Minnesota Lawyer
The problem began when Reach entered the hand sanitizer market in early 2020, as the COVID-19 pandemic began. Newsert contracted with Reach to purchase millions of dollars of product in a timely delivery period. While the relationship began smoothly, deliveries became increasingly delayed. Ultimately, Newsert canceled the balance of their orders after multiple missed shipments.
“Much to our surprise,” Johnson remembers, Reach then sued Newsert for alleged breach of contract. Newsert countersued for their unreturned deposit. “A big question,” Johnson says, “was whether in a pandemic where all kinds of things are suddenly up in the air that never were before, do written contracts still count? Are people still held to their written promises?”
The case was messy, Johnson notes, with many email exchanges entered into evidence. “We tried to stay focused on the written contract and the understanding our clients had, based on the written contract,” he says. “That’s all you need to decide the case.”
Still, it was unclear whether a jury would forgive Reach’s failures in light of the pandemic. “It was an impossibility defense on their side,” Johnson says. “But ultimately, we persuaded a jury that the law does still apply even during a pandemic — particularly because the pandemic created the business opportunity to sell this product in the first place.”
The case is now in appeals, but Johnson and Knoll secured another victory while attempting to collect on the judgment. Reach had allegedly begun to transfer large sums of money to outside accounts.
“We got an order to freeze those accounts,” Johnson says. “It’s a very strong written order, and I think it’s likely to get cited again in the future.”
Read more about Minnesota Lawyer’s superb class of Attorneys of the Year for 2022 here.
