Sean “Diddy” Combs accuses Diageo of “illegal retaliation” in the Cîroc Vodka and DeLeón Tequila case

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Diddy Diageo

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Photo credit: Diageo

Sean “Diddy” Combs accuses Diageo of “illegal retaliation” in the Cîroc Vodka and DeLeón Tequila cases and alleges in his lawsuit that Diageo has no legal basis to terminate its trademark agreements with him. Here’s the latest.

Sean Combs, in his latest court case against spirits giant Diageo, alleged that the company took “illegal and outrageous retaliation” against him for taking legal action against the company over allegations of neglect, racism and unequal distribution, production and distribution of its co-owned DeLeón Tequila brand.

Combs claimed in a brief filed in court that Diageo’s actions served as a warning to anyone trying to expose his behavior. The alleged retaliation includes Diageo’s attempts to sever ties with Combs over both DeLeón Tequila and Cîroc Vodka. The latter is a brand that has brought historical success to Combs after cultivating its image for fifteen years.

In addition, Diageo has gone so far as to prevent Combs from delivering a scheduled speech at a sales event and issued instructions to prevent Combs Wines, a co-owner of DeLeón Tequila alongside Diageo, from speaking to distributors and retailers about the brand.

“The message is clear: if you dare to shed light on Diageo’s conduct, you will be punished,” the filing reads.

According to the filing, Diageo has no legal basis to terminate its contracts with Diddy, who did everything in strict accordance with all Diageo agreements when filing his lawsuit. Combs claims that he has fulfilled all obligations under his DeLeón joint venture contract, including financing.

The filing includes a letter that Combs’ attorney, John Hueston, sent to Diageo’s attorney, demanding that the company end “its clearly retaliatory and unlawful conduct.”

“While Diageo has selfishly misrepresented the objectives of Combs’ lawsuit in the press, its attempt to retaliate against Combs for asserting his legal rights will not succeed in court,” Hueston wrote.

The filing serves as Combs’ response to Diageo’s motion to compel arbitration and dismiss his lawsuit, which he filed in May in the New York State Supreme Court. In his lawsuit, he is asking the court for an injunction to enforce a “non-discrimination agreement” in which Diageo said it would treat Combs’ DeLeón tequila the same as the company’s other two tequila brands, Casamigos and Don Julio.

Prior to this agreement, Combs had complained to Diageo about racially insensitive incidents, such as the company handing Combs a watermelon-flavored version of the tequila, despite his objections and attempts to educate Diageo about the racial connotations surrounding watermelon. Additionally, Combs alleges that Diageo classified its tequila as a “black” brand, marketable only to urban customers.

Combs’ initial complaints stemmed from the company’s neglect of the DeLeón brand, including the division of all agave — the main ingredient in tequila — among its other tequilas, irregular production that led to repeated shortages at DeLeónm, and mistakes that resulted in a shipment of the tequila being confiscated by Mexican authorities.

Diageo alleges Combs violated clauses preventing him from disparaging the company or disclosing confidential information. Combs’ attorney, Hueston, points out that New York state law gives him “absolute process privilege” to address these issues in a lawsuit.

“This privilege protects a party’s full right of access to the courts and prohibits Diageo from punishing Mr. Combs for exercising that right,” Hueston says, ironically adding that a Diageo spokesperson disparaged Combs in public statements outside of litigation.

Combs redacted over 2,500 words from his original complaint and went to great lengths to avoid disclosing confidential information. A judge later ruled that virtually all redacted content could be unsealed.

“Of the more than 2,500 words that Combs filed under seal, only 10 words were ordered to remain under seal,” noted Hueston, who also disputed Diageo’s allegation that the lawsuit was an attempt to avoid arbitration required by their dispute agreement.

Diageo also claimed that Combs breached their agreement by raising issues dating back to 2007, after the company previously agreed to drop those complaints. But Hueston reckons there’s nothing to stop Combs from raising those issues as background in the complaint if they’re directly relevant to the story of unfair treatment and racist incidents.

Timeline of events in Diddy and Diageo dispute

2007 – Diageo approaches Combs to use his well-known name and influence to boost ailing Cîroc vodka brand. Combs agrees to play a central role in all aspects of creativity, marketing, product development and innovation for Cîroc.

2009 – Ciroc’s annual sales have grown from 75,000 cases to 400,000 cases and have seen a staggering sales growth of over 3,000% since Combs began marketing. By 2014, about 2.6 million cases would be sold per year.

2013 – Combs leverages the successful collaboration with Cîroc and solidifies its partnership with Diageo by acquiring luxury tequila brand DeLeón in a 50/50 partnership.

2021 – After years of raising concerns about unequal treatment and neglect by Diageo, Combs got the company to agree to an “equal treatment” clause in its contract and to commit to treating DeLeón as it treats its other tequila brands, Casamigos and Don Julio.

May 31, 2023 – Combs is taking legal action against the spirits company, accusing Diageo of neglect, racism and unequal treatment in the distribution, production and sale of their joint tequila brand. He is seeking an injunction to force Diageo to comply with the “equality provision” agreed in 2021.

June 27, 2023 – Diageo files a motion to dismiss the case and submit it to secret arbitration while attempting to sever his ties with Combs at both DeLeón Tequila and Cîroc Vodka. Combs’ attorney, John Hueston, describes the move as a kind of “whistleblower firing”.

June 30, 2023 – A judge unseals key parts of Combs’ lawsuit against Diageo, uncovering new allegations of discriminatory behavior, including handing over a racially insensitive watermelon-flavored DeLeón to Combs, labeling Cîroc an “urban African-American brand tied to a personality”, holding back DeLeón while allocating the agave to other brands, paperwork issues leading to a shipment being seized by Mexican authorities , and inconsistent production leading to frequent bottlenecks.

July 12, 2023 – Hueston sends a letter to Diageo’s attorney, urging the company to end its retaliation and illegal actions against Combs. He insists that Combs did nothing to violate its contracts and thus gave the company no legal reason to end the business relationship.

July 18, 2023 – Combs accuses Diageo of “illegal and outrageous retaliation” by trying to terminate their agreements, interfering with its role at the brands and making derogatory statements. Combs is making these points in a motion to oppose Diageo’s attempt to compel arbitration and dismiss the case.