Case 1:14-cv-00683-ODE Document 1-2 Filed 03/07/14 Page 1 of 18

EXHIBIT 2

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

PRIVATE LABEL
NEUTRACEUTICALS, LLC,

)
)
)
Plaintiff,
)
)
v.
)
)
HANGOVER JOES HOLDING )
CORPORATION and
)
HANGOVER JOES, INC.,
)
)
Defendants.
)
______________________________ )

CIVIL ACTION NO:

______________________________

DECLARATION OF THERESIA M. MOSER

1.

My name is Theresia M. Moser. I have personal knowledge of the

facts set forth in this declaration and know them to be true and correct. I am over
the age of eighteen and am legally competent to provide this sworn declaration.
2.

I am outside counsel for Hangover Joes Holding Corporation and

Hangover Joes, Inc. (Defendants), the defendants in the matter Private Label
Neutraceuticals, LLC v. Hangover Joes Holding Corporation, et al., previously
pending in the State Court of Gwinnett County, Georgia, Civil Action No. 14-C-

Case 1:14-cv-00683-ODE Document 1-2 Filed 03/07/14 Page 3 of 18

00658-6 (the Action), which has now been removed to this Court.

I am

providing this declaration in support of Defendants Notice of Removal.

3.

After graduating from Emory University Law School in 1995 (with

special distinction) and working as a judicial clerk for Judge Julie Carnes of the
United States District Court for the Northern District of Georgia, I spent fifteen
years as an attorney at the law firm of Jones Day, where I rose to the level of
partner. In January 2010, together with other attorneys formerly from Jones Day
and Ford & Harrison, I formed the national law firm now known as Meyer Moser
Lang LLP. During my legal career, I have represented companies of all sizes in
numerous business disputes.
4.

Although the parties dispute in this Action dates back to 2012,

documentation reflects that Defendants first threatened legal action against

Plaintiff on or about February 8, 2013.

A true and correct copy of this

documentation is attached to this declaration as Exhibit A. In my experience, a

business of the size Plaintiff purports to be on its website would certainly forward
such a demand letter to its attorneys for notice, review, and legal advice.
5.

Documentation also establishes that since February 2013, both

Plaintiff and Defendants exchanged additional information regarding their

respective claims for damages, including through emails to and from Plaintiffs
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owner and CEO, Bjarte Rene, among others. A true and correct example of such
correspondence is attached to this declaration as Exhibit B.
6.

In addition to the communications attached to this declaration, there

are hundreds of pages of other communications between the parties establishing a

complex record of the nature of the dispute and damages in this Action.
7.

Documents reflect that counsel for Plaintiff, David Allen Roberts,

served a formal demand letter on Defendants on November 5, 2013. A true and

correct copy of this demand letter is attached to this declaration as Exhibit C.
8.

The biography posted on the Hall, Arbery, Gilligan, Roberts &

Shanlever LLP website states that Mr. Roberts is an experienced and

accomplished employment litigation attorney with over 18 years of private
practice experience and has worked for some of the largest and most prestigious
law firms, including Greenberg Traurig, Fisher Phillips, LLP, and Seyfarth
Shaw.1
9.

This Action followed Plaintiffs November 5, 2013 demand letter with

preparation of a complaint including numerous supporting exhibits.

10.

In order to fulfill the obligations imposed on attorneys by Rule 11(b)

of the Federal Rules of Civil Procedure, a pre-litigation review of the Actions

1

Mr. Robertss biography is available at

http://hagllp.com/professionals/roberts.php, last accessed March 7, 2014.
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facts and legal contentions would include a review of the correspondence between
the parties, review of applicable payment records, client and witness interviews, an
analysis of the potential causes of action and damages claims, and research into the
sufficiency of such claims under existing law. This work would take at least 18
hours. Drafting the demand letter, pleading and compiling the exhibits filed in this
Action would take at least an additional 12 hours.

Client updates and

communications throughout the process would take at least 6 hours. Together, at a

minimum, Plaintiffs counsel would have worked at least 36 hours on this case
prior to the date on which Defendants filed their Notice of Removal.
11.

