Jägermeister Importer Dodges $11.75 Million Court Fine Thanks to Improper Jury Instruction

(Photo: Peter Steffen/picture-alliance/dpa/AP Images)

Last week, a Missouri court overturned an $11.75 million ruling that would have compelled spirits giant Jägermeister to pay out a former liquor distributor. The reversal comes on the heels of claims that the jury was misinstructed on laws relevant to the case.

The origins of the dispute date back to 2017. Mast-Jägermeister US, distributor of the popular German-made herbal liqueur Jägermeister, had worked alongside Major Brands, Inc. to distribute its products in Missouri for over 40 years. The two parties had worked together since the 1970s without a written contract. The lucrative partnership came to an end when Southern Glazer’s Wine and Spirits — the largest liquor distributor in America — approached Jägermeister with a consolidated nationwide proposal.

By January 2018, Jägermeister and Southern Glazer’s entered into an exclusive five-year agreement extending to all 50 states.

Major Brands immediately filed suit against both Jägermeister and Southern Glazer’s in Missouri state court. In its filing, the distributor claimed that the companies violated franchise law, engaged in “civil conspiracy” and benefitted from “unjust enrichment” at the expense of a long-standing business partnership. Following a six-day jury trial, Jägermeister was ordered to pay out nearly $12 million in damages.

In a Friday decision, a three-judge panel told a different story. According to Judge James B. Loken, the jury had been misinformed about the community interest laws central to the case.

The jury was reportedly asked to consider whether Major Brands’ investment in Jägermeister was “substantially specific to the brand”; the question, according to state law, should have been whether the distributor “made substantial investments not recoverable upon termination.” Since Jägermeister never made up more the 1.16% of the distributor’s annual sales, the panel felt that the latter question was yet unanswered.

“By instructing the jury to consider only whether Major Brands’s investments ‘were substantially specific to the brand(s),’ the instruction failed to require consideration of the distributor’s degree of economic dependence on this particular supplier relationship and whether, if the supplier ended the relationship, the distributor would suffer ‘severe economic consequences,’” Loken wrote.

The U.S. Court of Appeals for the Eighth Circuit overturned the $11.75 million ruling and remanded the case for a new trial.

In addition to its namesake herbal liqueur, Mast-Jägermeister US is the exclusive distributor of Dwayne “The Rock” Johnson’s Teremana Tequila. Johnson’s venture has proven wildly successful since its launch in 2020, recently surpassing one million nine-liter-case sales annually. The brand’s total value is estimated at around $3.5 billion.