Court rejects allegations of “exclusive” territory in oral beer distribution agreement
Much of this centers on the plaintiff distributor’s failure to properly plead an oral agreement. But the interesting point is the exclusivity. Without pleading exclusivity, there’d be no need for an injunction as a brewer/distiller would be free to enter into an agreement with another distributor and simply start selling to that distributor allowing them to sell in the territory alongside the distributor facing termination.
A beer distributor brought suit against Jinro America claiming the distributor had been granted exclusive distribution rights in Nevada to distribute HiteJinro branded beer and soju and that the soju/beer maker was improperly attempting to terminate that relationship. The distributor requested the court enter an injunction to stop Jinro from allowing the beers to be sold through another distributor during the pendency of the lawsuit.
In denying the distributor’s request for an injunction, the court noted in its opinion (you can read that here) that the complaint filed by the distributor was devoid of any facts showing how the oral agreement was reached or who negotiated it and that the supporting evidence was “vague about the oral agreement’s terms.”
The notion of an oral agreement to be the exclusive distributor for the beverages was the best the court could discern from the distributor’s evidence (testimony from some representatives).
The brewer/distiller had competing evidence from representatives claiming the opposite – in fact stating that there was “no oral agreement.”
In the end, leaving the court with little option but to say:
This leaves me with the fact that all of [the distributor’s] claims depend on its ability to establish that it entered into a purely oral agreement with [brewer/distiller] to be its exclusive wholesaler of HiteJinro-branded beer and soju alcoholic beverages in Nevada. Based on this record, I cannot find that [distributor] has demonstrated that it is likely to succeed on the merits of establishing the existence of such an agreement. Nor can I find that there are serious questions going to the merits of the existence of such an agreement.