My typical hourly rate for work of the nature described in paragraph

10 is $575 an hour. This rate is consistent with that charged by other attorneys
with similar experience and practice areas who are located in this region. Mr.
Roberts and I have comparable experience and backgrounds. Using the $575
hourly rate and 36 hours, Plaintiff would have incurred at least $20,700 in legal
fees prior to the date on which Defendants filed their Notice of Removal.
12.

Betsy Bulat Turner, co-counsel for Defendants and an associate on my

team, has five years of private practice experience and two years as a judicial clerk
for Magistrate Judge E. Clayton Scofield III in the Northern District of Georgia.
Her typical hourly rate for work of the nature described in paragraph 10 is $350 per
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hour. Based on my experience, this rate is consistent with that charged by other
attorneys with comparable experience and practice areas who are located in this
region. Mr. Robertss co-counsel in this Action, Jonathan Letzring, according to
the biography posted on the Hall, Arbery, Gilligan, Roberts & Shanlever LLP
website, has approximately 10 years total experience as an attorney in private
practice and as a judicial clerk, more than Ms. Bulat Turner.2 Applying a rate of
$350 per hour to 36 hours of work (which is likely lower than Mr. Letzrings
hourly rate), legal fees would amount to $12,600.
13.

Accordingly, based on 36 hours of time that, in my experience, would

have been the minimum needed to review the facts and legal claims to satisfy Rule
11, properly advise a client, and prepare correspondence and documents for filing,
the minimum reasonable range of attorneys fees expended prior to the date on
which Defendants filed their Notice of Removal would be $12,600-$20,700.
14.

By my signature below, I state under penalty of perjury that the facts

set forth in this declaration of fourteen paragraphs are true and correct.

Theresia M. Moser
signed March 7, 2014
2

Mr. Letzrings biography is available at

http://hagllp.com/professionals/letzring.php, last accessed March 7, 2014.
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EXHIBIT A

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February 8,2013

Mr. Kevin Harden

Private Label Nutraceuticals, LLC
1900 Beaver Ridge Circle
Norcross, GA 30071
Mr. Jay Connaughton
Metaugus Inc.
3570 Lees Chapel Road
Cedartown, GA 30 I 25-5506

SENTVIA: E-mail & Certified Mail

RE: Cancellation of PO #50036
Dear Kevin & Jay,
Please accept this letter as cancellation of the above referenced purchase order we placed for 3,000 gallons of Hangover
Joe's Liquid. We were told the product would be ready for picked up last Wednesday which obviously did not take place.
We have inquired several times since last Wednesday to be given a firm date and time as to when the product will be

available and as of the writing of this letter we still have not been provided any.thing in writing confirming when the
product will be produced for us. As a result of these numerous delays in completing our purchase order, we are canceling
this order and moving forward with another manufacturer. Also, please immediately return the $5,000 down payment that
was wired to Private Label to secure production of this order.

I also need you to immediately live up to your promise to replace the defective product that your company
produced for our Australian customer. I have a call with them in a few minutes and I intend to tell them that if you do not
immediately deliver on your agreement to replace all of the defective product your company produced that they received,
I have no other choice but to turn this over to our attorneys to deal with this through the legal system as they deem
appropriate.
Kevin,

Gentlemen, I'm sorryz it has come to this in our business relationship, but your continued failures to correctly produce and
ship our product has resulted in significant monetary damages to our Company. We can no longer suffer the repeated
financial losses your actions are causing. Please let me have your response in writing by noon CST Monday as to when
our Australian distributor can take possession of properly manufactured product to replace all of the damaged goods you
produced and they received.

