Blue Star wants Red Lobster breach of contract case dismissed

A Red Lobster restaurant
A Red Lobster restaurant | Photo courtesy of Tada Images/Shutterstock
4 Min

Red Lobster’s breach of contract lawsuit against Blue Star Foods should be dismissed, Blue Star said in a new filing in Orange County Circuit Court in Orlando, Florida, U.S.A.

In the original complaint filed in July 2023, Orlando-based Red Lobster Sourcing claimed that Miami, Florida, U.S.A.-based Blue Star Foods and John Keeler & Co. failed to supply contracted crabmeat, causing the large seafood restaurant chain to take certain high-profit items off its menu and lose “substantial” revenue.

The damages exceed USD 500,000 (EUR 461,000), according to Red Lobster.

Blue Star agreed to provide Red Lobster with 67,248 pounds of crabmeat between October 2020 and March 2021 via distributor Performance Food Group, according to the complaint. Blue Star provided all the crabmeat for that contract, but its subsequent contract, which spanned from April through September 2021 and called for Blue Star to provide 114,539 pounds of crabmeat to Red Lobster, was not fulfilled. 

Blue Star said it “could not forecast the world-wide impact that Covid-19 had throughout the world and specifically in Vietnam.” In April 2021, Vietnam experienced a fast-spreading outbreak of more than 350,000 Covid-19 cases in a wave of the disease that lasted through September 2021.

“Vietnam was shut down, and [we] could not meet its requirements under the contract; no alternative sources of crabmeat came to fruition,” Blue Star said.

In August 2021, the company formally conveyed in writing its inability to fulfill the contract.

Blue Star is claiming it is covered by a force majeure clause in the contract stating “neither party shall be held responsible for any delay or failure in performance of any part of this agreement to the extent such delay or failure is caused by fire, flood, civil, governmental or military authority, act of God, or other similar causes beyond its control and without the fault or negligence of the delayed or nonperforming party or its subcontractors.”

“It is interesting to note, with all of Red Lobsters resources and extensive association with General Mills, Red Lobster was unable to cover and secure substitute or replacement crabmeat,” Blue Star said. Additionally, Thai Union Group, which made a USD 575 million (EUR 530 million) strategic investment in Red Lobster in 2016, is a “leading global seafood supplier,” Blue Star said. Thai Union recently announced the sale of its stake in Red Lobster.

“Thai Union had expanded its product lineup and now offers many seafood varieties, including lobster, shrimp, sardines, mackerel, tuna, salmon, and crab. Thai Union owns a number of leading global seafood brands, including Chicken of the Sea, King Oscar, John West, and Petit Navire, in addition to world-class facilities in 12 countries that provide sourcing, production, and distribution networks worldwide and, yet, because of the Covid-19 pandemic could not supply crabmeat, too,” Blue Star wrote.

Blue Star is requesting Red Lobster’s claims be dismissed with prejudice, and it should be awarded its attorneys fees and reimbursement of the costs of defending itself.

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