Maryland Appellate Court Rules Against Pabst Again in Attempted Successor Supplier Distributor Termination

The Maryland Court of Special Appeals has ruled again for a beer distributor who was wrongly terminated by Pabst Brewing as a result of Pabst Brewing reorganizations.

The Maryland court found that the Maryland Beer Franchise law was clear and that that the corporate restructuring of Pabst Brewing did not qualify it to be a “successor supplier” within the Maryland Beer Franchise Act and that the law did not allow Pabst to terminate Winner Distributing without cause.   The court closely examined the text of the statute, similar litigation in Ohio, and the admissions of Pabst that this sale was a sale of stock, not of assets to conclude that Pabst was not under the Maryland definition of “successor supplier” in this situation.

The court’s opinion only dealt with this threshold issue of statutory interpretation and now the case heads back to trial court for a determination of valuation and other remedies sought by the parties.

There was litigation about these same issues with Pabst and distributors in Ohio and it was covered by this website back in 2011. For a trip down memory lane it can be found below:

(previous post 2011) Ohio Court Rules Against Attempt by Pabst to Terminate Ohio Distributors

An Ohio judge ruled for distributors and against Pabst in its effort to terminate distributors.   Pabst Brewing Co. stock was sold to Pabst Holding Co and Pabst Holding claimed to be a successor manufacturer.  They terminated existing distributors under OH Franchise Act and the distributors brought this matter to court.   The court stated that interpretation of Franchise Act unnecessary because the legal issue turns on the provisions of the distributor agreements.  The distributor agreements in question require sixty day notice before termination.  Pabst did not provide notice within sixty days.  As such the court held that  Pabst breached the distributor agreements by failing to give sixty day notice prior to termination.  Pabst’s attempted termination was ineffective and the distributor agreements continue to bind Pabst.

This judge also has other supplier termination cases before him.    His opinion in the Pabst case can be found here.

Thanks to Dave Raber for the heads up.