Billionaire music mogul Sean “Diddy” Combs secured an early victory in his legal dispute with Diageo as a judge rejected the liquor giant’s motion to dismiss his accusations of racism in the marketing and distribution of his liquor brands.
Judge Joel M. Cohen of the New York Supreme Court for New York County also declined Diageo’s request to compel arbitration, as revealed in court documents filed on Thursday.
This decision allows Combs to proceed in gathering evidence to substantiate his claims that Diageo did not provide the same level of support for his Diageo-backed liquor labels, Ciroc Vodka and DeLéon Tequila, as it did for its collaborations with white celebrities, as reported by Bloomberg Law.
Combs attended the court hearing in person and intends to be present throughout the case’s duration.
The legal dispute between Combs and Diageo commenced in May when the music icon asserted that his business partner had “sabotaged” his DeLeón brand with subpar packaging that cheapened the product’s appearance, according to the complaint.
The 53-year-old maintained that Diageo repeatedly failed to fulfill its promises of providing adequate support for production, distribution, and sales for both DeLeón and Ciroc, according to court records. The filing claimed that Diageo’s categorization labeled Ciroc and DeLeón as “urban,” “African American,” and “black” brands, rooted in the mistaken belief that a black entrepreneur could only appeal to individuals with a similar racial background.
In contrast, the complaint underscored that Diageo invested “over $1 billion to acquire and develop” George Clooney’s Casamigos tequila brand, marketing it to a diverse consumer base and generating billions in sales, despite having only white founders.
While the exact amount of Diageo’s investment in Ciroc and DeLeón was not detailed in the court documents, it contended that Combs played a pivotal role in transforming “struggling Ciroc” from a modest 75,000 cases in annual sales to a multimillion-dollar enterprise within a few years.
In Diageo’s motion to dismiss Combs’ complaint, the company claimed to have injected “over $100 million” into the DeLeón venture and alleged that Combs contributed a mere “$1,000 initial capital.”
Combs’ attorney, John Hueston, refuted this claim, claiming that Combs has fulfilled all obligations under his DeLeón joint venture agreement, including financial contributions.
Hueston explained that Combs’ agreement with Diageo required the company to finance the joint venture and “assume primary responsibility for ensuring adequate production and distribution.” In return, Combs would leverage his global fame and influence to promote DeLeón to consumers, distributors, and retailers, thus contributing significant value to the DeLeón brand.
Combs’ affiliation with Diageo dates back to 2007, when the London-based conglomerate, owning over 200 brands, including Guinness beer and Tanqueray gin, approached him about Ciroc.
Throughout his association with Diageo, Combs is reported to have earned nearly $1 billion.
