Stock image.
Fort Lauderdale, FL— Jurors Wednesday found rapper Flo Rida entitled to more than $82.6 million in damages after concluding the maker of Celsius energy drinks breached an endorsement agreement with the entertainer. Strong Arm Productions USA, Inc., et al. v. Celsius Holdings, Inc., CACE21008997.
The 17th Circuit, Florida State Court jury, in Broward County, deliberated roughly six hours across two days before concluding that Celsius Holdings, Inc., breached a contract that required the company to issue stock shares to the rapper if sales benchmarks were achieved. The jury’s award is largely based on the number of shares it deemed Celsius owed Flo Rida under the contract’s terms, valued at roughly $110 a share.
Flo Rida, whose legal name is Tramar Dillard, is a multi-award-winning rapper known for hits such as “Low,” which topped the Billboard Hot 100 charts for 10 weeks in 2007. In 2014, Flo Rida entered an agreement with Celsius Holdings to endorse and promote the company’s energy drinks, including a variety of co-branded products.
Key to that agreement are provisions related to the issuance of stock shares as bonuses to the rapper in exchange for meeting sales benchmarks. Under one provision, the company agreed to issue shares if a revenue target on co-branded products was met in any 12-month period during the contract term. A second provision required the company to issue another set of shares to the rapper if the company sold a specified number of co-branded product “units.”
The trial focused on whether those benchmarks in the 2014 contract were reached and whether they continued to apply after the parties agreed to another contract two years later.
During Tuesday's closings, attorneys for both sides sparred over what constituted a “unit” for purposes of the unit-related benchmarks and what relevancy either of the 2014 benchmarks had in light of the 2016 agreement.
During his closing argument, Celsius’ attorney, Holland & Knight’s Jose Casal, argued that a “unit,” for purposes of the 2014 contract provision, included only co-branded boxes and cans of merchandise, and not individual-serving "sticks" of the product. Under that measure Casal said, the unit-specific benchmark was never met.
Meanwhile, Casal added that the 2016 agreement was never meant to include either of the 2014 stock benchmarks.
“Nowhere in the 2016 agreement are you going to see the words ‘This document extends the 2014 agreement. This document extends the benchmarks,’” Casal said. “That language is nowhere to be found.”
But Kelley | Uustal’s John Uustal, representing Flo Rida, argued that evidence, including communication between the parties, showed the 2016 agreement was couched as a “renewal,” extending the provisions of the 2014 agreement.
And he argued that the unit-related benchmark in that agreement included individual sticks of product because those single-serving portions served as a key part of the company’s strategy to expand its customer base.
“The decision to buy, the decision to try, it’s critical to building this company,” Uustal said. “You don’t get a loyal customer until they’ve already tried the drink and liked it.”
In a written statement after the verdict, Uustal expressed admiration for the jury’s resolution of a complex case. “[I]t’s amazing how detailed the jury verdict was, how they filled out a complicated and extensive jury verdict in such a way that made it clear beyond any doubt that they understood all the most difficult issues in the case, and resolved them.”
And in a written statement, Flo Rida added that the verdict gave him a “new respect” for courts.
“This was a long journey, but we prevailed,” he said. “From the start, I only wanted what I worked for, nothing more, nothing less.”
CVN has reached out to attorneys for Celsius and will update this article with their comments.
Email Arlin Crisco at acrisco@cvn.com.
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