The California-based company that has gained a cult-like following due to the popularity based around its Sriracha sauce has filed a lawsuit against chili pepper producer, Underwood Ranches.
On Sept. 5, Huy Fong moved forward with a lawsuit against Underwood Ranches, alleging they are refusing to pay over $1.4 million in overpayments, in addition to alleging Underwood Ranches is refusing to return over $7 million of Huy Fong’s equipment.
Underwood Ranches has provided Huy Fong Foods with its chili peppers for the past 30 years.
The suit says that from 2008 to 2016, the Sriracha makers paid over $190 million and made pre-payments to Underwood Ranches. Until 2016, the chili pepper providers always returned any overpayments to Huy Fong.
However, that year, Huy Fong says Underwood Ranches withheld $1.4 million. They have also held on to $7 million worth of equipment, provided to them by Huy Fong. “Underwood is holding Huy Fong’s equipment hostage, severely impacting Huy Fong’s ability to complete the 2017 harvest and greatly increasing the expense associated with the harvest,” the suit says. Underwood has also refused previous requests to return the $1.4 million overpayment.
This isn’t the first time Huy Fong Foods has faced legal trouble. In 2014, it was on the opposite end of a lawsuit after residents of the city of Irwindale, Calf., where the Sriracha factory is located, complained of burning eyes, irritated throats, and headaches caused by hot sauce production. But, fears that this would lead to a Sriracha shortage were overblown, and the suit was dropped.