Sincerely,

Michael Jaynes
President & Chief Executive Officer
Hangover Joe's Inc.
9457 S. University Blvd I Suite 349 | Highlands Ranch, CO 80126 | office: 303-872-5939 | fax: 88*27+9892 | www.HangoverJoes.com

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EXHIBIT B

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PRIVILEGE REDACTION

From: Michael <mike@hangoverjoes.com>

Subject: Fwd: Cancellation of PO #50036 and Resolution of Australia defective product issue
Date: March 9, 2013 at 11:51:05 AM CST
To: "bjarte.rene@privatelabelnutra.com" <bjarte.rene@privatelabelnutra.com>
Cc: Mike Malm <Mmalmimage@aol.com>, "eric.skae@scoutbeverage.com Skae"
<eric.skae@scoutbeverage.com>, Bob Devers <rjdevers@msn.com>
Bjarte,
I am receiving a ton of pressure from our Australian distributor to get resolution of the issues concerning the
defective product that Private Label/Metaugus shipped them which I laid out for you in the email dated 3-4-13
below. They would really like to see this resolved in an amicable fashion with Kevin living up to the
commitments he made to them to correct this. Their patience is growing very thin and I anticipate they may file
suit against Hangover Joe's, Inc. very shortly if this isn't fixed. Obviously, if they sue Hangover Joe's, we will
have to file suit against against Private Label and Metaugus. Having not received a response from you to my
email, I wanted to reach out to you again to see what position you are going to take. I remain optimistic that we
can resolve this amicably with lawsuits having to be filed, but this has to be resolved immediately. I will look
forward to hearing back from you and hopefully getting this matter
Begin forwarded message:

From: Michael <mike@hangoverjoes.com>

Subject: Re: Cancellation of PO #50036 and Resolution of Australia defective product issue

Case 1:14-cv-00683-ODE Document 1-2 Filed 03/07/14 Page 11 of 18

Date: March 4, 2013 11:07:07 AM CST
To: Bjarte Rene <bjarte.rene@privatelabelnutra.com>
Cc: Mike Malm <mmalmimage@aol.com>, Bob Devers <rjdevers@msn.com>

Bjarte,
I've been swamped the last few days and apologize for just getting this response back to you.
You've asked that I email you back and set forth the issues we've had with the product produced
by Private Label and shipped to our Australian distributor and also why we cancelled the 3000
gallon bulk order. First, our records indicate an outstanding balance to PL of apx 47K not 100K
as you indicated. Below is what has transpired.
1. We ordered 20 pallets of 7200 bottles labeled for Australia (a shipping container) that PL said
would be produced and ready for shipment on July 1, 2012. The product was not ready for
shipment as promised. On July 25th our AU distributor had us send them 3 pallets of our US
product by air freight where they wouldn't be empty handed for a major trade show they had paid
to attend.
2. On August 9, 2012 the AU order was still not fully completed and ready to ship to our
distributor, so our AU distributor had us air freight them 5 pallets of the 20 pallets they were
expecting to already have received and they paid the air freight since they were so desperately
behind in supplying their customers. Again, PL was late in shipping, and the 5 pallets didn't ship
until Aug 23, 2012.
3. On Sept 4, 2012, given PL having said the remaining pallets due of the 20 pallet order were
ready, we shipped the container to the port to be put on a freighter to Australia.
4. On September 5th, our AU customer finally gets their 5 pallets and they notify us that PL had
not perforated the bottles and they could not be opened and as such could not be sold to their
customers. They documented this with photos and a video that was supplied to Kevin.
5. With it now being apparent that the product inside the container was going to be in the exact
same shape as the defective 5 pallets the AU distributor had just received, with Kevin's
agreement we (at our expense of apx. 5K) had the container recalled from the port before it was
loaded on the freighter and returned to PL where Kevin said they would re-sleeve the bottles
with perforations.
6. Again, because of the delays caused by PL and their desperate need for product, our AU
distributor has 3 pallets of AU product air freighted to them which Kevin said would be
perforated correctly. The order for the 3 pallets was around Sept 17, 2012 and it was not until
around Nov 17, 2012 that the AU distributor received them and they also were not perforated
and thus were defective and not able to be sold.
7. After waiting apx 2 months for the 3 pallets ordered around Sept 17, 2012, the AU distributor,
because they are still running so far behind on receiving the the correctly manufactured product
that was supposed to be shipped to them on July 1, 2012, have 5 more pallets of AU product air
freighted to them of their original 20 pallet order that Kevin said had been re-sleeved and he had
2

