Judge rules against Santa Barbara Smokehouse in AquaChile case

Published on
March 23, 2022
A United States District Court judge ruled against Santa Barbara Smokehouse in its breach of contract lawsuit against Agrosuper’s AquaChile division.

A U.S. District Court judge has ruled against Santa Barbara Smokehouse in its breach of contract lawsuit against Agrosuper’s AquaChile division.

Santa Barbara, California, U.S.A.-based The Santa Barbara Smokehouse sued Agrosuper and its AquaChile division in early 2020, alleging that AquaChile’s breach of contract caused a potential buyer to back out of purchasing the smokehouse.

However, U.S District Court for the Central District of California Senior District Judge Ronald S.W. Lew ruled in favor of AquaChile’s counterclaims for breach of contract for nearly USD 557,000 (EUR 506,000).

In addition, the judge ruled against Santa Barbara Smokehouse in all 10 of its claims for relief.

Santa Barbara’s original complaint alleged that, due to AquaChile’s inability to supply it with “washed” salmon fillets during the first half of 2019, a prospective buyer of The Santa Barbara Smokehouse backed out of purchasing the company.

“The smokehouse was on track to meet the performance goals up to the anticipated time of closing, and everything appeared on course to reach a firm agreement and closure of a sale,” Santa Barbara wrote in the complaint. “Had a sale been completed, it would have conferred significant economic benefits on the smokehouse and DHBrands.”

However, according to Santa Barbara Smokehouse, AquaChile said it would cut off supplying raw salmon fillets to Santa Barbara, as “retribution for the smokehouse’s prior lawsuit against Agro America,” the complaint said.

Santa Barbara sued Agro America, which was AgroSuper’s subsidiary and distribution arm in the U.S., in 2015 for allegedly supplying it with listeria-tainted salmon fillets.

“There was no apparent economic reason for AquaChile not to sell the fillets to the smokehouse or to continue supplying fillets, as AquaChile would have made profits on such sales,” Santa Barbara said.

However, AquaChile said in court documents that it supplied Santa Barbara Smokehouse with salmon weekly from 2015 through September 2019.

In October 2019, AquaChile “determined that it was no longer efficient or in its business interests to continue the washing process – the smokehouse was the only customer that requested washed fish, which, among other things, required extensive reconfiguration of plant space and processing time to accommodate the request of a single customer,” AquaChile said.

According to AquaChile, its entire processing operation had to be stopped when washing the fish, so no other fish could be processed for its other customers – all of whom were purchasing unwashed fish.

“Thereafter, once the washed fish were rinsed and readied for shipment, the entire plant had to be sanitized and cleaned to remove the wash chemicals from the processing equipment, among other things,” AquaChile said.

As a result, AquaChile made the decision to cease supplying washed fish altogether.

It is not clear whether Santa Barbara Smokehouse will file an appeal in the case. Neither Santa Barbara Smokehouse nor Agrosuper responded to SeafoodSource’s requests for comment.  

Photo courtesy of The Santa Barbara Smokehouse website

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