Dispute over reusable straw sparks lawsuit
A collapsible, 9-inch drinking straw is the unlikely fulcrum in a contentious District Court lawsuit.
A Santa Fe woman filed the complaint last week against her former business partner, claiming he double-crossed her to start a rival company while holding her company’s intellectual property — namely, a reusable, stainless steel-and-silicon straw — hostage in order to negotiate a cash buyout.
The much-publicized FinalStraw fits on a key ring and comes with a lifetime warranty — as well as a slick and humorous advertising campaign that features a mermaid who says: “If you’re gonna suck, suck on this.”
But plaintiff Emma Cohen contends in her complaint, filed in First Judicial District Court last week, that former partner Miles Pepper, who co-founded The Final Co. LLC with her in 2017 to invent environmentally friendly, reusable products, has not acted responsibly.
Among other charges, she claims Pepper “sought to choke the Company into submission to his buyout demands by refusing to provide his financial information to allow the Company to secure a line of credit.” He also canceled the company’s credit cards and refused to give Cohen administrator credentials for the company’s various web domains and website service accounts, the court document says.
According to the lawsuit, Pepper began stepping away from the company in late 2018. Cohen became suspicious when she opened Pepper’s company email and discovered he was starting a new company — Good Ocean — to compete with Final Co., the complaint states.
Another defendant named in the case, Jordi Hays, who was employed by Final Co.’s outside marketing firm, joined Pepper in starting Good Ocean. Hays and Pepper then worked to use Cohen’s idea for a new system of sustainable replacements for single-use plastic items. It was a proposal she shared with Pepper and others at Final Co. in confidentiality, the complaint says.
All of this played out against a backdrop of the sale of Chinese knock-offs of the FinalStraw concept, which cost Final Co. some $5 million in revenue, according to the lawsuit. Cohen’s complaint says the FinalStraw — which was featured on the business-driven reality television show Shark Tank last year — racked up $4.8 million in sales in 2018.
The lawsuit comes as various media sources report that more environmentally conscious entrepreneurs are trying to develop sustainable alternatives to plastic products.
A variety of studies say most plastic products are not recyclable and are causing problems for the environment. A 2018 National Geographic report said 18 billion pounds of plastic waste makes its way into the world’s oceans every year.
Among other requests, Cohen’s lawsuit is asking for damages suffered by her company in an amount to be determined at trial, plus legal expenses and a ruling in favor of Final Co. in terms of who owns documents, papers and intellectual property rights.
She also wants Pepper and Hays to “cease all use and disclosure of Final Co.”
Santa Fe attorney Ben Allison, who is representing Cohen, said Tuesday his client worked in pollution prevention for Los Alamos National Laboratory and brought that expertise to the company.
“In New Mexico, owners of a company have a duty to treat the company and their co-owners fairly, and not harm the company or pilfer it,” he said. “Ms. Cohen intends to fight for the survival of this important company and what it stands for — which is to reduce the world’s consumption of single-use plastic.”
Attempts to reach Pepper, Hays and Good Ocean for comment were unsuccessful.