FILED
`1/6/2022 5:54 PM
`FELICIA PITRE
`1 CIT/ SOS/ ESERVE
`
`Case 3:22-cv-00440-M Document 1-5 Filed 02/23/22 Page 1 of 27 PageID 21Case 3:22-cv-00440-M Document 1-5 Filed 02/23/22 Page 1 of 27 PageID 21
`EXHIBIT 3
`DISTRICT CLERK
`JURY DEMAND
`DALLAS CO., TEXAS
`Nikiya Harris DEPUTY
`
`CAUSE N0. DC-22-00224
`BRINKER INTERNATIONAL, INC.,
`IN THE DISTRICT COURT
`and BRINKER INTERNATIONAL
`PAYROLL COMPANY, L.P.,
`
`DALLAS COUNTY, TEXAS
`
`§§§§§§§§
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`§
`
`Plaintiffs,
`
`v.
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`US FOODS, INC. and SERVICES
`GROUP OF AMERICA, INC.,
`
`§§
`
`Defendants.
`
`_JUDICIAL DISTRICT
`§
`TO THE HONORABLE JUDGE OF SAID COURT:
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`Plaintiffs Brinker International, Inc. and Brinker International Payroll Company, L.P.
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`(collectively, “Plaintiffs” or “Brinker”) file this Original Petition and would respectfully show the
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`Court as follows:
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`PLAINTIFFS’ ORIGINAL PETITION
`
`INTRODUCTION
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`1.
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`This is a civil action brought by Plaintiffs against Defendants US Foods, Inc. and
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`Services Group of America, Inc. for breach of contract, conversion, unjust enrichment, tortious
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`interference, and declaratory relief. Defendants US Foods, Inc. (“USP”) and Services Group of
`America, Inc. (“SGA”) misappropriated legal claims that are rightfully Brinker’s in violation of
`Brinker’s distribution agreements. Specifically, USF and SGA are currently litigating claims that
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`should be Brinker’s in the case In re Broiler Chicken Antitrust Litigation, 1:16-cv-08637 (N.D.
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`Ill.) (“Broiler Chicken Litigation”) (and, on information and belief, settling some of them). By
`acting improperly as the owners of Brinker’s claims, USF and SGA have attempted to generate an
`undeserved windfall for themselves. This scheme represents an attempt by USF and SGA to take
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`PLAINTIFFS’ ORIGINAL PETITION — Page 1
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`money and other consideration owed to Brinker for the harm it suffered from the conduct alleged
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`in the Broiler Chicken Litigation.
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`2.
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`The defendants in the Broiler Chicken Litigation are largely suppliers of broiler
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`chicken, and are hereinafter referred to as the “Broiler Defendants.” The basic allegation in the
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`Broiler Chicken Litigation is that the Broiler Defendants conspiredto raise the price of chicken by
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`agreeing to restrict supply, manipulate price indices, and fix bids, among other conduct. The
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`claims at issue in the Broiler Chicken Litigation—including those which USF and SGA are
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`currently pursuing in violation of Brinker’s rights—are mostly, but not exclusively, antitrust
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`claims.
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`3.
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`Most food service distribution contracts are designed to be cost-plus contracts
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`wherebyprices are negotiated and set between the restaurants—like those operated by Brinker—
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`and their suppliers. Distributors—like USF and SGA—arethen typically compensated by a flat
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`fee or percentage for their logistical services. Distributors have norole in negotiating bids, prices,
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`product specifications, or contracts with suppliers and, with the exception of the flat fee or
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`percentage that serves as the “plus,” are usually prohibited by contract from accepting any form of
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`compensation from suppliers that is not expressly disclosed to and approved by the restaurant.
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`This ensures that both the agreed-uponpricing and any benefits provided by the supplier are passed
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`through to the restaurant retaining the distributor’s services.
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`4.
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`One significant reason why distributors are now required to pass through such
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`benefits and are prohibited by contract from accepting monies or compensation from suppliers
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`without approval is the long history of abuses that permeated the industry in the past, whereby
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`distributors attempted to generate or capture such moniesfrom suppliers as “hidden” or “sheltered”
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`income. These abusesresulted in widespreadlitigation against foodservice distributors, including
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`PLAINTIFFS’ ORIGINAL PETITION — Page 2
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`high-profile cases against the Fleming Companies in the 1990s and USF in the 2000s, amongst
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`others.
