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Gregory Packaging Inc. Wins $21.2M Unfair and Deceptive Trade Practices Case Against Global Foodservice Company Foodbuy
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Rhea-AI Summary
Gregory Packaging, a century-old juice manufacturer, has been awarded $21.2 million by a federal court against Foodbuy, LLC for engaging in unfair and deceptive trade practices. U.S. District Court Judge Frank D. Whitney mandated Foodbuy to pay this amount after finding it overbilled Gregory Packaging, including $14 million as a penalty. The judge criticized Foodbuy's billing practices as egregious and noted that the company had a pattern of similar misconduct with other manufacturers.
Positive
None.
Negative
Foodbuy failed to provide necessary data to uncover overcharges.
A pattern of unfair billing practices was identified, affecting other manufacturers.
CHARLOTTE, N.C.--(BUSINESS WIRE)--
Gregory Packaging, Inc., a 100-year-old family-owned juice manufacturer, was awarded $21.2 million after a federal court found Foodbuy, LLC engaged in unfair and deceptive trade practices.
On August 4, 2022, U.S. District Court Judge Frank D. Whitney ordered Foodbuy to pay $21.2 million for overbilling Gregory Packaging, of which more than $14 million is a penalty for unfair and deceptive trade practices. Foodbuy is a wholly-owned subsidiary of worldwide foodservice giant Compass Group (London Stock Exchange: CPG.L), whose revenue topped $30 billion in 2019.
The dispute began when Gregory Packaging discovered that Foodbuy charged them millions of dollars for volume allowance rebates on juice Foodbuy did not sell. “Foodbuy simply bills for every case they receive information from the distributor, and then waits for manufacturers to bring issues to them,” the Judge noted.
Foodbuy appealed that decision. Not only did Foodbuy lose its appeal, but the company was then ordered to pay more for engaging in unfair and deceptive trade practices. Judge Whitney found that Foodbuy’s actions amounted to “more than a mere breach of contract” and “instead demonstrate[d] aggravating and egregious circumstances” amounting to unfair and deceptive trade practices. The Judge thus increased the award to $21.2 million.
The court found that Foodbuy “continued overbilling despite representations to the contrary” and refused to provide the data necessary to discover the overcharges. That behavior, Judge Whitney found, “extends beyond a mere breach of contract and constitutes an unfair and deceptive trade practice.”
The court further found that Foodbuy’s practices were “not unique” to Gregory Packaging, and Foodbuy engaged in a pattern of the same conduct with other manufacturers.
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