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Ruby Grapes sues Intercoastal Wine charging criminal pandemic profiteering.

A Livermore public warehouse/wine and beer wholesaler has sued its Lodi warehouse company in Federal District Court for the Northern District of California charging racketeering, state-of-emergency price gouging, fraud, and other charges.


The plaintiff, Ruby Grapes LLC alleges in its complaint (pdf premium) that Intercoastal Wine Company of Lodi increased storage rates by 1,250% on $7 million worth of wine after Ruby Grapes informed Intercoastal that it would be moving its wine from Intercoastal’s warehouse. The complaint states that Ruby Grapes has used Intercoastal Wine since 2018 to store approximately 70,000 gallons of wine for 8 cents per gallon.


California Secretary of State records indicate that Intercoastal is owned by Mitch and Rachele Spaletta of Stockton. Employee Erica Bettencourt was also named as a defendant in the Complaint. Intercoastal Wine’s California ABC licenses are currently a Type 17 and a Type 20 Off-Sale (Internet only) for beer and wine.


Ruby Grapes LLC is owned by Raindrop Investments whose CEO is Hakam Mission, CEO of Mission Trading Company, a large global supplier of auto parts. It is licensed by the California Department of Alcoholic Beverage Control (ABC) as a Type 14 Public Warehouse and Type 17 Beer and Wine Wholesaler.


Public documents do not support other articles and public announcements about the case that there is a winery involved with this case. There may be a Type 02 Winegrower license in transfer, but that is still under investigation by the ABC.


Pandemic profiteering alleged


The huge rate increase, Ruby Grapes alleges in its complaint, would violate California’s anti-price-gouging statute that prohibits raising the price by more than 10% of many categories of goods and services after an emergency has been declared. California Gov. Gavin Newsom declared a state of emergency on March 4, 2020, and Ruby Grapes informed Intercoastal of its intention to move “on or after June 1, according to the complaint.”


According to Ruby Grape’s complaint, on Friday, July 10, 2020, Intercoastal “provided Plaintiff with a 72-hour notice to either remove their wine or pay $0.50 per gallon, a 625% increase. Given the volume of Wine, Defendants knew that it would be practically impossible for Plaintiff to remove its wine within the 72-hour ultimatum. The notice further provided that Plaintiff could not remove its wine until all invoices were paid.”


The storage charges were soon thereafter increased to $1 per gallon: a 1,250% increase.


In addition to the storage increase, the Ruby Grapes complaint stated that Intercoastal, “willfully and intentionally damaged Plaintiff’s wine so that Plaintiff would no longer be a direct competitor of Defendants…..[a]fter Plaintiff provided notice that it would be moving its Wine, Defendants stopped properly storing Plaintiff’s wine.”


“Defendants agreed to and did conduct and participate in the enterprise’s affairs through a pattern of racketeering activity and for the unlawful purpose of intentionally defrauding and extorting monies from the plaintiff,” said the Ruby Grapes complaint.


Ruby Grapes is also charging unfair competition, unjust enrichment, civil conspiracy, and theft by conversion. Ruby Grapes is seeking damages to be determined at trial and an injunction to compel Intercoastal to properly treat wine in its possession.


The Federal Court has set a Case Management Statement deadline of October 28. The Initial Case Management Conference has been set for November 4 in Oakland.


Odd statements about change of ownership hint at sale of Lodi family winery

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