Issue link: https://www.e-digitaleditions.com/i/695589
16 SMOKESHOP June 2016 Industry NEWS Trendsettah USA Wins $44.4 mil. Antitrust Judgement Against Swisher Small Cigar Company Argued Unfair Business Practices over Manufacturing Contract With Global Leader jacksonville, fla.—In a jury verdict announced by its lawyers in early April, Trendsettah USA, Inc. won $14.8 million in damages against Swisher International, the world's largest cigar maker. Pursuant to federal law, the judgement was automatically trebled to $44.4 million. Miami-based Trendsettah entered into a manufacturing contract with Swisher International in January 2011, whereby Swisher would manufacture cigarillos for Trendsettah at its Jacksonville factory. Trendsettah sold the product under its own Splitarillos brand name. In the lawsuit, Trendsettah alleged that the explosive growth of the Splitarillos brand over its first year-and-a- half in business began to eat away at the market share of Swisher's own Swisher Sweets brand. At that point, Trendsettah alleged, Swisher began to purposefully refuse to fulfill Trendsettah's orders, slowly starving it out of busi- ness. At the same time, Swisher encouraged its sales reps to disparage Splitarillos in the marketplace, intentionally mis- filled Trendsettah's orders for Splitarillos, and then imposed an arbitrarily low cap on the total number of Splitarillos it would manufacture each month, the lawsuit alleged. Trendsettah has since moved production of Splitarillos to a different manufacturer in the Dominican Republic. Following two weeks of trial, the jury deliberated for less than three hours before unanimously finding Swisher liable to Trendsettah for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Sherman Act, a federal antitrust law that prohibits large companies with "market power" from engaging in "anti- competitive conduct" directed at their smaller rivals. "Although the pertinent section of the Sherman Act uses the term 'monopoly,' it is not limited to monopolies in the traditional sense," said Mark Poe, a partner at Gaw Poe LLP, the San Francisco-based firm that represented Trendsettah. "A defendant need not be the only game in town in order for it to be found to have 'monopoly power,'" Poe explained. "Section 2 is really targeted at preventing any extremely dominant participant in a marketplace from freezing out potential rivals." Trendsettah USA, Inc. was founded in Los Angeles in 2011 with the launch of Splitarillos and now markets vaporiz- ers, e-liquids, pharmaceuticals, and specialty brands. BerettaTube•1-2V•Aug15.indd 1 9/18/15 12:00 PM