Ben & Jerry’s Case: Judge Skeptical About Claim Of Irreparable Harm

Ben & Jerry’s Case: Judge Skeptical About Claim Of Irreparable Harm

As we previously reported, Ben & Jerry’s “brand integrity” board sued Unilever to stop it from selling the ice cream maker’s business in Israel to its long-term Israeli licensee/manufacturer/distributor, Avi Zinger and his company, American Quality Products Limited (AQP). At least, that’s the official version.

The whole dispute was sparked by Ben & Jerry’s decision to refuse to sell ice cream in the territories of Judea and Samaria (a/k/a the “West Bank”). Zinger refused, as required by Israeli law. Ben & Jerry’s then notified Zinger it wouldn’t renew his license (a license he has held for some thirty years). So Zinger sued Ben & Jerry’s and Unilever, of which Ben & Jerry’s is a wholly-owned subsidiary.

Ben and Jerry’s filed suit in a different court in a different state from the one in which Zinger had sued Unilever. The sale to Zinger (or rather, to his new company, Blue & White) was arranged to settle Zinger’s claim, and it has already been consummated. The parties spent a couple of weeks trying to negotiate a resolution. That failed, and the federal court (Southern District of New York) held an August 8 telephonic hearing on Ben & Jerry’s motion for a preliminary injunction.

If the sale has already gone through, why does Ben & Jerry’s need an injunction? That question was the subject of the hearing.

We’ve 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
• Ben & Jerry’s Sues Corporate Parent Unilever To Thwart Sale Of Branded Ice Cream In Jewish Quarter of Old City, Judea and Samaria

A hearing was held on August 8 on Ben & Jerry’s request for an injunction. The judge, the Honorable Andrew L. Carter, Jr., focused mainly on the issue of whether plaintiff would suffer irreparable harm if the injunction weren’t granted.

Counsel for plaintiff Ben & Jerry’s (Joseph Ahmad and Shahmeer Halepota) basically argued that the ice cream company wanted to protect its social mission image, lest potential new products potentially be altered by Zinger’s Blue & White company. Under Zinger’s deal with Unilever – which was referred to during the hearing as an irrevocable license rather than a sale – Unilever is supposed to pass along to him the formulae for new Ben & Jerry’s products. The Ben & Jerry’s lawyer offered a theoretical “what-if” illustration. What if the ice cream company developed a pro-Palestinian flavor, and what if Zinger tried to market it as an anti-Palestinian flavor instead?

Counsel for defendants (David Marriott and Yonatan Even) responded that the supposed harm was speculative and not irreparable. Furthermore, the perceptions of third parties to a potential Zinger change to a potential new Ben & Jerry’s ice cream product doesn’t qualify as irreparable harm.

Judge Carter remarked, “That doesn’t seem like an imminent danger.” That was an understatement. Speculative harm of the type about which plaintiff claims to be exercised may not even qualify as an actual case or controversy of the type needed to bring suit in federal court.

Ben & Jerry’s also argued that it wanted to protect its English language trademark. Under the deal with Unilever, Zinger may only market his products using Ben & Jerry’s name spelled in Hebrew and Arabic, not in English. Plaintiff counsel claimed that Zinger’s website currently lists products in English. Counsel didn’t say (at least, not clearly) that the website uses Ben & Jerry’s English-language trademark, just that the products were listed in the English language. Therefore, counsel claimed, plaintiff suspected a deal allowing Zinger to use the English trademark was “imminent”.

The judge wanted to know what trademarks Zinger had used in the past. The issue appears to have been newly-raised at the hearing, and defense counsel didn’t know the answer; their response wasn’t much more enlightening than plaintiff’s argument.

What Unilever’s counsel did have at their fingertips were two arguments why the judge shouldn’t even get to the question of irreparable injury. First, defense counsel argued that plaintiff had failed to sue other necessary and indispensable parties. Ben & Jerry’s claims it’s trying to stop parties not before court – namely, Zinger and his companies – from using its English trademark or potentially altering a potential product. If that’s so, it should have sued them too.

Even more importantly, defendant argued that Ben & Jerry’s “social mission” board had no power to sue the actual owner of Ben & Jerry’s, which is Unilever (a/k/a Conopco). I wouldn’t hold my breath waiting for dismissal on the second argument.

Unilever’s schtick is to encourage its subsidiaries to have social missions. Evidently, the company thinks that generates good publicity, or at least good feelings and brand loyalty from its customers. Unilever wants to make good while it’s doing good, or at least give the appearance of doing so. Ben & Jerry’s adoption of BDS, the resulting bad publicity to Unilever, and the subsidiary’s suit of its parent corporation may cause Unilever to rethink its strategy.

In today’s business climate, where many woke employees think they can dictate their employers’ policies, the idea that a subsidiary would object to its parent corporation’s unwoke decisions isn’t so surprising. Perhaps, as Netflix did with its employees, Unilever will remind its subsidiaries who’s the adult in the room.

The Judge took the injunction request under consideration, for later decision.

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