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personally inspected. When the 5 pallets were finally received by our AU distributor, they had
not been re-sleeved and perforated correctly, but rather were cut around the caps of the bottle
with some sort of hand tool in a non uniform fashion which Kevin ultimately admitted had
occurred. By now, 6 & 1/2 more pallets had been shipped by container to AU that were likewise
defective when received around January 2013.
8. At this point our AU distributor demanded a conference call with Kevin. Again, the distributor
sent photos and videos of the defective 6 & 1/2 defective pallets which were supplied to Kevin.
On this conference call Kevin admits that all the sleeving and perforating were both being done
by hand and they had no automation or a perfing tool on the line to do this efficiently. At this
point Kevin told us he had reached out to another local co-packer to hand this off to to get this
done effectively. He then told our AU distributor that he would immediately air freight them at
PL's expense, 5 correctly manufactured pallets and replace the balance of the 20 pallet container
with correctly manufactured product ASAP at PL's expense. To this date, this has not happened.
It should also be noted, our Australian distributor has advised us that the delay in them receiving their product
has cost them at least 100K in out of pocket expenses such as brand promotion, interest expense, 45K in air
freight expenses etc and they have lost substantial profits due to lost opportunity cost by being unable to sell in
their peak season. They lost the opportunity to sell during Christmas and New Years.

With regard to why the order for the bulk liquid order was cancelled, please note that the date we were told by
PL that it would be ready for us to have picked and shipped (as is stated on the PO) was 1PM Eastern Standard
Time on 1-29-2013. The product was not available at that time as promised, but we remained patient until Feb
8, 2013 when we had no other choice but to move forward with another manufacturer because we had deadlines
to meet with our customers and given PL's track record of not delivering on time, we could not wait any longer.
In addition to the problem with our AU distributor, please let me call to your attention these other issues that
were caused by PL that have been extremely costly and damaging to our company and brand with our US
customers. All of these orders were prepaid to Private Label.
1.) Coremark: Coremark ordered 10 pallets (5 to two different DCs) to be shipped in early November
for December holiday sales. Both orders were shipped by Private Label without the standard master
cases as required by Coremark. (Private Label has the Coremark standards and have been shipping
correctly for the previous 6 months.) Private Label also shipped inconsistent qtys not matching the
packing slips. The week of Thanksgiving, Coremark informed us of the shipping discrepancies and
refused to accept and process the orders. For the west coast shipments, our company had to find a
3rd party fulfillment company to pick up the product, repack and redeliver. Upon delivery, the product
was now too late to go our for holiday sales. The Arkansas shipment was not reshipped or
redelivered by PL for several weeks.
The value of these orders to us was apx $100,000. We lost all of the holiday sales which were
approximately this same amount.
2.) Harold Levinson: This distributor order was paid for the first week of Dec. The first order was for 1
pallet to be followed by several others. They were a new customer with 30,000 accounts. The order
was not shipped until the 2nd week of Jan and we had to give the customer a special discount to
accept the order. It cost us a minimum of 2 pallets in sales for the holiday season. They were going to
cancel our agreement because we had done a trade show for them and never shipped the orders
because of this delivery issue.
3

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3) A-1 Discount Distributing: They placed a PO right after the NACs show and Private Label didn't
ship for a month. By the time the order got to the distributor, they refused it. This was 2 pallets (over
$18,000)
4.) Republic National New Mexico: Ordered a pallet and shipped 6 weeks late. By the time it had
already arrived, we had spent several thousand dollars in the sales presentation without product
available. This cost us one pallet at $ 9,000
5.) Private Label shipped product in the US this year and used a wrong bottle (Mr Chow from
Canada) The product has a different UPC on it and will not ring the register with our accounts. We
sent notice to Private Label asking for the list of customers they shipped it to and they have not
answered the question. We are in jeopardy of chargebacks when the item won't go through the
register. Cost is still to be determined.
6.) In September of 2012 Private Label shipped our US product without perforations. They were
shipped to all customers and we found out at a trade show for Mclane and the Rodman conference.
7.) 2 pack program: All 2 packs were not glued and properly assembled by Private Label. The were
also packed into oversized boxes causing damage to all pieces shipped. The cost to us was delayed
shipments and charges from a third party company to re-pack all of the product.
Please review and let's discuss at your earliest convenience.
Michael

