Jack’s Abby Craft Lagers and Atlantic Importing and Distributing of Rhode Island will face off in a courtroom as the lawsuit between the two companies will go to trial, a Rhode Island Superior Court judge ruled today.
In the interim, the Framingham, Massachusetts-based craft brewery must resume selling its products to Atlantic RI for distribution within the Ocean State, according to an order from Justice Brian P. Stern.
“The agreement between Atlantic RI and Jack’s Abby is to remain in full force and effect for a period not to exceed one year during the course of any arbitrations or judicial proceedings,” he wrote.
Atlantic RI, the sister company of Holliston, Massachusetts-based distributor Atlantic Beverage Distributors (Atlantic MA), filed a lawsuit against Jack’s Abby in Rhode Island’s Providence/Bristol County Superior Court on July 23 to prevent the brewery from terminating its partnership in the state. Jack’s Abby informed Atlantic RI of its intent to terminate their relationship in June, almost six months after it had successfully ended its relationship with Atlantic’s Massachusetts operation in January.
In mid-July, Jack’s Abby named Sheehan Family Companies-owned Craft Rhode Island as its successor wholesaler in the state, several weeks after it had appointed Sheehan’s Craft Massachusetts, L. Knife & Son and Seaboard Products as its new Massachusetts distributors. Those changes followed the conclusion of a contentious arbitration process between the brewery and Atlantic. However, Craft Rhode Island must now cease sales of Jack’s Abby products, Atlantic RI’s attorney, J. Mark Dickison, told Brewbound.
Jack’s Abby filed an opposition to Atlantic’s motion for preliminary injunction on September 1 that alleges Atlantic’s Rhode Island branch “probably only really exists on paper, and may not even be a real business.” According to that filing, all three parties agreed in March 2017 that Jack’s Abby would ship its products to Atlantic MA, which would act as a supplier and sell inventory to Atlantic RI.
In theory, Jack’s Abby’s termination of Atlantic MA also meant the termination of its relationship with Atlantic RI; without Jack’s Abby selling beer to Atlantic MA, Atlantic RI would have no way to receive it. Stern disagreed.
“Thus, it is clear to the Court that Jack’s Abby still viewed Atlantic RI as Jack’s Abby’s ‘wholesaler’ with respect to the brands even after the parties, including Atlantic MA, agreed to a new arrangement after March 2017,” he wrote.
Stern ruled that the relationship between Jack’s Abby and Atlantic RI falls within the state’s definition of a malt beverage supplier-wholesaler agreement and that Atlantic RI is entitled to the protections afforded to wholesalers under the law.
According to Rhode Island law, “any supplier which without good cause cancels, terminates or fails to renew any agreement … is subject to compensatory damages, equitable relief, or both.”
“All of the terms and conditions of an agreement between the parties shall remain in full force and effect for a period not to exceed one year during the course of any arbitration or judicial proceedings brought to enforce any rights under an agreement or under this chapter,” the law continues.
Stern ordered an “expedited discovery” in the lead up to the trial between Jack’s Abby and Atlantic RI.
“The court does not believe that resolution of this case will take one year,” Stern noted.
A trial date has not yet been set.