Sean ‘Diddy’ Combs accuses Diageo of ‘illegal retaliation’ in the Cîroc Vodka & DeLeón Tequila case, alleging in his court filing that Diageo has no legal basis to end its brand deals with him. Here’s the latest.
Sean Combs alleged in his latest court filing against spirits giant Diageo that the company engaged in “illegal and outrageous retaliation” against him due to his legal action against the conglomerate over allegations of neglect, racism, and unequal distribution, production, and sales of his co-owned DeLeón Tequila brand.
Combs asserted in a brief filed in court that Diageo’s actions serve as a warning to anyone who attempts to expose its conduct. The alleged retaliation includes Diageo’s attempts to sever its relationship with Combs over both DeLeón Tequila and Cîroc Vodka. The latter is a brand that Combs has brought historic success, having cultivated its image for fifteen years.
Further, Diageo has gone so far as to block Combs from delivering a planned speech at a distributor event and issuing directives to stop Combs Wines, co-owner of DeLeón Tequila alongside Diageo, from speaking with distributors and retailers about the brand.
“The message is clear — if you dare to shed light on Diageo’s conduct, you will be punished,” the filing states.
According to the filing, Diageo has no legal basis to end its contracts with Diddy, who has done everything in filing his lawsuit in strict accordance with all Diageo agreements. Combs asserts that he has satisfied all obligations under his DeLeón joint venture agreement, including funding.
The filing includes a letter Combs’ attorney, John Hueston, sent to Diageo’s attorney, demanding that the company end “its plainly retaliatory and unlawful conduct.”
“While Diageo has self-servingly misrepresented the goals of Combs’ lawsuit in the press, its attempt to retaliate against Combs for asserting his legal rights will not work in court,” wrote Hueston.
The filing serves as Combs’ response to Diageo’s motion to compel arbitration and dismiss his lawsuit, which he filed in May in New York State Supreme Court. In his filing, he asks the court for injunctive relief to enforce an “equal treatment” agreement, in which Diageo stated it would treat Combs’ DeLeón Tequila as it treats the other two tequila brands the company owns, Casamigos and Don Julio.
Before that agreement, Combs had complained to Diageo about racially insensitive incidents, such as the company presenting Combs with a watermelon-flavored version of the tequila despite his objections and attempts to educate Diageo about the racial connotations related to watermelon. Further, Combs alleges that Diageo classified his tequila as a “Black” brand only marketable to urban customers.
Combs initial complaints stemmed from the company’s neglect of the DeLeón brand, including allocating all its agave — the main ingredient in tequila — to its other tequilas, erratic production leading to repeated shortages of DeLeónm and mistakes that led to a shipment of the tequila being impounded by Mexican authorities.
Diageo claims that Combs violated clauses that prevented him from disparaging the company or revealing confidential information. Combs’ attorney Hueston notes that under New York State law, an “absolute litigation privilege” allows him to raise these issues in a lawsuit.
“That privilege protects a party’s unfettered right of access to the courts and prohibits Diageo from punishing Mr. Combs for exercising that right,” says Hueston, adding that, ironically, a Diageo spokesperson had disparaged Combs in public statements outside of litigation.
Combs redacted over 2,500 words from his original complaint, going to great lengths to avoid revealing confidential information. A judge later determined that virtually all redacted content could be unsealed.
“Of the more than 2,500 words that Combs filed under seal, a mere ten words were ordered to remain under seal,” noted Hueston, who further disputed Diageo’s claim that the lawsuit was an attempt to avoid arbitration, which is required in their contract for disputes.
Diageo also claimed that Combs breached their agreement by raising issues dating back to 2007, having previously agreed to drop those complaints. But Hueston posits that nothing prevents Combs from discussing those issues as background in the complaint when they are directly relevant to the history of unfair treatment and racially insensitive incidents.
Timeline of Events in the Diddy vs. Diageo Dispute
2007 – Diageo reaches out to Combs to tap into his widely-known name and influence to boost its struggling vodka brand, Cîroc. Combs agrees to take on a pivotal role in all aspects of creative, marketing, product development, and innovation for Cîroc.
2009 – Ciroc’s annual sales surge from 75,000 cases to 400,000 cases, experiencing a staggering sales growth of over 3,000% since Combs began marketing it. It would reach approximately 2.6 million cases sold per year by 2014.
2013 – Leveraging their successful collaboration with Cîroc, Combs solidifies his partnership with Diageo by acquiring the luxury tequila brand DeLeón in a 50/50 partnership.
2021 – After years of raising concerns of unequal treatment and neglect by Diageo, Combs gets the company to agree to an “equal treatment” clause in their contract, pledging to treat DeLeón as it treats its other tequila brands, Casamigos and Don Julio.
May 31, 2023 – Combs takes legal action against the spirits conglomerate, accusing Diageo of neglect, racism, and unequal treatment in their co-owned tequila brand’s distribution, production, and sales. He seeks injunctive relief to compel Diageo to fulfill the “equal treatment” provision agreed upon in 2021.
June 27, 2023 – Diageo files a motion to dismiss the case and transfer it to secret arbitration while simultaneously endeavoring to sever its connections with Combs over both DeLeón Tequila and Cîroc Vodka. Combs’ attorney, John Hueston, calls this move akin to “firing a whistleblower.”
June 30, 2023 – A judge unseals significant portions of Combs’ lawsuit against Diageo, revealing new allegations of discriminatory behavior, including presenting Combs with a racially insensitive watermelon-flavored DeLeón, calling Cîroc an “urban African American brand tied to one personality,” withholding agave from DeLeón while allocating it to other brands, encountering issues with paperwork resulting in a shipment being impounded by Mexican authorities, and experiencing inconsistent production leading to frequent shortages.
July 12, 2023 – Hueston sends a letter to Diageo’s attorney demanding that the company put an end to its retaliatory and unlawful actions towards Combs, insisting Combs did nothing to violate his contracts and thus gave the company no legal reason to terminate the business relationship.
July 18, 2023 – Combs accuses Diageo of “illegal and outrageous retaliation” by its attempts to terminate their agreements, obstruct his role with the brands, and make disparaging statements. Combs makes these points in a motion to oppose Diageo’s attempt to compel arbitration and dismiss the case.
