Texas Family Ranch Wins $1.825 Million in Punitive Damages in Fraud
HeartBrand Beef Inc. praised Judge Gregg Costa's order confirming a jury award of $1.825 million in punitive damages against Bill Koch's Colorado-based Bear Ranch, finding it fraudulently obtained hundreds of full-blood Akaushi cattle once held by the family-owned Texas company.
Judge Costa also ruled that Bear Ranch must sell back those cattle and hundreds more that Koch's Bear Ranch acquired, ensuring that HeartBrand, not Bear Ranch, can realize their full market value.
Judge Costa issued his ruling more than a year after a federal jury in Victoria, Texas, found that Bear Ranch breached its contract with HeartBrand, fraudulently purchased Akaushi cattle from HeartBrand Chairman Ronald Beeman, and was unjustly enriched by that purchase.
"We are pleased with Judge Costa's opinion and look forward to returning our focus to growing our business," Beeman said. "We are a family-owned business that went up against the deep pockets of a well-known billionaire who did not honor his contractual commitments and thought he was above the law. Justice finally prevailed."
Koch's Bear Ranch purchased Akaushi cattle from HeartBrand in 2010 and from Beeman in 2011, growing its herd to about 4,000. Bear Ranch agreed to meet the high standards that HeartBrand requires of its producers as to both purchases, yet sued HeartBrand in 2012, claiming the contract was anti-competitive and illegal. HeartBrand countersued, claiming that Bear Ranch breached its contractual obligations as to the original purchase and then misled HeartBrand into approving the subsequent purchase from Beeman. The federal jury decided in favor of HeartBrand on May 29, 2014.
"Bill Koch has negotiated many contracts over the course of his life and was fully aware of his commitments and the standards by which our company operates," said Beeman. "We are convinced Mr. Koch had no intention of honoring our deal. He simply used the deal to obtain what he has deemed 'the best quality beef in the world'."
HeartBrand, based in Flatonia, Texas, owns the largest group of full blood Akaushi cattle outside of Japan. Akaushi is one of the four indigenous Japanese breeds of cattle. The Japanese are very protective of those cattle, which Japan treats as a national treasure, and make the export of Akaushi beef virtually impossible. As a result of a loophole in the Trade Act of 1992 between the United States and Japan, which has since been closed, a group of 11 Akaushi cattle was brought to Texas in 1994. HeartBrand has carefully and diligently maintained the genetic purity of its herd and built the Akaushi breed in the United States to about 14,000 cattle over the past 10 years.
HeartBrand and the American Akaushi Association require HeartBrand-contracted producers to meet standards similar to their Japanese counterparts in order to ensure equally high quality beef. Using the deep pockets of its sole owner, Bill Koch, Bear Ranch tried to evade these standards and its contractual commitments with HeartBrand.
HeartBrand produces meat under rigorous quality guidelines and certified product testing that provides consumers the healthiest and highest-quality natural Akaushi beef.
HeartBrand's Akaushi beef is available at restaurants, fine grocery stores and for sale online at http://www.heartbrandbeef.com/.
Source: HeartBrand Beef Inc.
