Hot Sauce

I found this story, reported in the Ventura County Star, interesting. Huy Fong Foods, the company that makes the popular Sriracha sauce, has been embroiled in a legal battle with its erstwhile supplier of peppers, Underwood Family Farms, for some time. Underwood won:

A week after a jury awarded his farm operation $23.3 million in a lawsuit with former partner and Sriracha maker Huy Fong Foods, Craig Underwood said what winning parties often say.

The money can’t be spent yet because it hasn’t arrived. When and if it does — pending the appeal Huy Fong’s lawyers promise — the longtime Ventura County pepper farmer has plans.

“It will allow us to pay down debt, take care of obligations and hopefully get the farm back on track,” said Underwood in his business’s Camarillo office. He sat in a conference room decorated with the new pepper sauces the farm operation is selling and an exhibit from the trial showing the explosive growth of the now dissolved partnership with Huy Fong.

The Irwindale hot sauce company built by David Tran is known for its Sriracha with the rooster logo. It sued Underwood Ranches regarding the bitter end of the 28-year partnership in which Underwood grew jalapeños for Huy Fong.

Here’s the telling part:

Underwood witnesses testified Tran suddenly tried to change terms of the 28-year-marriage late in 2016 after his efforts to hire away Underwood’s chief operating officer were rejected. They said the changes made it impossible for the partnership to continue, triggering a financial earthquake for the grower.

The jury ruled unanimously for the Camarillo farm operation, finding Huy Fong violated its contract and fraudulently concealed and misrepresented information. It awarded Underwood $13.3 million to cover two years of financial losses. An additional $10 million was awarded in punitive damages.

IMO this was clearly a case that could and should have been settled out of court but in which the personalities of the litigants prevented such a settlement. The clearest winners were the attorneys.