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 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.
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.’
13 comments:
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.
Qualified immunity for government officials!!
Oh wait.
I'll drink to that.
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.
That makes too much sense. Mr. Speakuh, the Light Gubnor and Tater aren't good at logic application.
Don Barrett and his team will clean up the aisles with this. I imagine the main problem will be collecting any moneys awarded.
That makes too much sense for the palm grease crowd.
Mississippi pols don't know what they don't know. Seriously.
Both she and hubby are Lumumba family devotees. You can be sure that Rukia is lurking in the shadows.
Apologies. Wrong thread.
This is not on Ruan. This is on the state. The DOR, the legislature and the governor. Not one competent soul.
All of the class action claims got dismissed. The case was effectively gutted.
Do what now?
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