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`Indeed, the scheme employed here by USF and SGA seemingly represents the latest
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`variation on practices used to generate “hidden”or“sheltered” income, which, for USF, previously
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`resulted in one of the largest civil RICO class action settlements in history at $297 million.
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`5.
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`Asis the case with most distributor agreements in the restaurant industry, Brinker’s
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`distribution agreements with USF, SGA,and others are specifically designed to prevent this type
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`of abuse. They expressly provide that the distributor’s only compensation for services rendered1s
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`the agreed-upon “plus” and prohibit the distributor from accepting any other unapproved benefit
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`or compensation from suppliers or from seeking or recovering any type of compensation from
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`suppliers as a result of the overcharges or otherwise.
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`Indeed, pursuant to the terms of the
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`distribution agreements, the distributor is prohibited from accepting or receiving any rebate or
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`concession for the overcharges caused by the supplier. The distribution agreements specifically
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`state that the distributor “shall pass through” any benefit received from the supplier that relates to
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`Brinker’s purchases.
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`6.
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`Brinker’s distribution agreements further contemplate what happens with respect
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`to any legal claims against Brinker’s suppliers.
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`In the event there is any doubt about who had
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`either standing or the right to assert legal claims against Brinker’s suppliers, Brinker’s distribution
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`agreements mandatethat the distributor must assign any claims to Brinker upon request and require
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`that the distributor cooperate with Brinker in the prosecution ofits claims.
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`7.
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`Asone of the world’s leading casual dining restaurant companies, with restaurants
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`including Chili’s and Maggiano’s Little Italy among others, Brinker has been significantly harmed
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`by the antitrust conspiracy perpetrated by the Broiler Defendants. Indeed, during the relevant time
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`period alleged in the Broiler Chicken Litigation, Brinker purchased significantly more than $1
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`PLAINTIFFS’ ORIGINAL PETITION — Page 3
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`billion worth of broiler chickens from the Broiler Defendants for use in its restaurants. Even a
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`small overcharge caused by the alleged conspiracy would result in significant damage to Brinker
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`when applied to its volume of purchases. For that reason, almostall of Brinker’s distributors have
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`assigned their claims to and are cooperating with Brinker to ensure that it will be made whole for
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`the damage caused by the Broiler Defendants.
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`8.
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`Unlike Brinker’s other distributors, USF and SGA have refused to honor their
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`contractual commitments and have instead attempted to litigate Brinker’s claims in the Broiler
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`ChickenLitigation for their own benefit.
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`9.
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`By improperly acting as the owners of Brinker’s antitrust claims in the Broiler
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`Chicken Litigation, USF and SGA have attempted to generate an undeserved windfall for
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`themselves, even thoughneither has suffered any harm with respect to purchases made by Brinker.
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`This conduct is especially egregious in light of USF’s history and at a time whenthe restaurant
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`industry continues to suffer from the crippling effects of a global pandemic.
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`DISCOVERY CONTROL PLAN
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`10._—Plaintiffs intend that discovery be conducted under Discovery Level 3 in
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`accordance with Texas Rule of Civil Procedure 190.4 and request that the court enter a discovery
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`control plan order tailored to the circumstancesofthis suit.
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`PARTIES
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`11.—Plaintiff Brinker International, Inc. is a Delaware corporation with its principal
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`place of business in Dallas, Texas. It may be served in this matter through its counsel Eric R. Hail,
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`Hunton Andrews Kurth LLP, 1445 Ross Ave., Ste. 2900, Dallas, Texas, 75202.
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`12.
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`Plaintiff Brinker International Payroll Company, L.P.
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`is a Delaware limited
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`partnership and subsidiary of Brinker International, Inc.
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`It may be served in this matter through
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`PLAINTIFFS’ ORIGINAL PETITION — Page 4
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`its counsel Eric R. Hail, Hunton Andrews Kurth LLP, 1445 Ross Ave., Ste. 2900, Dallas, Texas,
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`75202.
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`13.
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`Defendant USF is a Delaware corporation with its principal place of business in
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`Rosemont,Illinois. USF may beserved throughits registered agent in Texas, Corporation Service
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`Company d/b/a CSC-LawyersInc., 211 E. 7th Street Suite 620, Austin, Texas, 78701.
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`14.
