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Unilever asks US judge to dismiss Ben & Jerry’s lawsuit against West Bank sales

  • December 03, 2022

NEW YORK — Unilever, the parent company of Ben Jerry’s, has asked a US judge to dismiss a lawsuit from the ice cream maker as a court battle over its attempt to boycott Israeli settlements drags on.

The UK conglomerate argued in a Friday court filing that Ben Jerry’s had overstepped its bounds with the attempted boycott last year and its lawsuit against Unilever.

The Vermont-based company’s “insistence on taking sides in the Israeli-Palestinian conflict created an untenable situation” for all parties, the motion said.

Unilever, one of the world’s largest consumer goods conglomerates, acquired Ben Jerry’s in 2000 under a unique merger agreement that gave the ice cream maker’s board the authority to protect the company’s “social mission,” which it sees as key to its financial success.

Using that authority, the Ben Jerry’s board announced a boycott of West Bank settlements last year, without coordinating with Unilever. The boycott triggered massive financial blowback for Unilever, and Ben Jerry’s Israel sued the UK-based international company over the move.

The two sides reached a settlement earlier this year that gave Ben Jerry’s Israel the independence to continue sales in Israel and the West Bank under Hebrew and Arabic branding. Ben Jerry’s is now suing Unilever over the decision to spin off its Israel branch.

The motion filed Friday in a New York federal court argued that the board’s “narrow set of responsibilities” stipulated by the merger agreement did not cover any power over sales of assets.

Unilever also said the Ben Jerry’s board lacks the authority to file lawsuits on behalf of the company. It is rare, if not unprecedented, for a major commercial firm to sue its parent company.

“By seeking to stop sales of Ben Jerry’s ice cream in the West Bank,” the motion said, the board “subjected Ben Jerry’s to harm, including multiple lawsuits, claims that it is in violation of Israeli law, criticism from the Israeli government and various investigations.”

Ben Jerry’s independent board said in a statement last month that Unilever’s sale was made without the board’s consent.

“Ben Jerry’s position is clear: the sale of products bearing any Ben Jerry’s insignia in the Occupied Palestinian Territory is against our values,” the statement said.

In August, a US federal judge rejected Ben Jerry’s injunction request to block West Bank sales during the lawsuit. The judge said Ben Jerry’s failed to show that Unilever’s decision would hurt Ben and Jerry’s social mission or confuse its customers.

The ice cream maker’s decision to boycott settlements sparked uproar in Israel and among some US Jewish groups. Critics of the settlement boycott have argued it is antisemitic because the company has never attempted to boycott any other region of the world.

Supporters of the Boycott Israel movement say that in urging businesses, artists, and universities to sever ties with Israel, they are using nonviolent means to oppose unjust policies toward Palestinians. Israel says the movement masks its motives to delegitimize and destroy the Jewish state.

The attempted boycott has been a thorn in Unilever’s side for over a year.

In July 2021, after Israel’s war with Gaza terrorists and a heavy social media campaign against the company, Ben Jerry’s announced a boycott of “occupied Palestinian territory.” The decision sparked heavy repercussions for Unilever, as US states enacted anti-BDS divestment laws, pulling hundreds of millions of dollars in investments from the conglomerate.

Israeli franchise owner Avi Zinger and his company refused to comply with the settlement boycott, arguing it was illegal under Israeli and US law. Their license to sell the ice cream was only set to expire at the end of 2022, meaning the boycott never came into effect.

Ben Jerry’s Israel sued Unilever over the dispute in the US in March, claiming Unilever unlawfully terminated their business contract. Months later, Unilever settled with Ben Jerry’s Israel, granting the Israeli branch independence to sell its products indefinitely in Israel and the West Bank, using Hebrew and Arabic branding. Under the agreement, Ben Jerry’s has no authority over the Israeli franchise.

Shortly after that agreement was announced, Ben Jerry’s sought to block the deal by suing Conopco, the main US branch of Unilever, in US federal court, arguing that Unilever breached its acquisition deal with Ben Jerry’s.

The Jewish founders of Ben Jerry’s, who no longer run the company, have said Unilever “usurped their authority” by spinning off the Israel branch.

The case has illustrated the pitfalls of progressive corporate activism, the risks for companies attempting to boycott Israel and the growing role of corporate investing in the Israeli-Palestinian dispute in the US.

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