LOS ANGELES (CBSLA.com) — Two Southland vendors have filed a lawsuit against Trader Joe’s accusing the specialty grocery store chain of manipulative business practices, breaking contracts and intentionally interfering with vendor relationships.
The lawsuit alleges the Monrovia-based Trader Joe’s coerced product suppliers and manufacturers in order to get those companies to cancel contracts with Natural Dairy Products (NDP) and Dairy Smart Inc. of Yorba Linda, which sell ice cream and other dairy products.
The grievances listed in the complaint includes intentional interference with contractual relations, unjust enrichment, breach of contract, and acting in bad faith.
According to the complaint, NDP helped Trader Joe’s obtain better products from the ice cream manufacturers, while Dairy Smart acted as a broker for Trader Joe’s for dairy products including yogurt, cottage cheese, sour cream, and butter.
After a business relationship with NDP lasting over 30 years, attorney Ricardo Echeverria said Trader Joe’s wrongfully interfered with the contractual and prospective economic relationship between Dairy Smart, NDP and their vendors. Around March 2013, those vendor companies then cut ties with both of NDP and Dairy Smart, according to Echeverria.
“Our clients helped build Trader Joe’s ice cream products which generated tremendous revenues for the grocer,” said Echeverria. “Once TJ’s decided it would be more profitable doing business without Natural Dairy Products and Dairy Smart they purposefully railroaded their business relationships.”
As a result of Trader Joe’s actions, both companies suffered severe financial losses, the lawsuit alleges.
There was no immediate comment from Trader Joe’s regarding the lawsuit.
The lawsuit marks the second legal challenge Trader Joe’s has faced this year following a lawsuit filed by customers who claimed to have contracted E. coli infections from packaged salads.