NY: US District Court Strikes Down Brewer’s Attempt to Circumvent Franchise Laws

United States District Court Judge Garaufis in Brooklyn has ruled that New York’s beer franchise statute protects distributors from arbitrary termination. The Court ruled that an importer is a “successor brewer” under the current law and as such is not allowed to terminate its wholesaler without showing good cause.  The importer had attempted to terminate its contract with the wholesaler by arguing that because it acquired its license from the brewer rather than a private importer that it was not legally defined as a “successor brewer.”  The court noted, “When a brewer interposes an intermediary in an existing supply relationship with a wholesaler, statutorily imposing the brewer’s obligations on the intermediary shields the wholesaler from arbitrary termination.”    Separate counts relating to New Jersey and Connecticut franchise law were postponed with the court asking for additional briefing. 

Read the ruling here.

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