Judge blocks Coors distributor from losing Corona deal

Judge Adam Espinosa issued a temporary order on Wednesday evening that stops Constellation Brands from canceling its distribution agreement with Coors Distributing Company. The ruling prevents the Chicago based maker of Corona and Modelo from terminating the contract until an arbitrator decides if the company had the right to end the deal without cause. Constellation attempted to cancel the agreement in September.

The judge’s decision comes after Coors Distributing Company, known as CDC, warned that losing the contract would cost the business more than $100 million. Espinosa noted that Constellation products make up a large part of CDC’s business. He wrote that CDC faces a real risk of reputational harm and the loss of other distribution agreements if the deal is cut short. The order was issued at 9:30 p.m. on Wednesday.

CDC filed emergency lawsuits against Constellation and another alcohol manufacturer, Mark Anthony Brands, last month. Mark Anthony Brands produces White Claw and Mike’s Hard Lemonade. CDC, a subsidiary of Molson Coors with 450 employees, argued that the breweries cannot end their long standing Denver distribution deals so quickly without a valid reason. Both Constellation and Mark Anthony Brands dispute this claim.

Michael Nuss, the president of CDC, stated in an affidavit dated Sept. 25 that the termination notice came as a complete surprise to him and the entire business. Nuss added that CDC has served as Constellation’s distributor for 30 years and helped double the brand’s market share in the area. He estimated in the document that CDC’s distribution rights for Constellation’s brands are worth well over nine figures, though specific dollar amounts were redacted from the public filing.

A spokesperson for CDC declined to comment on the new order. Spokespeople for Constellation Brands did not respond to requests for comment. The company is publicly traded and based in Chicago.

CDC’s lawsuit against Mark Anthony Brands is set for a hearing on Tuesday. Judge Chris Baumann will then decide whether to issue an injunction similar to the one Espinosa granted for the Constellation case. CDC is represented by lawyers Dan Taylor, Andrew Baak, Joe Doman and Daniel Cummins from the firm Bartlit Beck. Constellation’s legal team includes Randall Miller, Reeves Anderson and Shay Longtain from Arnold & Porter.