Diddy Settles Racism Lawsuit Against Diageo Over Tequila Partnership

Sean “Diddy” Combs and alcohol giant Diageo reached a settlement Tuesday to resolve a lawsuit over their soured tequila partnership, ending a bitter legal battle that saw the embattled hip-hop star and mogul accuse the company of racism.

Combs, who is now facing multiple sexual assault lawsuits, claimed in the lawsuit that Diageo had breached their agreement by failing to adequately support his DeLeón brand of tequila. In doing so, he accused Diageo of treating his product line “worse than others because he is Black.”

The detailed terms of Tuesday’s settlement were not disclosed, but Diageo and Combs said in a joint statement that the agreement would leave the two with “no ongoing business relationship,” removing Combs from any further involvement in not just DeLeón but also the company’s popular Cîroc vodka.

“Sean Combs and Diageo have now agreed to resolve all disputes between them,” the two sides said in a joint statement. “Mr. Combs has withdrawn all of his allegations about Diageo and will voluntarily dismiss his lawsuits against Diageo with prejudice.”

The abrupt settlement with Diageo came as Combs is facing multiple accusations of sexual assault. After he quickly settled a rape lawsuit filed in November by longtime romantic partner Cassie, he was then quickly sued again by three different times by three different women over similar allegations. Diddy has strongly denied all such accusations and vowed to clear his name in court.

Before any of those allegations came to light, Combs sued Diageo in May, claiming the company breached his partnership deal for DeLeón. But he also went a lot further than that, claiming Diageo had “typecast” the tequila as a “Black brand” that could only be sold to “urban” consumers, harming its sales and leaving it lagging behind competing Diageo brands like Casamigos and Don Julio.

“Cloaking itself in the language of diversity and equality is good for Diageo’s business, but it is a lie,” Combs’ lawyers wrote. “While Diageo may conspicuously include images of its Black partners in advertising materials and press releases, its words only provide the illusion of inclusion.”

Diageo responded a month later, calling the lawsuit a “bad faith, sham action” filed by a star who had “amassed nearly one billion dollars” from their partnership but now wanted to “extract” billions more.

“These allegations are nothing more than opportunistic attempts to garner press attention and distract the court from the fact that plaintiff’s breach-of-contract claim is entirely without merit,” the company’s attorneys wrote. “Diageo categorically denies these accusations.”

Diageo demanded that the case be sent to private arbitration, citing a provision in Diddy’s partnership contract that they said required such disputes be handled out of court. The company argued that, if Diddy’s “inflammatory rhetoric” about racism was removed, the case was nothing more than a “garden variety” business dispute that must be arbitrated. But in September, the judge overseeing the case rejected that argument, meaning the case would have moved forward in state court, with the trial open to the public.