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

Parent company says ice cream maker’s ‘insistence on taking sides in the Israeli-Palestinian conflict’ is untenable, argues it has no authority to file lawsuit

Luke Tress is a JTA reporter and a former editor and reporter in New York for The Times of Israel.

Pro-Israel demonstrators protest against Ben & Jerry's over its boycott of the West Bank, and against antisemitism, in Manhattan, New York City, on August 12, 2021 (Luke Tress/Flash90)
Pro-Israel demonstrators protest against Ben & Jerry's over its boycott of the West Bank, and against antisemitism, in Manhattan, New York City, on August 12, 2021 (Luke Tress/Flash90)

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.”

Ice cream containers at the Ben & Jerry’s factory near Kiryat Malachi, on July 21, 2021. (Flash90)

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 & 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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