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`Defendant SGA is a Delaware corporation with its principal place of business in
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`Scottsdale, Arizona. SGA may be served through the Texas Secretary of State at the address
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`Service of Process, Secretary of State, James E. Rudder Building 1019 Brazos, Room 105, Austin,
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`Texas 78701, as it has failed to appoint or maintain a registered agent in thisstate.
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`T.R.C.P. 47 STATEMENT OF RELIEF SOUGHT
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`15.
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`Plaintiffs seek monetary relief in excess of $1 million against Defendants; a
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`declaratory judgment declaring that SSA’s assignment of the antitrust claims in the Broiler
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`Chicken Litigation that relate to Brinker’s purchases from the Broiler Defendants was not valid
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`and is null and void pursuant to the terms of one or both of the Distribution Agreements; and all
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`other relief requested herein and to which Plaintiffs are entitled.
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`JURISDICTION AND VENUE
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`16.
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`The subject matter in controversy is within the jurisdictional limits of this court, as
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`this suit is a civil matter in which the amount in controversy exceeds $500, exclusive of interest.
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`Jurisdiction also exists becausethis action is brought pursuant to Chapter 37 of the Texas Uniform
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`Declaratory Judgments Act.
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`17.
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`This Court has personal jurisdiction pursuant to Tex. Civ. Prac. & Rem. § 17.042
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`over USF and SGA because the Defendants contracted and transacted business with Brinker in
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`PLAINTIFFS’ ORIGINAL PETITION — Page 5
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`Texas, the contracts at issue were performedatleast in part in Texas, and Defendants caused harm
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`to Brinker in Texas.
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`18.
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`Venue in Dallas County is proper in this cause under Tex. Civ. Prac. & Rem. §
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`15.002(a)(1) because the contracts were performed in part, and certain acts or omissions that give
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`rise to this matter were committed, in Dallas County. Alternatively, if a substantial part of the
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`events or omissions giving rise to the claim are determined to have not taken place in Dallas
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`County, then venue is proper in Dallas County under Tex. Civ. Prac. & Rem. § 15.002(a)(4)
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`because there is no county that a substantial part of the events or omissions givingrise to the claim
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`occurred, nor do either of the Defendants maintain principal offices in Texas, such that the proper
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`venue is Brinker’s residence, Dallas County. Finally, the parties agreed that any disputes arising
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`underthe distribution agreement would be governed by Texaslaw andlitigated in the United States
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`District Court for the Northern District of Texas, or if such court lacks jurisdiction, the courts of
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`Dallas County, Texas.
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`FACTS
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`19.
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`Brinkeris one of the world’s leading casual dining restaurant companies and owns,
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`operates, or franchises more than 1,600 full-service restaurants in 29 countries and twoterritories
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`under the names Chili’s, Chili’s Grill & Bar, Maggiano’s, and Maggiano’s Little Italy (“Brinker’s
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`Restaurants’).
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`20.
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`Systems Services of America Inc. (“SSA”) is a former subsidiary of SGA. SSA
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`operated as one of Brinker’s distributors for the past decade pursuant to a distribution agreement
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`dated February 1, 2011 (the “2011 Distribution Agreement’) and a distribution agreement dated
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`February 1, 2016 (the “2016 Distribution Agreement”)
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`(collectively,
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`the “Distribution
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`Agreements”).
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`PLAINTIFFS’ ORIGINAL PETITION — Page 6
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`21.
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`On September 13, 2019, USF announcedthatit had successfully completed a $1.8
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`billion acquisition of five SGA subsidiaries, including SSA.
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`22.
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`In January 2020, following its acquisition of SSA, USF dissolved the SSA
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`corporate entity and assumedall ofits rights and obligations under SSA’s Distribution Agreements
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`with Brinker.
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`23.
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`On January 6, 2020, USF provided Brinker with notice of its acquisition and
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`dissolution of SSA, specifically referencing the 2016 Distribution Agreement. USF asked Brinker
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`to consent to the assignment of the 2016 Distribution Agreement from SSA to USF, and Brinker
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`agreed. USF is now the counter-party to the Distribution Agreements.
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`24.
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`Brinker solicited bids, negotiated prices, and entered into contracts directly with
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`food suppliers for the food prepared and used in its restaurants for resale to the public. This
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`included broiler chicken products that were priced and sold at specifications set by Brinker. These
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`broiler chicken purchases gaverise to the claimsat issue in the Broiler Chicken Litigation. Indeed,
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`as the most recent Distribution Agreement acknowledges, Brinker is the party that is obligated to
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`“secure suppliers of Products and establish pricing for the Products.”
