Ballester Hermanos Faces Legal Storm with Edrington Over Distributor Interference

Ballester Hermanos, Inc., the exclusive distributor of Brugal rums in Puerto Rico since 1990, has sued Edrington Group USA, LLC for tortiously interfering with their distribution relationship, which was under Puerto Rico’s Law 75. Edrington acquired a majority interest in Brugal in 2008 and later terminated the verbal distribution agreement with Ballester in favor of a different distributor, CC1 Beer Distributors, Inc. Ballester claims that Edrington's actions constituted tortious interference. Edrington sought to dismiss the claims, arguing that Ballester failed to join CC1 as a necessary party and did not state a plausible claim of tortious interference. However, the court ruled that CC1 was not an indispensable party and that Ballester adequately pled Edrington as a third party to the agreement. The court also asserted that under Law 75, the oral agreement could not be terminated at will and thus met the contract element of a tortious interference claim, even if the contract did not have a fixed term. This sets a precedent in Puerto Rico that firms must consider Law 75 in distributor agreements, especially when no formal written contracts exist.