Risk Update

Wine-y Conflicts — Grapes of (Disqualification) Wrath

Posted Dan Bressler

Sometimes the headlines write themselves (along with the miniseries): “Old Friends Split over Napa Cab” —

  • “They were great friends until one stopped sending the other wine… But in 2016, Schrader stopped sending his annual shipment of 17 cases of his expensive Schrader Cellars Napa Valley Cabernet Sauvignon to Roach. ‘I stopped sending Roach wine in 2016 when he stopped giving me legal advice,’ Schrader said in a deposition.”
  • “Then, in 2017, Schrader sold his very high-end wine brand for about $60 million to Constellation Brands, a shocking upscale move at the time for Constellation. Now Roach and Schrader are suing each other in state and federal courts over Roach’s claim that he was an investor in Schrader’s business. Roach filed a lawsuit in Harris County, Texas (Houston is the largest city) against Schrader and Constellation. Schrader then filed a federal lawsuit arguing that while all his exes may live in Texas, the jurisdiction for this case resides elsewhere.”
  • “It’s a nasty battle and the court records show how the two men’s former friendship curdled into hatred. Constellation’s attorney Casey Low accused Roach’s attorney – who is also Roach’s law firm partner – of deliberately filing timely document requests while Low’s wife was undergoing a medical emergency.”
  • “Roach and Schrader agree that they were very good friends, and that in 2000, Roach gave Schrader $135,000 to buy grapes, and that several years later Schrader repaid Roach $150,000. That’s where their stories diverge. Roach claims that the money was for a very specific purpose: to enter into a longterm lease to buy specific rows of Clone 337 Cabernet Sauvignon grapes from Beckstoffer To Kalon vineyard. Schrader claims the money was just to ‘buy grapes,’ but not those in particular. Schrader claims the $135,000 he got from Roach in 2000 was a loan that he paid back in full.”
  • “A complicating factor is that in 2002, Roach and Schrader formed a company in California called Roach Brown Schrader (RBS) LLC. The ‘Brown’ is winemaker Thomas Rivers Brown, who has apparently managed to avoid being sued by either so far. In 2003, the company charter was amended to cut out Brown, but kept the name RBS…In 2013, Schrader cancelled the Roach Brown Schrader LLC. Roach claims he didn’t learn about this until 2017, when Schrader Cellars was sold.”
  • “Schrader claims the statute of limitations for Roach to complain about the cancellation of the LLC has expired, because Roach didn’t file a lawsuit until 2018. He has also asked the court to disqualify Roach’s attorney John W. Newton III, a partner in Roach’s law firm, because Roach has access to Schrader’s records; Roach gave Schrader legal advice for years.”
  • “Then there’s the question of jurisdiction. Though almost every aspect of the case happened in California, Roach is trying very hard to keep the case in Harris County. Roach argued that he helped promote Schrader wines in Texas, and that Schrader attended several wine dinners in Texas… Roach argued that Harris County has jurisdiction because Constellation sells wine there… The wine shipments have stopped, but both the state and federal lawsuits are ongoing.”