Southern Wine & Spirits of America Inc. and its Nevada senior managing director, Larry Ruvo, won a sweeping court victory Thursday against a Los Angeles-area rival that infringed on some of its exclusive champagne and wine distribution deals.
An eight-person Clark County District Court jury found for Southern Wine on all 12 of its counts covering claims such as unfair competition, contractual interference and civil conspiracy.
The jury awarded the company $199,000 in actual damages and will convene again Tuesday to set an amount for punitive damages.
The jury also awarded $69,000 to a marketing arm of the Cristal champagne maker Louis Roederer.
It is uncertain whether Transat Trade Inc. and Chateau Vegas Wine Inc., the defendants owned by independent importer and distributor Guy Azera, will also have to shoulder Southern Wine’s legal bills for a case now in its 11th year.
Ruvo testified that those bills amounted to $6.5 million.
“Unreal,” whispered a distraught Azera after the verdict was read.
Attorneys for both sides declined to comment. Ruvo did not appear in court.
On one level, Wednesday’s closing arguments focused on Azera’s business conduct in Nevada.
Clark County District Judge Mark Denton ruled in 2008 that Azera had violated exclusivity rights held by Miami-based behemoth Southern Wine & Spirits of America when selling a dozen labels of Bordeaux wine and three pricey champagnes: Dom Perignon, Cristal and Vueve Cliquot.
Denton’s ruling was upheld three years later by the Nevada Supreme Court.
During the three-week trial, Azera attorney R. Duane Frizell tried to make the case that it was never clear whether Southern Wine held the exclusivity deals it claimed until six years of litigation led to Denton’s ruling.
Even so, Frizell said, Southern Wine claimed sole rights to several wines that turned out to be false.
Along the way, officials at the Nevada Department of Taxation had approved of every step Azera took, Frizell said.
Southern Wine attorney E. Leif Reid described the professed confusion as a mere cover to an “illegal, truly fraudulent way of doing business.”
Both sides, however, argued that the case carried much broader implications.
“This entire state is watching, because this case will have ripple effects” if Azera is not punished for what he said was a scheme to circumvent liquor laws that protected consumers from fakes and poor quality, Reid said.
Denton told the jury to disregard the remark after sustaining an objection by Azera’s attorney .
Southern Wine did not contend that Azera ever dealt counterfeits or products that sickened customers.
However, Reid did allege instances where Azera sold to retailers at a steep discount to Southern Wine list prices.
For his part, Frizell cast Southern Wine and Ruvo as intent on using the regulatory system, including lobbying the Legislature for favorable changes, to pummel a relatively small rival such as Azera.
“Who are we really dealing with here? Southern Wine is a gorilla and they are crushing their competition. ... And he who changes the rules, rules.”
Contact reporter Tim O’Reiley at firstname.lastname@example.org or 702-387-5290.