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Mass. distributors win "can scam" suit.

A Massachusetts Superior Court judge has awarded treble damages totalling over $3 million to two Massachusetts beer wholesalers who were victims of a redemption scam that exploited the returnable container system. The case is seen as presenting a first-time legal remedy for what is regarded as a pervasive problem for distributors in "bottle bill" states.

Merrimack Valley Distributing Co. of Danvers, MA and Martin Distributing of Shirley, MA each won maximum judgements allowed by the court--$2,060,000 and $958,142, respectively.

Each wholesaler had already won jury awards totalling $630,000 in April when two redemption centers, and the individuals who own the centers, were found to have defrauded the two distributors by importing empty bottles and cans from Maine and redeeming them a second time in Massachusetts.

In commenting on the decisions impact, H. Glenn Alberich, a litigator concentrating on alcoholic beverage law with Leboeuf, Lamb, Leiby and MacRae, Boston, said, "This case provides a bases for attacking schemes to make illicit profits under bottle law statutes.

The suit was not only a first-time action, but it also used, in an unprecedented application, a claim that the defendants' actions violated the unfair business practice statute.

Alberich filed the original lawsuit in 1988 on behalf of the two distributors, claiming that Salisbury Redemption Center and two other companies were buying redeemed containers in Maine at scrap value, averaging one cent each, trucking them to Massachusetts, and selling them to distributors as unredeemed cans and bottles at seven cents each.

"The number of containers subject to fraudulent redemption is mind-boggling. This suit certainly sheds light on the problem and provides ammunition for deterring potential defrauders," said Alberich.

LaBoeuf, Lamb, Leiby and MacRae is a 470-attorney full-service law firm with offices in 14 U.S. cities. The firm reports that it has "significant litigation capability."
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Title Annotation:Massachusetts beer wholesalers
Publication:Modern Brewery Age
Date:Nov 1, 1993
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