Source: https://www.law360.com/, Brian Dowling
April 12, 2021: A Massachusetts beer and wine wholesaler has lost a legal challenge seeking to prevent its key supplier, Jack's Abby Brewing LLC, from breaking off their distribution deal under a new state law, according to a ruling made public Monday.
Suffolk Superior Court Justice Karen Green said Atlantic Importing Co. Inc. had failed to convince her it was likely to prevail in its suit, which challenges the validity of Jack's Abby's termination notice and the constitutionality of a state law passed in January to make it easier for craft brewers to walk away from wholesalers.
In a one-page order dated Wednesday and posted online Monday, Justice Green also said Atlantic didn't show that any potential harm from the breakup was truly irreparable and couldn't just be fixed by payment of damages.
Atlantic filed suit against Jack's Abby last month following the brewery's notice that it was terminating the wholesaler's distribution rights under a new law allowing craft breweries to get out of undesirable relationships with wholesale partners.
The wholesaler wanted the court to halt an arbitration panel designed to determine the fair market value of the distribution rights, a sum that the brewery would owe the wholesaler under the January law.
The arbitration is scheduled to start April 19 with four days of hearings to determine what the brand's distribution rights are worth.
Atlantic had attacked Jack's Abby's termination notice as flawed because it failed to identify which wholesaler would be taking over the work. Atlantic also claimed the underlying law - which took effect in January after a compromise between craft brewery and wholesaler industry groups - violated the state's constitution in mandating arbitration to decide valuation disputes.
The Framingham, Massachusetts, brewery explained that it wanted out of its distribution arrangement with Atlantic due to cratering sales, and the new law allowed it for the first time to walk away without having to show cause.
Justice Green telegraphed her thinking on the case at the end of oral arguments over the preliminary injunction request last week, telling the parties she didn't see irreparable harm despite Atlantic's claims that it faced significant harm to its reputation by losing such a premier brand.
Atlantic counsel J. Mark Dickison of Lawson & Weitzen LLP said the company is appealing the decision and also asking the arbitration panel to dismiss the arbitration.
"Atlantic believes it has an enforceable, binding contract to be the exclusive distributor for Jack's Abby and it will continue to fight to uphold its contractual rights - a contract that Jack's Abby voluntarily agreed to and from which it willingly received the benefit of over $1.5 million in marketing support," Dickison told Law360.
Jack's Abby co-owner Sam Hendler said Monday the company is "heartened that the court rejected Atlantic's arguments to veer off" the course that the new law established.
"From the start, we have had one clear goal - determine a reasonable fair market value for the brands, pay Atlantic and move on with the work required to stabilize this brewery which has had a very challenging year," Hendler said. "We look forward to that process playing out."
Representatives for Atlantic were not immediately available for comment.
Atlantic Importing is represented by J. Mark Dickison, Joshua M.D. Segal and John R. Bauer of Lawson & Weitzen LLP.
Jack's Abby is represented by Kenneth B. Walton and Amanda E. Mathieu of Lewis Brisbois Bisgaard & Smith LLP and John P. Connell of Upton Connell & Devlin LLP.
The case is Atlantic Importing Co. Inc. v. Jack's Abby Brewing LLC, case number 2184CV00725, in the Suffolk County Superior Court of Massachusetts.
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AMID PANDEMIC, MARTIGNETTI COMPANIES SEEKS TO UNITE AND SUPPORT WOMEN OF THE BEVERAGE ALCOHOL INDUSTRY
Source: MARTIGNETTI COMPANIES
February 12, 2021
Martignetti Companies, the leading distributor of alcoholic beverages in Massachusetts, will host the 7th annual Women's Beverage Alcohol Symposium virtually on Wednesday, February 24th.
The Women's Symposium brings together women working in all facets of the beverage alcohol industry and is offered free of charge. It is a day dedicated to enhancing professional skills, learning to achieve work-life balance and networking.
This year's event will be held virtually. Martignetti Companies will continue its partnership with The Gloria Cordes Larson Center for Women and Business. New this year is a collaboration with GK Training. The CWB at Bentley and GK Training will provide valuable content for the online event through their Professors and Educational Networks.
Fawn Germer will be this year's keynote speaker. Fawn is an expert on workplace relevance and has done multiple TED talks on topics including work life reset and finding your next big thing. She is best-selling author of eight books including Hard Won Wisdom and Mustang Sallies.
The only symposium of its kind in New England, Martignetti Companies and its suppliers provide access to inspiring speakers, relevant skills training, and resources free of charge to women in the beverage alcohol industry.
For more information or to register as a guest or member of the media contact WBAS@Martignetti.com or visit https://www.martignetti.com/events/trade-events.