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`25.
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`After Brinker secured suppliers and established pricing for products,
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`it then
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`provided SSA with a list of approved suppliers and a summary ofthe essential supply terms to the
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`extent necessary to permit SSA to transport the products from suppliers to Brinker’s Restaurants.
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`26.
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`SSA had no involvementin soliciting, negotiating, or setting the pricing of broiler
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`chickens for Brinker. Brinker alone solicited bids and negotiated prices from its suppliers and then
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`provided SSA with the list and information it needed to deliver the products. The only reason SSA
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`had any informationat all regarding pricing ofbroiler chickens to Brinker’s Restaurants is because
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`Brinker provided it with such information.
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`PLAINTIFFS’? ORIGINAL PETITION — Page 7
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`27.
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`As an approved Brinker distributor for a defined territory, SSA, the vendor for
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`Brinker, was responsible for picking up broiler chicken products ordered by Brinker’s Restaurants
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`from suppliers and transporting the products to their respective distribution center(s) in accordance
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`with specific guidelines, performance standards, schedules, requirements, and instructions set by
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`Brinker and agreed to by SSA. From the distribution centers, SSA was responsible for fulfilling
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`order placements and delivery of the broiler chicken products to Brinker’s Restaurants. Forits
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`warehousing anddistribution services, SSA was compensatedbya flat mark-up that served as the
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`delivery fee. The parties explicitly contemplated that this delivery fee would be the exclusive form
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`of compensation for SSA’s service.
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`28.
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`For the administrative convenience of Brinker,
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`the Distribution Agreements
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`contemplate that SSA initially pay for broiler chicken products at the Brinker-negotiated price
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`whenit picked them up from suppliers and then required SSA to pass on 100% ofthe cost, plus
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`the set delivery fee, to Brinker’s Restaurants upon delivery, which Brinker’s Restaurants promptly
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`reimbursed. Pursuant to this contractual arrangement, SSA was meant to simply serve as a pass-
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`through on pricing from Brinker’s suppliers to Brinker’s Restaurants.
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`29.
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`As a result of this contractual arrangement, any overcharge resulting from the
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`allegations in the Broiler Chicken Litigation was paid by Brinker alone. SSA did not suffer any
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`harm at all because it simply passed through to Brinker the exact and entire amount of any
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`overcharge resulting from the conspiracy at issue.
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`30.
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`To protect against any attempts by SSA to profit off its relationship with Brinker,
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`SSA, and its affiliates, predecessors, and assigns, are contractually prohibited from generating
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`hidden or sheltered incomeand instead are required to pass on any such moniesto Brinkeras part
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`of the privilege of serving as Brinker’s distributor.
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`These requirements are designed to
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`PLAINTIFFS’ ORIGINAL PETITION — Page 8
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`contractually prevent the abuses that previously led to the widespread litigation in the foodservice
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`distribution industry.
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`31.
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`For example, the 2016 Distribution Agreement includes a number of provisions
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`that prohibit SSA from retaining any type of payment by suppliers, including clauses in Section
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`4.17 that directly forbid the distributor from quietly accepting or otherwise receiving “any rebate,
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`fee, concession, transfer, payment or similar device” from suppliers and Section 5.1(c) that
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`affirmatively states that SSA “shall pass through the benefit of all manufacturers’ rebates,
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`discounts, promotions and other benefits relating to the products” to Brinker.
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`32.
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`The 2011 Distribution Agreement includes similar provisions.
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`For example,
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`Section 28 states that SSA “will not accept or otherwise receive” from any supplier “any rebate,
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`fee, concession, transfer, payment or similar device.” So, too, does Section 11 of Schedule C to
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`the 2011 Distribution Agreement require that SSA “[a]ccept no sheltered income on any Brinker
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`proprietary products.”
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`33.
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`The parties
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`specifically intended these provisions to cover any potential
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`compensation, concession or rebate received for overcharges that Brinker may have paid to
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`suppliers. Each of these provisions was a material, bargained-for part of the parties’ overall
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`agreement and, without their inclusion, Brinker would not have allowed SSA to serve as its
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`distributor.
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`34.
