and said Glassdoor aided and abetted reviewers in various “contractual breaches, torts, and other violations.”

Citing the “Communications Decency Act,” which protects websites from legal challenges against the content their users post, U.S. District Judge Frank Dennis Saylor IV granted Glassdoor’s request to dismiss Craft Beer Stellar’s lawsuit.

Saylor also dismissed claims that the anonymous reviews, which Craft Beer Stellar had alleged were written by current or former franchisees, violated trade secrets.

Reached by Brewbound, Craft Beer Stellar co-founder Suzanne Schalow declined to explain why the company had turned to crowdsourcing as a means of paying for its legal matters, or how it intended to use proceeds from the GoFundMe campaign.

“Running any business requires the employment of an attorney and a legal team,” she said. “We have put everything that we want people to know in that document.”

On November 19, Craft Beer Stellar, which oversees 32 franchise locations and one wholly-owned retail store, filed a lawsuit against one of its franchisees, Gardiner, Maine-based Hoppy Days, LLC.

In addition to naming a group of one or more anonymous individuals that allegedly posted confidential information to the Glassdoor website as part of that lawsuit, Craft Beer Stellar also named John Callinan, who owned and operated the now-shuttered northern Maine beer store, as a defendant.

Craft Beer Cellar co-founder Suzanne Schalow at Brewbound Session (2014)

Craft Beer Stellar is claiming breach of contract and again alleging violations of the Defend Trade Secrets Act, and the Computer Fraud and Abuse Act, as well as the Massachusetts trade secrets statute and Consumer Protection Act.

In the lawsuit, Craft Beer Stellar claims it has “suffered irreparable harm to its business and reputation in the craft beer industry,” and said the negative online reviews have caused the business to lose sales and “prospective business.”

It is seeking monetary and punitive damages, as well as injunctive relief.

Craft Beer Cellar’s GoFundMe page does not explicitly mention the lawsuit against Glassdoor or its pending litigation against Hoppy Days. However, it does refer to “false negative rhetoric,” which “challenges” the company’s “flawless reputation.”

“We are honest, good people, who some may just not like, because we are female, because we are married, and therefore lesbian, and because we are true entrepreneurs,” the campaign posting reads.

When asked if the fundraising effort stemmed from the lawsuit against Glassdoor, Schalow responded by saying “absolutely not.”

The lawsuits against Glassdoor and Hoppy Days are not the only instances in which Craft Beer Stellar has found itself in court. In 2016, the company was involved in a dispute with another one of its franchisees, who sued over territory rights that restricted another Craft Beer Cellar franchise from opening within a five-mile radius of the existing location. The two parties eventually reached a settlement with undisclosed terms, according to the Boston Business Journal.

As of press time, 12 individuals had pledged $625 toward the $250,000 goal. Among those who contributed are Idle Hands Craft Ales founder Chris Tkach and Firestone Walker territory manager Kristen Demergian.

Reached by Brewbound, Tkach said he used personal funds, not brewery funds, to donate to the campaign, adding “Suzanne and Kate have been big supporters since Day One.”

“I don’t want to see their stores go away,” he said. “I want to make sure they are able to survive whatever they are going through.”

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