For the full release visit: https://www.martignetti.com/getattachment/Events/Trade-Events/2021/Women-s-Beverage-Alcohol-Symposium/Press-Release-Martignetti-Women-s-Bev-Alc-Symposium-2021.pdf.aspx
About Martignetti Companies
Established in 1908, Martignetti Companies has grown to become the leading distributor of wine and spirits in New England and the 7th largest in the country. Martignetti Companies currently has sales operations in five New England markets: Massachusetts, Rhode Island, New Hampshire, Vermont, and Maine. Based in Taunton, Massachusetts, the company operates in Massachusetts as United Liquors, Carolina Wine & Spirits, Classic Wine Imports and Commonwealth Wine & Spirits and in other New England states as Martignetti Companies of New Hampshire, Maine and Vermont, and Rhode Island Distributing Company through a joint venture. For more information, visit Martignetti.com.
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Distribution Bill Makes It To Baker's Desk
Matt Murphy1/6/21 4:24 PM
JAN. 6, 2021.....Sam Hendler was still in his office at Jack's Abby brewing in Framingham at 2:45 a.m. on Wednesday, with a livestream of the proceedings in the Massachusetts House playing on his computer.
Hendler, the founder of the brewery, had spoken to Senate President Karen Spilka on the phone about an hour earlier, and everything seemed to be falling into place. After 10 years, the Legislature was on the cusp of finally approving a deal he helped negotiate with beer wholesalers over distribution rights for small craft beers.
But he needed to watch the vote himself. He would wind up driving home and watching the final vote from bed.
"I'm a neurotic kid," Hendler said Wednesday after some sleep. "I was sure it was going to get done, then 100 percent sure it was not going to get done. It was probably somewhere between midnight and 1 a.m. that it seemed some stuff really broke through."
In the waning moments of the legislative session early Wednesday morning, the House and Senate came together to pass a bill that would make it easier for craft brewers to sever their contracts with their distributor if they feel their product is not being properly marketed.
The issues has been a matter of bitter debate over the past decade as distributors fought to preserve their contract rights, and small brewers sought greater flexibility to grow their brand as the craft beer market exploded.
Under current law, a brewer is locked into their relationship with a distributor indefinitely after six months of doing business together, unless they can prove to state regulators that the distribution company violated one in a set of very specific conditions. Small brewers have said that this can inhibit their ability to grow sales, especially if a distributor serves larger, more established clients and doesn't prioritize their craft brand.
"I'm thrilled. We're waiting anxiously for a signed bill. We have learned our lesson that nothing is done until it's done but are very, very excited to have cleared this hurdle," Hendler said.
The Massachusetts Brewers Guild and the Beer Distributors of Massachusetts announced in July that they had struck a deal to allow any qualified brewer that produces under 250,000 barrels of beer a year to terminate their relationship with their current distributor without having to show cause.
In exchange, the brewer would have to pay fair market value for the brand and buy back the wholesaler's inventory and promotional materials. One key component of the compromise was that the threshold was set at a level that would exclude Boston Beer, the brewer of Sam Adams, from the arrangement.
But after the Senate quickly passed the legislation that had been agreed to by all stakeholders, the bill languished in the House, until Wednesday night.
Spilka alluded to some "concerns" House leaders had with the bill, and an amendment was agreed to soon after that had to do with what might happen if a court struck down any part of a new law an unconstitutional.
The bill before Gov. Baker now makes clear that if any part of the new arrangement is deemed unconstitutional, such as the 250,000 barrel threshold, then the whole law would become void and the status quo contractual relationships between brewers and distributors would remain in place.
Bill Kelley, president of the Beer Distributors of Massachusetts, described the changes as "wordsmithing" and something his organization supported. Hendler said the brewers also approved of the new language, and did not view it as altering the underlying intent of the bill.
The other changes involved removing a section that gave the Alcoholic Beverages Control Commission the authority to award legal fees to the prevailing party in a dispute over distribution rights, according to those involved in the talks.
Joe Salois, the owner and president of Atlas Distributing in Auburn, helped negotiate the original bill and the changes, and was also up watching as the final votes were taken at 3:20 a.m.
"Last night was probably the first all-nighter I've had since I was a teenager," Salois said. "It turned out to be a long night and long process, but a great night and an achievement we're all proud of."
Now both sides will wait to see how Baker responds to the bill. Because the session ended Wednesday night, he can either sign it or veto it, but there is no opportunity for further amendments.
"I have only reason to believe there will be full support from the governor and the lieutenant governor," Salois said. "We're hopeful and would obviously love to see the governor sign it."
Massachusetts Package Stores Association, Inc.
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