On Feb 26, 2013, at 6:31 PM, Bjarte Rene <bjarte.rene@privatelabelnutra.com> wrote:

Thanks, Michael! Looking forward to hearing from you.

Bjarte
On Tue, Feb 26, 2013 at 5:18 PM, Michael <mike@hangoverjoes.com> wrote:
Hi Bjarte,
Thank you for your email. I'm away from my office on business, but should be back tomorrow and can get you
a response.
4

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Regards,
Michael
Sent using Siri so expect an occasional misspelled or wrong word!
On Feb 25, 2013, at 5:59 PM, Bjarte Rene <bjarte.rene@privatelabelnutra.com> wrote:
Hi Michael,
Thank you for your email. If you don't mind, could you please detail in an email the issues about
the shipment to Australia as well as the issues that led HOJ to want to cancel the bulk order you
placed a deposit on on 1/29?
Looking forward to hearing from you.
Thanks,
Bjarte
On Mon, Feb 11, 2013 at 5:37 PM, Michael <mike@hangoverjoes.com> wrote:
Bjarte,
This is Michael Jaynes, CEO for Hangover Joe's, Inc. From the email I received from Shawna
Brown at Private Label today, I'm getting the feeling neither she or Kevin is keeping you in the
loop of how the relationship between of our companies is getting into crisis mode. Perhaps they
are, and my forwarding the following emails to you is a waste of your time, but if you haven't
seen these emails I thought you should. We would certainly like to resolve the issues before us in
an amicable fashion, but I'm getting no cooperation out of Kevin. Please feel free to contact me if
you would like to discuss a resolution before this matter escalates further. There will be 2 more
emails to follow FYI.
Sincerely,
Michael Jaynes
Begin forwarded message:

From: Hangover Joe's Get Up & Go <mike@hangoverjoes.com>

Subject: Cancellation of PO #50036 and Resolution of Australia defective product
issue
Date: February 8, 2013 5:53:52 PM CST
To: Kevin Harden <kevin.harden@privatelabelnutra.com>, Jay Connaughton
<jconnau@pstel.net>, Jay Connaughton <metaugus.jay@gmail.com>, Shawna Brown
<shawna.brown@privatelabelnutra.com>

Case 1:14-cv-00683-ODE Document 1-2 Filed 03/07/14 Page 15 of 18

Cc: Mike Malm <mmalmimage@aol.com>, Bob Devers <rjdevers@msn.com>, Shawn
<sales@hangoverjoes.com>

-____________________________
Private Label Nutraceuticals
1.888.240.4835 - office TOLL FREE
+1.678.328.3700 - office
+1.858.759.8690 - direct
+1.858.519.2008 - cell
Skype: bjarterene
www.PrivateLabelNutra.com
http://www.facebook.com/PrivateLabelNutraceuticals
PS: We also do FULFILLMENT and offer MERCHANT ACCOUNTS

-Right-click here to download pictures. To help protect y our priv acy , Outlook prev ented automatic download of this picture from the Internet.

____________________________
Private Label Nutraceuticals
1.888.240.4835 - office TOLL FREE
+1.678.328.3700 - office
+1.858.759.8690 - direct
+1.858.519.2008 - cell
Skype: bjarterene
www.PrivateLabelNutra.com
http://www.facebook.com/PrivateLabelNutraceuticals
PS: We also do FULFILLMENT and offer MERCHANT ACCOUNTS

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EXHIBIT C

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