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Sriracha maker loses lawsuit to his former jalapeno producer



Peppers are loaded from a truck to the factory as 300 sriracha fans tour Huy Fong Foods in Irwindale, CA.

Anne Cusack | Los Angeles Times | Getty Images

The creator of the Sriracha hot sauce lost its legal battle with its former jalapeno supplier after a California jury awarded the ginger culture $ 23.3 million on Wednesday.

For 28 years, Underwood Ranches gave Huy Fong Foods with the mature red jalapeno peppers that it needed for its Sriracha. But in 201

7, this relationship ended after the two failed to reach an agreement for the harvest that year.

Irwindale, California-based Huy Fong, initially initiated a lawsuit against his jalapeno provider in August 2017 and accused Underwood of not returning a $ 1.4 million overpayment from last season. Underwood responded with a countersuit claiming that Huy Fong violated the contract.

The jury awarded Underwood $ 10 million in immediate damage and $ 14.8 million to compensate for the two years of financial loss associated with the sudden dissolution of the employment. About $ 1.5 million was deducted for Huy Fong's 2016 overpayment.

"These losses were real, so we have much reason to settle, but it was so emotionally rewarding that all the jury members supported us unanimously," said Craig Underwood, owner of Underwood Ranches, in an interview.

Underwood said the company left half of its employees after the relationship with Huy Fong was sour.

Huy Fong did not respond to a CNBC comment.

While the divorce drama evolved in the courts, it also played on social media. After Underwood created his own series of hot sauces with peppers, the pepper culture spoke: "Without Underwood's pepper, it's just another spice."

Huy Fong has also used Twitter to talk about the lawsuit and said in March that "the truth will come out in the trial."


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