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`Moreover, because of these ironclad restrictions on accepting monies or
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`compensation from suppliers such as the Broiler Defendants, the parties contemplated situations
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`like the oneat issue here and included a mandatory obligation for the distributor to provide Brinker
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`with an assignment of any claims against its suppliers. Section 4.14 of the 2016 Distribution
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`Agreement states that, “upon reasonable request, distributor shall provide [Brinker] with an
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`PLAINTIFFS’ ORIGINAL PETITION — Page 9
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`assignment ofany legal rights and claims that it may have against suppliers” and expressly
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`requires SSA to “cooperate with [Brinker] in the enforcement of such rights against suppliers.”
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`(emphasis added).
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`35.
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`Similarly, Section 10A of the 2011 Distribution Agreementstates that SSA “shall
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`assign to Brinker ... all assignable rights against Approved Suppliers of good [sic] supplied to
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`Brinker by” SSA. (emphasis added).
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`36.
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`The parties structured the assignments in this manner (i.e., as a requirement to
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`provide an assignment, rather than as a general assignment) to provide flexibility and ensure that
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`Brinker could obtain the assignment in the proper format required by the circumstances.
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`If, for
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`example, Brinker believed it needed an assignmentthat was tailored to a specific antitrust case,
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`the parties intended for this provision to allow it to obtain that specific assignment.
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`37.
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`The Distribution Agreements also contain provisions designed to ensure that SSA
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`does not attempt to take any action that would underminethe parties’ clear intent. For example,
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`Section 18.10 of the 2016 Distribution Agreement prohibits SSA and any ofits affiliates from
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`“tak[ing] any action, the purpose of whichis to subvert or evade any provision of this Agreement.”
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`38.
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`Section 18.4(a) of the 2016 Distribution Agreementalso states that it “shall inure
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`to the benefit of and be binding upon the respective successors and assigns, if any, of the parties
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`hereto,” which means that SSA’s obligations now are USF’s obligations.
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`39.
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`Brinkerhas exercised its rights under the Distribution Agreements and requested a
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`specific assignment from USF (SSA’s successor and assign) and SGA (SSA’s former parent) for
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`any andall claims they possess in the Broiler Chicken Litigation that relate to broiler chickens
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`distributed by SSA to Brinker. Despite multiple requests, both USF and SGA haverefused to
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`honor their contractual obligations to provide Brinker with an assignment.
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`PLAINTIFFS’ ORIGINAL PETITION — Page 10
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`40.
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`As part of these discussions, Brinker was informed that USF could not assign the
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`antitrust claimsrelating to Brinker’s purchasesat issue in the Broiler Chicken Litigation to Brinker
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`because SSA had secretly assigned—without any notice to Brinker—all of Brinker’s antitrust
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`claims to SGA. Brinker was further informed that SGAretained then-existing claims when SGA
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`sold SSA to USF, but surrendered control of daily operations and of antitrust claims that accrued
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`after the effective date. On information and belief, USF was aware of this secret agreement prior
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`to its acquisition of SSA.
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`41.
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`—_In other words, SSA assigned the claims in the Broiler Chicken Litigation to its
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`corporate parent, even thoughit was contractually obligated to assign those claims to Brinker upon
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`request, in an attempt to misappropriate Brinker’s claims. This assignment allowed Defendantsto
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`pocket any compensation as hidden or sheltered income in violation of the Distribution
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`Agreements.
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`42.
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`SSA’s secret assignmentof antitrust claims in the Broiler Chicken Litigation to
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`SGAisin direct violation of Section 18.4(a) of the 2016 Distribution Agreement, which expressly
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`prohibits SSA from assigning or otherwise transferring the Agreement, in whole or in part, without
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`Brinker’s prior written consent, and the failure to obtain Brinker’s consent constituted an express
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`breach of the agreement.
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`43.
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`SSA’s assignmentof these antitrust claims to SGA is null and void because SSA
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`did not provide notice to Brinker or get Brinker’s written consent to make the assignment.
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`44.
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`SGAin its ownright is in violation and breach of the 2016 Distribution Agreement,
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`which expressly states in Section 18.10 that SSA andits affiliates, which included SGA as SSA’s
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`parent at the time of the assignment, from “tak[ing] any action, the purpose of which is to subvert
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`or evade any provision of this Agreement.” SGA,fully intending to sell SSA to USF, worked out
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`PLAINTIFFS’ ORIGINAL PETITION — Page 11
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`a secret side deal with SSA and, on information and belief, USF, to retain the antitrust claims in
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`the Broiler Chicken Litigation related to Brinker’s purchases without informing Brinker in an
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`effort to get around the clear assignment requirements in the Distribution Agreements. This side
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`agreement and/or assignmentis a clear effort to subvert or evade Brinker’s right to request an
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`assignment from SSA (now USF underthe Distribution Agreements) and an attempt to prevent
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`Brinker from suing its now counterparty, USF, for specific performance.
