Court pauses Diddy’s discrimination suit while Diageo appeals arbitration ruling

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Update:

• The New York Supreme Court’s Appellate Division ruled a lawsuit from Diddy’s Combs Wines and Spirits LLC against Diageo North America be put on hold while an appeal from a lower court ruling is heard.
• Diageo is appealing whether the dispute over marketing Combs’ beverages should go to arbitration.
• The appeal is set to be heard during the court’s April 2024 term.

Diddy lawsuit overview: 

• Who: Combs Wines and Spirits LLC, owned by Sean “Diddy” Combs, filed a lawsuit against Diageo North America LLC.
• Why: Combs claims Diageo marketed his spirits as lesser than other spirits and aimed marketing at only “urban” customers.
• Where: The case was filed with the Supreme Court of New York.
• What are my options: Try Drizly for a variety of spirits.

(June 2, 2023)

Combs Wines and Spirits LLC filed a lawsuit against Diageo North America LLC claiming Diageo marketed Combs’ spirits as lesser than other spirits while targeting the brands to only “urban” customers.

Combs, owned by Sean “Diddy” Combs, has deals with Diageo for its Ciroc Vodka and DeLeon Tequila, which Combs claims Diageo markets as “Black brands.”

“Based on Diageo’s false promises about investing in diverse-owned and diverse-backed brands Mr. Combs has put the full force of his marketing, business, and personal resources into his Diageo partnership,” the lawsuit claims. “But because he knows that contracts matter more than press releases, Mr. Combs insisted that Diageo agree to certain terms to ensure his brands were not ignored or relegated to second-class status but instead treated equally.”

Diageo executive admitted to altered marketing, limited reach based on race, Diddy lawsuit claims

Stephen Rust, Diageo’s president of reserve and new business, admitted the racist tactics to Combs in 2019, stating some in Diageo leadership resented how much Combs was making on the deal, saying that if he was Martha Stewart, things would be different and the neighborhoods where the spirits were sold would not be limited, according to the Diageo lawsuit.

DeLeón has been treated differently than Diageo tequila brands such as Casamigos and Don Julio, not receiving similar opportunities to grow, according to the Diageo lawsuit. Diageo invested in competing brands instead of Diddy’s brands and therefore the only way his spirits will receive equal treatment is through a court order, the lawsuit claims.

Diageo, however, says the lawsuit is a business dispute and that it is saddened Diddy recast the matter as something else. 

“Our steadfast commitment to diversity within our company and the communities we serve is something we take very seriously,” a Diageo spokesperson says. “We categorically deny the allegations that have been made and will vigorously defend ourselves in the appropriate forum. 

“For more than 15 years, we’ve had a productive and mutually beneficial relationship with Mr. Combs on various business ventures, making significant investments that have resulted in financial success for all involved. We are disappointed our efforts to resolve this business dispute amicably have been ignored and that Mr. Combs has chosen to damage a productive and valued partnership. While we respect Mr. Combs as an artist and entrepreneur, his allegations lack merit, and we are confident the facts will show that he has been treated fairly.”  

In related news, Diageo North America faces a class action lawsuit claiming its Lone River Ranch Water is misleadingly labeled because it does not contain tequila.

Have you tried Diddy’s spirits? Let us know in the comments.

The plaintiff is represented by John C. Hueston, Moez M. Kaba and Mariah N. Rivera of Hueston Hennigan LLP.

The Diddy spirits lawsuit is Combs Wines and Spirits LLC v. Diageo North America Inc., case number unknown, filed with the Supreme Court of the state of New York in the county of New York.

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