Winery Exchange v. 7-Eleven – $2 million Supplier Dispute

An interesting case in the United States District Court for the Northern District of California recently came to our attention. Winery Exchange (“WX”), a private label wine and beer producer, has sued 7-Eleven Corporation (yes, that 7-Eleven ) alleging it breached a series of Private Label Beer Supplier Agreements to the tune of approximately $2.0 million. What piqued our interest was that WX sought a Right to Attach Order (“RTAO”) against 7-Eleven  as part of its case. An RTAO is a provisional remedy whereby a plaintiff in a breach of contract case can attach (i.e., freeze) a certain amount of the assets of the defendant if certain statutory requirements are met. Among the requirements for an RTAO are that the amount of damages sought be “certain” and that the attachment itself be sought for a “proper purpose.” Typically, this means that the amount of damages sought be easily ascertainable by referring to the contract at issue and that attachment be sought due to legitimate concerns about the defendant’s financial ability to ultimately satisfy any judgment entered in the action. According to Lex Vini’s sources present at the February 23, 2012 hearing on WX’s Application for RTAO, the Judge found there was insufficient evidence on these two key points to grant WX’s Application, and accordingly denied it. However, this case is far from over as these parties still must battle over the alleged $2.0 million breach. Stay tuned.

For more information or assistance on litigation matters in the alcohol beverage industry contact Dave Balter at [email protected]

Copyright Dickenson Peatman & Fogarty at www.lexvini.com