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`45.
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`Brinker has repeatedly informed USF and SGAthat they cannotlitigate or settle
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`claims in the Broiler Chicken Litigation that, at a minimum, belong to Brinker from the timeofits
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`request for an assignment, but both USF and/or SGA continue to do so.
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`46.
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`Upon information and belief, USF and/or SGA have settled some claims with
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`certain Broiler Defendants in the Broiler Chicken Litigation that include purchases made on behalf
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`of Brinker. These settlement agreements are null and void because neither USF nor SGA had the
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`right to litigate or settle the portion of their claims that rely on purchases by Brinker. Moreover,
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`both parties are explicitly prohibited from accepting any compensation from suppliers under the
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`Distribution Agreements for purchases made by Brinker.
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`47.
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`Despite multiple requests, USF and SGA havesignaled that they intend to keep any
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`monies they receive in the Broiler Chicken Litigation that relate to purchases made by Brinker for
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`themselves and will not pass such compensation on to Brinker as required under the Distribution
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`Agreements.
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`48.
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`To the extent that USF and/or SGA havesettled some of Brinker’s claims in the
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`Broiler Chicken Litigation and do not intend to pass such recoveries on to Brinker as required
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`underthe Distribution Agreements, they have generated an enormous windfall for themselves as
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`they have not been damaged by the Broiler Defendants’ conduct. Theyinitially passed on to
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`PLAINTIFFS’ ORIGINAL PETITION — Page 12
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`Brinker the inflated prices charged by the Broiler Defendants. Then, when the settling Broiler
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`Defendants agreed to essentially refund a portion of the overcharge on Brinker’s purchases through
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`a settlement of the antitrust claims, USF and/or SGA pocketed that money for themselves and
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`refused to pass it on Brinker. In other words, USF and/or SGA have pocketed the monetary remedy
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`for the overcharge as reflected in the settlement agreementthat they did not pay, thereby resulting
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`in a windfall at their customer’s expense.
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`49.
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`SGAhasalso potentially jeopardized Brinker’s claimsbyfailing to opt out of some
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`of the relevant class settlements on time, thus compromising the value of Brinker’s claims.
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`50.
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`This conduct is a breach of the Distribution Agreements, unjust enrichment,
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`conversion of monies properly owed to Brinker by contract, and tortious interference with
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`Brinker’s rights under the Distribution Agreements.
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`51.
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`As the party that assumed all rights and obligations under the Distribution
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`Agreements, USFis now obligated to provide the assignmentofthe antitrust claims to Brinker and
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`pass on to Brinker any monies received to date through settlements that rely on Brinker purchases.
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`USF, however, has claimed that it could not assign claims to Brinker that SSA hadalready secretly
`
`assigned to SGA. As noted above, SSA could not have effectuated an assignment of the claims
`
`making the basis of this lawsuit in light of the unambiguous contractual provisions within the
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`Distribution Agreements. USF’s claim also makesnological sense because,to the extent that SSA
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`acted in violation of law at or before its acquisition by USF, USF’s remedy lies against SGA and
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`SSA.
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`52.
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`SGAalso is in clear breach of the 2016 Distribution Agreement that prohibited it
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`from subverting or evading its terms. As a result, SGA’s refusal to assign the antitrust claims to
`
`PLAINTIFFS’ ORIGINAL PETITION — Page 13
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`Brinker and/or pass on to Brinker any monies received to date through settlements that rely on
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`Brinker purchases entitles Brinker to specific performance and/or damages.
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`53.
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`Simply put, USF and/or SGA have and are enriching themselves at Brinker’s
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`expense and in violation of Brinker’s rights and USF’s and SGA’s obligations under the
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`Distribution Agreements. Permitting USF and SGAto continuelitigating the antitrust claims in
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`the Broiler Chicken Litigation and pocketing monies acquired through settlements and/or verdicts
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`that should be assigned to and/or passed on to Brinker would be a green light for the resurrection
`
`of past abuses by USF andotherdistributors in the foodservice distribution industry that resulted
`
`in decadesoflitigation and massive settlements.
