Puerto Rico distributor loses tortious interference case

Ballester Hermanos, a Puerto Rico distributor, had a verbal exclusive distribution agreement with Brugal rum since 1990. In 2008, Edrington acquired 60 % of Brugal’s shares. Ballester Hmnos v. CC1 Beer Distributors, 2024 WL 4369162 (TA Aug. 5, 2024). The existing distribution relationship continued after the acquisition. In 2019, Edrington decided to terminate the relationship with Ballester and transfer it to CC1, its primary distributor. Brugal did not continue to supply products to Ballester. It is not clear from the opinion if Ballester sued Brugal and Edrington under Law 75 in another forum or venue. In the state court, Ballester sued CCI and Edrington Americas for tortious interference. The TPI granted defendants’ motions for summary judgment and the appellate court declined to review. The outcome that followed is hard to follow. CCI prevailed on the theory that its appointment occurred after Edrington had terminated the agreement with Ballester so it could not have interfered with an existing contract. This result is at odds with current doctrine that a Law 75 agreement continues in operation indefinitely by law and public policy until and if the principal proves just cause. As to Edrington Americas, the court held that it was in fact the principal, and as such, it was not a third party to the contract capable of tortious interference. This was so despite Edrington’s admission in the pleadings that it was a third party to the contract. But as a purported legal admission the court did not find it binding as are factual admissions, and therefore, was disregarded. The appellate court expressly did not pass on claims or issues under Law 75 because it was not asserted in the pleadings. My impression is that stand-alone tortious interference claims are difficult to prove without joinder of the principal as a necessary party or absent the assertion of Law 75 claims in the same suit.