Ben & Jerry’s Sues Corporate Parent Unilever To Thwart Sale Of Branded Ice Cream In Jewish Quarter of Old City, Judea and Samaria
Asks judge to prevent settlement agreed to in separate case, in which Unilever agreed to sell Ben & Jerry’s business in Israel to an Israeli manufacturer-distributor, enabling sale of Ben & Jerry’s brand ice cream in the Jewish Quarter of the Old City of Jerusalem, Judea and Samaria (the West Bank).
Last week, we reported that Ben & Jerry’s owner Unilever had agreed to a new arrangement under which Ben & Jerry’s ice-cream will continue to be sold throughout Israel, including in the Jewish Quarter of Jerusalem’s Old City, and in Judea and Samaria (a/k/a the West Bank). The deal was meant to settle a lawsuit filed by the ice cream company’s Israeli distributor, after Ben & Jerry’s refused to sell its ice cream in the West Bank and the distributor (in keeping with Israeli law) refused to discriminate between Israel and the West Bank. Under the agreement, Unilever agreed to sell Ben & Jerry’s business in Israel (and the West Bank) to the Israeli manufacturer-distributer.
While there is debate about who won, Ben and Jerry’s have no doubt: they lost. That’s why they’ve sued Unilever to stop the deal.
We previously covered the controversy here:
- Ben & Jerry’s To Boycott “Occupied Palestinian Territory” Including Ancient Jewish Quarter of Jerusalem
- Ben & Jerry’s Co-Founders Defend Boycotting Israel, But Won’t Boycott Texas and Georgia
- Illinois Divests Pension Funds From Unilever Over Ben & Jerry’s Israel Boycott
- Breaking Up Is Hard to Do: Israeli Company Sues Ben & Jerry’s and Unilever To Maintain License
- Anti-Israel Boycott Defeat – Ben & Jerry’s Ice Cream Will Continue Being Sold Throughout Israel
Some on the left tried to spin the deal as the beginning of the end for Israel.
Leftist company Ben & Jerry’s was not among them. On July 5, the company filed a federal lawsuit in Manhattan seeking to prevent Unilever from consummating the deal. Ben & Jerry’s claims Unilever breached its contracts with the ice cream company, both the merger agreement by which Ben & Jerry’s became a subsidiary of Unilever, and the shareholders agreement between Unilever and Ben & Jerry’s.
The gist of Ben & Jerry’s complaint is that, even though Unilever bought them out, the ice cream company maintained an independent board of directors for the purpose of safeguarding Ben & Jerry’s brand-name image. The independent board was concerned with such matters as the company’s integrity, reputation, and goodwill. Unilever, they say, did not consult Ben & Jerry’s board before agreeing to settle the suit. In Ben & Jerry’s view, that failure constitutes a breach of contract that will irreparably harm its “brand integrity.”
2. From its stances on migrant justice and LGBTQ+ rights to Black Lives Matter and climate change, the Ben & Jerry’s brand is synonymous with social activism. The Company’s core values of advancing human rights and dignity, supporting social and economic justice for historically marginalized communities, and protecting and restoring the Earth’s natural systems are integral to Ben and Jerry’s identity. So much so that when the Company entered into an Agreement and Plan of Merger with Unilever in 2000 (“Merger Agreement”), Ben & Jerry’s expressly reserved the “primary responsibility for safeguarding the integrity of the essential elements of the Ben & Jerry’s brand-name” with an Independent Board of Directors. These terms were subsequently memorialized in a Shareholders Agreement between Ben & Jerry’s and Unilever.
3. Pursuant to the terms of the Merger Agreement and Shareholders Agreement, Unilever agreed to a unique corporate governance structure that preserved the independence and autonomy of Ben & Jerry’s Board of Directors. Specifically, an Independent Board of Directors was created and expressly authorized to protect against actions that, in its discretion, pose a risk to the integrity of the essential elements of the Ben & Jerry’s brand name…
4. In May 2021, the Independent Board of Directors determined that it would be inconsistent with the essential elements of Ben & Jerry’s brand integrity for Ben & Jerry’s to be sold in the West Bank. In response, Unilever issued a public statement declaring that it had “always recognised the right of the brand and its independent Board to take decisions about its social missions.” And, in April 2022, Unilever reiterated that Ben & Jerry’s “would clearly be harmed if forced to provide a license . . . against its will.”
