1st BATCH OF FILES AVAILABLE NOW!

WA judge seemed to be leaning this way and now he made it official: he granted Olympic Eagle rare preliminary injunction vs Constellation, stopping Constellation's termination/forced consolidation in its tracks. In same ruling late yesterday, he similarly denied STZ's motion to reconsider the temporary restraining order. Judge found: 1) "high likelihood of success" for Olympic vs Constellation based on state alc bev franchise law protections; 2) if Constellation terminated Olympic, that "would cause Olympic Eagle irreparable harm"; 3) the balance of equities tips in Olympic's favor and 4) it's in the public interest to maintain status quo of the current distribution agreement. So temporary restraining order is now "converted" and Constellation is "ENJOINED from terminating the Distribution Agreement without cause." WOW! What Olympic Eagle "Stands to Lose Cannot Be Fully Compensated by Subsequent Monetary Damages "It's well established that monetary injuries are generally not considered irreparable harm," WA court acknowledged (which is why injunctions are rare). But in Olympic Eagle vs Constellation case, "an ongoing business representing many years of effort and livelihood of its&hellip;owners, constitutes irreparable harm," judge wrote. "What plaintiff stands to lose cannot be fully compensated by subsequent monetary damages." Court sided with Olympic's arguments that it will lose goodwill and reputational harm among remaining suppliers and customers if Constellation is able to terminate. Court also took issue with Constellation's decision to notify retailers of a switch in distribution "despite its awareness that" Olympic and Columbia Dist "have not agreed on fair market value of the distribution rights, as required by Constellation's own interpretation of the consequence of a without cause termination" under state alc bev franchise law. But importantly, he also ruled that WA law didn't allow termination without cause.WA Law "Deemed to Be Incorporated Into Every" Distrib Agreement Regardless of Contract WA alc bev franchise law protections are "deemed to be incorporated into every agreement of distributorship" and "the parties cannot contract around the protections offered by the Act" in court's view. Judge repeatedly references and relies on several lawsuits vs Pabst in 2017, where court ruled that WA law does not authorize without cause terminations. In fact, "several courts have interpreted the Act to not permit termination without cause, and the legislature has failed to amend this language despite having ample opportunity to do so," said judge. One previous case from 2003, involved Constellation's wine biz.Judge "disagrees" with Constellation's view that language used in WA franchise law "impliedly authorized without cause termination." It flat out "does not," Judge wrote, but rather "requires suppliers to give distributors sixty days' notice and a chance to rectify any claimed deficiency" (our emphasis). Only exceptions are "fraud, bankruptcy, or license revocation&hellip;or in the event the supplier acquires rights to manufacture or distribute a new product." And court is "convinced" WA law's reference of without cause terminations "is not an authorization of them but merely an acknowledgement" that they "happen, and when they do, it mandates that the successor distributor purchase the terminated distributors' inventory and compensate it for its lost distribution rights." Constellation had no comment at press time.

Judge Grants Olympic Eagle Preliminary Injunction, Stopping Constellation's Forced Consolidation

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