Friday, September 21, 2012
Newborn Law 75 cases are moving upstream in the federal court
Both involve declaratory actions. In V. Suarez & Co. v. Welch’s Foods, Inc., No. 12-cv-1490 (FB), Puerto Rico’s largest distributor struck first in federal court asking for declaratory judgment and alleged potential (but not actual) termination damages alleging that VSC did not breach an obligation prohibiting activites with competing products in the distributorship agreement with Welch’s, a producer of grape juice products, when it acquired Campofresco, a local producer of Lotus-branded 100% juices, including grape juice. The case also involves allegations of an alleged impairment of contract from sales to club stores. The case is at the pleading stage and Welch’s will appear in due course to answer or move with respect to the Complaint. Note: The author represents Welch’s. The other action, Quaker Oats Corp. v. Ballester Hermanos, Inc., No. 12-cv-1712 (GAG), involves an action by Quaker Oats for the Court to declare what the amount of damages will be under Law 75 in the event of an unjustified termination of the dealer’s contract. Quaker Oats concedes that Law 75 applies and that it would not have just cause, but the parties (or their experts) disagree as to the amount of potential damages. Quaker intends to terminate the relationship effective from the filing of the complaint and seeks a declaration of how much money it will cost. Stay tuned.