ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, September 27, 2022

Ben & Jerry's Sues Alleges Breach of Contract by Its Acquirer, Unilever

Today, we return to a topic that I've blogged about before, but with a new twist.  Back in June, I posted here about Arkansas Times, LP v. Waldrip, which was a First Amendment challenge to Arkansas Act 710 (Act 710).  Act 710 requires that contractors seeking to work with the state provide a certification that they will not participate in a boycott of Israel.  The First Amendment came in second in that race, and for once, I, a person who thinks our First Amendment jurisprudence is dumb, think it should have come in first.  At the end of that post, I comment on Act 710 and the similar acts passed by state legislatures across the country:

West BankAct 710, like its counterparts in other states, defines “boycott of Israel” to include any actions "intended to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories . . . ” (emphasis added).  The "Israeli-controlled territories" are not Israel.  If they were, then there would be 5.3 million Palestinians entitled to Israeli citizenship.  That ain't happening.  The "Israeli-controlled territories" are occupied territories.  Boycotting the occupation is not a boycott of Israel.  These state acts punish entities not for boycotting Israel but for boycotting the occupation.  There's a huge difference.  Ask Ben & Jerry's, which is subject to divestment actions by Arkansas and other states for its refusal to sell its products in the occupied territories.  But Ben & Jerry's has remained committed to selling its products in Israel.  

The inclusion of the language about the "Israeli-controlled territories" is, in my view, conclusive proof that Act 710 is not an economic measure.  It is a political measure and compelled compliance with the state's political stance on the Israeli occupation violates the First Amendment.  Even if I did not think Act 710 violated the First Amendment, I would still find it preposterous that any U.S. state would blur the lines between support for Israel and support of the occupation.

So, Ben & Jerry's.  This stuff makes me nuts.  I have family in Israel.  My father, who lived in Mevaseret Zion, near Jerusalem, loved Ben & Jerry's, and he always had some in the freezer when I came to visit.  He passed a year and a half ago, but my mother is still there.  I visited in July, and we bought some Ben & Jerry's in the local supermarket.  It would be different if my parents lived in Hebron.  A lot of things would be different if my parents lived in Hebron, because I would never visit them there, and we likely would not be on speaking terms.  We also would not be buying Ben & Jerry's in the occupied territories, but that would be the least of our problems.

In 2000, the real Ben and Jerry sold their company, Ben & Jerry's, to Unilever for $325 million.  At that time, they did not relinquish control over the company's social mission.  Selling their product in the Israeli-occupied territories is inconsistent with that mission,  As reports in The Guardian, Unilever sold the Israeli arm of Ben & Jerry’s to Avi Zinger, the owner of American Quality Products (AQP), which would distribute Ben Jerry's products in the occupied territories.  Ben & Jerry objected and demanded that the deal be unwound.  Zinger sued Unilever, and Unilever settled by selling to Zinger the license to distribute Ben Jerry's ice cream. Zinger apparently intends to distribute Ben & Jerry's in the occupied territories.

Ben and Jerry claim that the sale of a license violates the terms of the 2000 sale and they are suint to have the sale revoked.  Unilever is claiming that it cannot revoke the sale.  A District Court refused Ben and Jerry's motion to preliminarily enjoin the sale.  They are now amending their complaint and will be back in court in November.  Hard to know how their contractual claim should fare.  We'll have to wait to see the complaint and look at the terms of the sale in 2000.  In the meantime though, I hope the judge is aware (because most state legislatures apparently are not) that, under current law, the occupied territories are not a part of the state of Israel.

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