The contentious legal battle between sparkling hard tea and canned cocktail maker Loverboy and Night Shift Distributing over the FMB maker’s attempt to terminate the Massachusetts-headquartered wholesaler without paying fair market value for its brand rights has ended with an amicable resolution.
According to a September 9 filing in the United States District Court for the District of Massachusetts, Loverboy, the plaintiffs, and the defendants, Night Shift Distributing and its co-founder Rob Burns, agreed to dismiss the case with prejudice, with both parties paying their own attorneys’ fees and costs and waiving their rights to an appeal.
Loverboy, which was founded by reality TV personalities Kyle Cooke and Amanda Batula from Bravo TV’s Summer House, issued a press release Tuesday afternoon touting the amicable resolution of the lawsuit.
“I am thrilled that Loverboy and Night Shift were able to amicably resolve this dispute,” Cooke said in the press release. “We wish Night Shift great success and look forward to our continued expansion in Massachusetts and around the country.”
Burns offered an identical statement to one Loverboy included in its press release: “Loverboy and Night Shift have amicably resolved their disputes. The parties agreed by contract to terminate their relationship for convenience upon 30 days’ notice. Loverboy exercised that right and terminated Night Shift prior to the enactment of Section 25E1⁄2.”
Loverboy’s Massachusetts wholesalers now are Horizon Beverage, Quality Beverage and Commercial Distributing Co, according to a Loverboy spokesperson.
Night Shift Distributing began distributing Loverboy products in Massachusetts in December 2019. Less than a year later, on December 1, 2020, Loverboy informed Night Shift of its intent to terminate the relationship, effective January 3 — prior to Massachusetts Gov. Charlie Baker signing franchise law reform into law on January 12.
The new section of the law, titled 25E ½, allows suppliers making fewer than 250,000 barrels annually to terminate wholesaler relationships at any time by giving 30 days’ notice and paying “fair market value” for their brand rights. However, Loverboy and Night Shift Distributing’s October 2019 contract allowed Loverboy to terminate without cause, but did not mention compensation.
“The metaphor I use is when you get married, do you get a prenup? Or do you not get a prenup?” Burns told Brewbound in March 2021. “You can divide it up front, or you can wait ’til the marriage falls apart. But at the end of the day, there’s compensation being transacted.”
After Loverboy refused purchase orders from Night Shift on December 15 and January 11, the wholesaler filed a petition for relief to the Massachusetts Alcoholic Beverages Control Commission (ABCC) on January 13, asking the ABCC to order the FMB brand to continue selling its products to the wholesaler. Night Shift’s second petition, dated March 1, requested “full compensation” including the cost of “merchantable inventory” plus a 10% handling charge, the cost of sales and marketing material and “the fair market value of the distribution rights of the brand that are being terminated by Loverboy.”
Loverboy escalated the dispute to federal court, filing a civil lawsuit against Night Shift and Burns in the U.S. District Court of Massachusetts on May 7. In the lawsuit, Loverboy alleged Burns and Night Shift used “false, misleading, unfair and deceptive practices” to induce Loverboy into a contractual relationship.
Loverboy launched in 2018, when Cooke and Batula created the brand as a better-for-you alternative to other tea-flavored FMBs. Night Shift was the brands’ first full-service wholesaler, and grew the brand to nearly 12% of the wholesaler’s 700,000 case sales in Massachusetts.