On Wednesday, Brinker International, Inc. and Brinker International Payroll Company, L.P. filed a complaint in Texas state court against US Foods, Inc. and Services Group of America, Inc. alleging breach of contract and conversion.
According to the complaint, Brinker International, Inc. is a Delaware corporation with a principal place of business in Dallas, Texas and is one of the world’s leading casual dining restaurant companies, with more than 1,600 full-service restaurants in 29 countries including Chili’s and Maggiano’s Little Italy. The complaint further states Brinker International Payroll Company, L.P. is a Delaware limited partnership and subsidiary of Brinker International.
The complaint purports that US Foods and Services Group of America are both Delaware corporations that distribute food and other supplies for various businesses including Brinker International.
The complaint claims that for the past decade, Service Group of America has been a distributor for Brinker pursuant to a distribution agreement dated February 1, 2011 and a distributions agreement dated February 1, 2016. Further, the complaint states that on September 13, 2019, US Foods acquired Service Group of America and on January 6, 2020, it took assignment of Service Group of America’s distribution contracts with Brinker and became a counterparty to the agreements.
The plaintiffs allege that US Foods and Service Group of America have misappropriated legal claims that are rightfully Brinker’s in violation of their distribution agreements. Specifically, the complaint states the defendants are currently litigating claims in the case of In re Broiler Chicken Antitrust Litigation that are rightfully Brinker’s in an attempt to generate an undeserved windfall for themselves.
The complaint states that the basic allegation in In re Broiler Chicken Antitrust Litigation is that suppliers of broiler chicken conspired to raise the price of chicken by agreeing to restrict supply, manipulate price indices and fix bids among other conduct. Further, the plaintiffs claim that they had purchased significantly more than $1 billion worth of broiler chicken from the defendants in In re Broiler Chicken Antitrust Litigation, and even a small overcharge caused by the alleged conspiracy would result in significant damage to Brinker when applied to its volume of purchases.
The plaintiffs argue that the distribution agreements with the defendants specifically require the distributors to assign any claims to Brinker upon request and prohibits the defendants from accepting any form of compensation from suppliers that is not expressly disclosed to and approved by the restaurant. Additionally, the plaintiffs allege that the defendants have never been granted the defendants’ authority to negotiate the price of broiler chicken or form an agreement with broiler chicken suppliers.
In the present case, the plaintiffs allege breach of contract, conversion, unjust enrichment and tortious interference with contract against the defendants and seek declaratory relief, assignment of the claims, damages, pre- and post-judgment interest, attorney’s fees and costs. The plaintiffs are represented by Hunton Andrews Jurth LLP.