5. On June 29, 2022, Unilever abruptly reversed course, announcing that Ben & Jerry’s “will be sold” in the West Bank through a third-party distributor. See Exhibit E. Unilever’s unilateral decision was made without the consent of Ben & Jerry’s Independent Board of Directors, the entity contractually empowered with protecting Ben & Jerry’s brand. An injunction restraining Unilever from violating the express terms of the Merger Agreement and Shareholders Agreement is essential to preserve the status quo and protect the brand and social integrity Ben & Jerry’s has spent decades building (footnotes omitted).
Ben & Jerry’s claim “irreparable harm” because the company has jumped onto the BDS bandwagon, concluding that Israel is somehow odious because it tries hard to protect itself from Palestinian terrorism. BDS and Ben & Jerry’s lay the blame for the failure of the Israeli-Palestinian “peace process” solely at Israel’s feet. The Palestinians’ complete failure to offer terms for a peace deal that would completely resolve the issues between the parties, and leave each to live in peace within its own secure and recognized borders; their failure to educate their children for peace; the Palestinian Authority’s fomenting violence by offering bounties to terrorists who attack Israelis; not to mention Hamas’ ongoing rocket attacks on civilians, and absolute rejection of the idea of making peace with Israel – all are Israel’s fault, and the Palestinians are completely innocent victims.
“As early as 2013,” the new complaint says, “the Ben & Jerry’s Independent Board of Directors had begun receiving complaints regarding the human rights implications of selling its products in the West Bank.”In its motion for a temporary restraining order, the company claims its “Independent Board determined that it would be inconsistent with the essential elements of Ben & Jerry’s brand integrity to continue selling its products in the West Bank.” Furthermore, “Once Unilever completes the sale to AQP, Ben & Jerry’s will have lost control over its brand in Israel and the West Bank. That harm cannot be repaired.” Since Ben & Jerry’s had committed to refusing to sell in the West Bank, and wouldn’t sell in Israel if it couldn’t also refuse to sell in the West Bank, the loss of control means Ben & Jerry’s will continue to be sold in the West Bank and Israel. The court rejected the application for an immediate restraining order. Instead, it scheduled a hearing for July 14. The court order doesn’t explain why, but presumably the court will determine whether there are grounds to issue a preliminary injunction to block the sale. The difference between a temporary restraining order (called a “TRO” in legal lingo) and a preliminary injunction – besides being able to get the former faster – is that a party seeking the former typically doesn’t bother to give the other side notice of the action or time to respond. For the latter, it does. The Wall Street Journal reports that the sale has already closed. If so, Ben & Jerry’s can only seek damages but won’t be able to prevent the sale. The above-referenced documents, and declarations supporting Ben and Jerry’s motion for a TRO, may be found at:
- Ben and Jerry’s v. Conopco – Verified Complaint With Exhibit
- Ben and Jerry’s v. Conopco – Memorandum of Law in Support of Motion for a Temporary Restraining Order
- Ben and Jerry’s v. Conopco – Declaration of Ben Cohen With Exhibits
- Ben and Jerry’s v. Conopco – Declaration of Jerry Greenfield
- Ben and Jerry’s v. Conopco – Declaration of Jennifer Henderson
- Ben and Jerry’s v. Conopco – Declaration of Andrew Ross With Exhibits
- Ben and Jerry’s v. Conopco – Declaration of Drew Dean With Exhibits
- Ben and Jerry’s v. Conopco – Order to Show Cause
What will Unilever say in its response? Here are a couple of thoughts:
- We have the right to control business operations, including the right to settle lawsuits. Ben & Jerry’s interpretation of the agreement under which it bought Ben & Jerry’s would let the tail wag the dog instead of the reverse.
- If Ben & Jerry’s was trying to scotch the settlement in the Zinger lawsuit, why did it file a whole new case? If Ben & Jerry’s opposed the Zinger settlement, it should have filed its objections in that case, and in that district (New Jersey). It’s a party to the lawsuit Zinger brought, after all. Technically, the Zinger case was dismissed on Friday, July 1, after the parties notified the court that the suit had been settled. But, Ben & Jerry’s claim implicates Zinger’s rights, and if the ice cream company gets its injunction and prevents the settlement from being consummated, the New Jersey case will certainly have to be reopened. On the other hand, if (as the Wall Street Journal reports) the sale of the Israeli business to Zinger has already been consummated, an injunction now is pointless. In that case, Unilever may simply argue that Ben & Jerry’s sat on its rights in the Zinger case and is foreclosed (estopped) from challenging the resolution in another case.
Is it possible Ben & Jerry’s doesn’t/didn’t really want to mess up the settlement, but just to burnish its credentials with its leftist fanbase; and collect money/recover complete independence from Unilever at the same time?DONATE
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