Wednesday, October 14, 2026

Wine Wars: Ruan Must Face the Music in Court

The company that blew up the liquor industry in Mississippi earlier this year might be facing the music in federal court.  U.S. District Judge James Maxwell dismissed Ruan Transport Inc.'s motion to dismiss after a Mexican restaurant sued to recover lost revenue and profits. 

Ruan Transport shut the ABC warehouse down for a week in early January to take inventory. With the warehouse closed, Ruan replaced the software and conveyor belt systems. The software was not tested and did not communicate with ABC's MARS software. Ruan replaced the conveyor system with a picket and pallet system. 

The result was a total meltdown as shipping times skyrocketed from 48 hours to nearly a month as Ruan shipped less than 50% of cases ordered for a month, crippling casinos, restaurants, and package store owners alike. The backlog at the ABC warehouse soared to over 200,000 cases as Ruan struggled to ship product.   

Uno Mas sued Ruan in the U.S. District Court of the Northern District of Mississippi in May.  The complaint  charges Ruan with of breach of contract, negligence, gross negligence, and unjust enrichment.  The plaintiff argues it has standing to sue for breach of contract because it is a member of a specifically identified class, ABC permitees.  Ruan thus owed a duty to the permitees to operate the warehouse in a competent manner, which it failed to do.  

The complaint asked the Court to certify it as a class action lawsuit  The plaintiff seeks damages for all lost revenue suffered due to the inability to sell products not delivered as well as lost profits.  Punitive damages and attorney's fees are sought as well. 

Ruan said too bad as it filed a motion to dismiss, claiming it has no legal duty to provide the plaintiffs with alcohol as Ruan's duty is to ABC, not ABC customers.  

The defendant argued package stores are required to purchase their wine and liquor from ABC.  Ruan simply manages the warehouse and ships through other companies to ABC customers.  The company points out it has no contract nor business dealings with "liquor retailers", thus no business relationship exists. 

The plaintiff did not sue ABC or the Department of Revenue. 

The charge of unjust enrichment, contends Ruan, must fail as well because the plaintiffs did not pay anything to Ruan.  

Not so fast, my friend, said U.S. District Judge James Maxwell as he denied part of the motion to dismiss.  Judge Maxwell said the "key question" was whether the ABC permitees could sue Ruan Transport for not "timely delivering" their orders. 

The Court held the permitees are indeed a specified class that "directly benefit" from Ruan's contract with ABC.  


These broad terms still have not stopped Ruan from painting Uno Mas as a “mere incidental beneficiary” with no enforcement rights. Rein v. Benchmark Constr. Co., 865 So. 2d 1134, 1146 (Miss. 2004). As Ruan sees it, its contract was with a public entity—the MDOR. So any public benefit from efficient warehouse operations Mississippi restaurants and liquor store owners received does not confer a right of action.....

But Uno Mas is not bringing a class-action complaint on behalf of the alcohol-drinking public—who no doubt also felt effects from ABC’s warehouse backlog. Rather, Uno Mas is suing as an ABC permittee on its behalf and on behalf of other ABC permittees.

 

 
Since the contract gauranteed timely delivery, opined the Court, the permitees fell within the contract's "benefits." Indeed, the contract appears to obligate Ruan to “guarantee next workday delivery” of qualified wholesale alcohol orders “to permittees” like Uno Mas. Because Uno Mas’s breach-of-contract claim springs from the contract’s terms, its third-party beneficiary claim may proceed. So can its equitable unjust-enrichment claim, which Uno Mas alleges in the alternative to its breach-of-contract claim.

That said, this Court agrees with Ruan there is no legal support for Uno Mas’s claim that Ruan owed it and other ABC permittees a common-law duty to operate the warehouse in a professional and reliable manner. Therefore, Uno Mas’s negligence-based claims fail as a matter of law.

Oh boy.  Judge Maxwell decreed the contract is broad enough to include the permitees since they stand to benefit directly from the contract.  The contract made multiple references to "ABC permitees."  The Court elaborated: 

While the Court upheld the complaint for unjust enrichment and breach of contract, it dismissed the claims for negligence and gross negligence.  Ruan's duty to operate the warehouse competently is a contractual obligation, thus there is no duty of care.

Oh yes, we almost forgot about the unjust enrichment claim. The complaint wants Ruan to pay the per case fee ABC paid to Ruan for services it failed to perform.  Ruan argues unjust enrichment only applies if there is a mistaken payment.  However, the Court held one can be found guilty of unjust enrichment under other conditions. 

Further, the Mississippi Supreme Court has cautioned that a mistaken-payment claim “is not to be confused with unjust enrichment in contract cases, which applies to situations ‘where there is no legal contract but where the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain.’

Uno Mas and Oak Cask, Inc. of Hernando promptly filed an amended complaint last week after the Court consolidated their cases.  

Attorney Don Barrett and a swashbuckling crew of lawyers from his law firm represent the plaintiffs.  Michael Casano represents Oak Cask.   

 

13 comments:

Krusatyr said...

Why can't State Legislators see the folly of running the State Luquor business and simply make their percentage off the point of sale? This would lower costs of wine and liquor and increase the State take at the same time.

Anonymous said...

Qualified immunity for government officials!!

Oh wait.

Anonymous said...

I'll drink to that.

Krusatyr said...

Austin TX has beautiful, hugely stocked private warehouse liquor stores with brands from all over. Same brands cost 15% to 20% less than MS liquor stores, yet each bottle is taxed for Texas. MS does it worse.

Anonymous said...

That makes too much sense. Mr. Speakuh, the Light Gubnor and Tater aren't good at logic application.

Anonymous said...

Don Barrett and his team will clean up the aisles with this. I imagine the main problem will be collecting any moneys awarded.

Anonymous said...

That makes too much sense for the palm grease crowd.

Anonymous said...

Mississippi pols don't know what they don't know. Seriously.

Anonymous said...

Both she and hubby are Lumumba family devotees. You can be sure that Rukia is lurking in the shadows.

Anonymous said...

Apologies. Wrong thread.

Anonymous said...

This is not on Ruan. This is on the state. The DOR, the legislature and the governor. Not one competent soul.

Macy Hanson said...

All of the class action claims got dismissed. The case was effectively gutted.

Anonymous said...

Do what now?


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