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`54.
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`The parties agreed to the very contractual terms at issue here to protect Brinker
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`against such practices and abuses by distributors. The type of conduct demonstrated by USF and
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`SGA here stands in clear violation of the Distribution Agreements, state law, and principles of
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`equity.
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`55.
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`All conditions precedent to Brinker bringing this action and Brinker’s request for
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`relief have beensatisfied.
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`COUNTI- BREACH OF CONTRACT
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`56.
`
`57.
`
`58.
`
`59.
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`Brinker incorporates paragraphs | through 55 as if restated herein.
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`The Distribution Agreements are valid and binding contracts on USF and SGA.
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`Brinkeris a party to the Distribution Agreements.
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`USFis a party to the Distribution Agreements through the assignment from SSA as
`
`approved by Brinker.
`
`60.
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`USF has assumed all rights and obligations of SSA under the Distribution
`
`Agreements.
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`PLAINTIFFS’? ORIGINAL PETITION — Page 14
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`61.
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`Brinker
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`sufficiently complied with its performance obligations under
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`the
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`Distribution Agreements.
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`62.
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`The Distribution Agreements expressly contemplate that the agreed-upon markup
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`is the only form of compensation that SSA was and USF and SGAare now permitted to recover.
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`63.
`
`The Distribution Agreements prohibit the distributor from retaining monies or
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`things of value, including cash or in-kind settlements of antitrust claims, from suppliers.
`
`64.
`
`The 2016 Distribution Agreement requires the distributor to pass through any
`
`rebates, discounts, promotions, concession, transfer, payment, or other benefits and correct for
`
`price adjustments by the suppliers, including cash or in-kind settlements of antitrust claims.
`
`65.
`
`The 2016 Distribution Agreement prohibits SSA’s affiliates, and thus SGA and
`
`USF, from subverting or evading any provision of the Distribution Agreement. Any attempt to
`
`misappropriate Brinker’s claims would subvert and evade the protections required by Brinker in
`
`the Distribution Agreements to avoid a repeat of past abuses in the industry, including those by
`
`USF.
`
`66.
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`SGAis bound by and prohibited from subverting or evading any provision of the
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`2016 Distribution Agreement as SSA’s former parent. SGA wasfully aware of the requirement
`
`that SSA’s affiliates could not subvert or evade the terms of the Distribution Agreements. SGA,
`
`nevertheless knowingly breachedthis provision by secretly agreeing with SSA and, on information
`
`and belief, USF, to have SSA assign the antitrust claims related to Brinker’s purchases to SGA in
`
`an effort to shield them from Brinker’s exercise of the assignment provision after SSA wassold to
`
`USF and Brinker’s pursuit of specific performance.
`
`67.
`
`The 2016 Distribution Agreement also required that Brinker receive notice of and
`
`consent to SSA’s attempt to assign antitrust claims related to Brinker’s purchases to SGA. Since
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`SSA, SGA, and/or USF failed to seek or acquire Brinker’s consent to the assignment, SSA’s
`
`assignmentof the antitrust claims in the Broiler Chicken Litigation to SGA is null and void.
`
`68.
`
`Underthe 2016 Distribution Agreement, SSA was and USFis obligated to provide
`
`Brinker with an assignmentofall claims against its suppliers at Brinker’s request.
`
`69.
`
`Underthe 2011 Distribution Agreement, SSA was and USFis obligated to provide
`
`Brinker with an assignmentofall claims against its suppliers at Brinker’s request.
`
`70.
`
`Despite repeated requests by Brinker, USF and SGA haverefused to pass through
`
`any compensationor other benefits related to Brinker’s purchases from the Broiler Defendants that
`
`are at issue and/or provide Brinker with an assignment of claims against the Broiler Defendants in
`
`the Broiler Chicken Litigation as is required under the Distribution Agreements.
`
`71.
`
`Instead,
`
`in violation of the Distribution Agreements, USF, SGA, and/or SSA
`
`illegally:
`
`a.
`
`assigned antitrust claims related to Brinker’s purchases at issue in the Broiler
`
`Chicken Litigation to SGA without authority to do so in an attempt to subvert
`
`and evade the assignment provisions in the Distribution Agreements;
`
`b.
`
`refused to assign the antitrust claimsat issues in the Broiler Chicken Litigation
`
`to Brinker;
`
`c.
`
`litigated Br