Calif. Restaurant Owner Says Liquor Distributors Mislead License Holders

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Liquor distributors Southern Glazer’s Wine and Spirits LLC and Southern Wine & Spirits of America Inc. face a class action lawsuit alleging they mislead license holders.

California restaurant owner James Nguyen alleges in his class action lawsuit that the liquor distributors violate state and federal laws by providing account numbers and liquor-license numbers to third parties without permission. Nguyen claims that this information allowed third-parties to run up customer accounts and threatened their liquor licenses.

“To a bar/restaurant owner who wishes to sell alcohol to its patrons, obtaining and maintaining a liquor license has tremendous value,” the lawsuit states. “However, despite its knowledge of that value, the violations by Southern, as detailed in this Complaint, routinely threatened Representative Plaintiff’s and class members’ use and maintenance of their respective licenses.”

The plaintiff says he held a liquor license for his restaurant Arena Restaurant and Lounge and held an account with Southern. Nguyen alleges that Southern’s fraudulent business practices caused him to misreport his tax liability, among other things, and the company ignored complaints and threatened to cut him off.

“Southern had and continues to have a consistent policy of permitting, encouraging and/or allowing its officers, managers, agents and/or other employees to purchase alcohol on the accounts/licenses of class members, without their knowledge or consent, and/or to provide their account/license numbers to third-parties, who then purchase alcohol by assuming class members’ business identities, without class members’ knowledge or consent,” alleges the class action lawsuit. “These practices are widespread and unlawful.”

According to the class action complaint, Southern’s scheme includes permitting its employees to purchase liquor on customer accounts to meet sales quotas and then storing the liquor, but not refunding the account. The complaint says that the company also unlawfully labels full sized liquor bottles as “samples” and falsifies documents to cover up its schemes.

Further, says the plaintiff, Southern ignores complaints and “unlawfully pressur[es] retailers about the unfair and unlawful business practices detailed in this pleading,” and “threaten[s] to cut off supply to customers/retailers.”

“Not only did these schemes serve to directly increase Southern’s profits, the schemes served to secure highly-desirable and highly-profitable supply relationships,” alleges the class action. “Specifically, through its wrongdoing, Southern has successfully obtained the exclusive right to distribute particular alcohol brands, to the detriment of class members and to Southern’s competitors.”

The plaintiff seeks to represent a nationwide Class of people/entities who have had an account with Southern, as well as a California subclass. The plaintiff accuses Southern of common law fraud, breach of confidentiality, breach of contract, negligence and for various other violations of state and federal law.

The plaintiff is seeking damages, an order requiring Southern to end its unlawful business practices, and declaration that any tax problems arising from Southern’s alleged misdeeds become their problem,

Nguyen is represented by Scott Edward Cole, Kevin Francis Barrett, Teresa Denise Allen, and Corey Benjamin Bennett of Scott Cole & Associates APC and Kelley Gelini and Wesley Wakeford of Wakeford Gelini.

The Southern Liquor Distributors Class Action Lawsuit is James Nguyen v. Southern Glazer’s Wine and Spirits LLC, et al., Case No. 5:17-cv-03805-HRL, in the U.S. District Court for the Northern District of California, San Jose Division.