Before this summer, Collin Cox could probably not tell you a single thing about the nuances of at-home gel nail polish kits.
But today, he has about 200 bottles of gel polish sitting in his office at Yetter Coleman in downtown Houston. And as of Friday, he also has a $2.7 million jury verdict related to the nail polish bottles, which are defective.
Cox represents Benelux Cosmetics, a Netherlands-based distributor of cosmetics products. Last week, a Harris County jury determined Houston-based GHP Nail Systems and its parent company committed fraud against Benelux and breached a business agreement they entered in 2013 for Benelux to distribute GHP’s gel nail polish to retailers in Europe.
The verdict, reached on Friday evening by jurors in a 10-2 decision, marks a turning point in a nearly four-year legal battle regarding a business relationship that only lasted eight months.
Cox said he is “gratified” with the jury’s ruling, which it reached after hearing nine days of testimony that stretched into three weeks. The 11-woman, one-man jury deliberated for around two hours before delivering a verdict.
“The verdict pays our clients back for the four long years of litigation that GHP chose to initiate instead of working to solve the problems their product created,” Cox told The Texas Lawbook.
GHP indicated that it is not done fighting. “If a judgment is entered, our client will appeal it,” Robin Harrison, a partner in Hicks Thomas’ Houston office and GHP’s lead lawyer at trial, told The Texas Lawbook in an email.
GHP and Benelux entered their contract in September 2013, in which Benelux agreed to distribute GHP’s Haute Polish starter kits in Belgium, the Netherlands and Luxembourg. GHP designed the Haute Polish line for customers to enjoy easy at-home gel polish application with the use of a UV light.
Shortly after GHP’s gel nail polish hit the stores, customers began reporting serious problems: polish curing inside the bottles, empty bottles, strong smells and severe damage to customers’ nail beds after using the polish.
When Benelux reported the issues to GHP, Benelux argued at trial, GHP said their own testing indicated there were no issues with their products and suggested they derived from a user error.
The problems persisted, and Benelux terminated its relationship with GHP in 2015. GHP reacted by filing suit against Benelux in Harris County, alleging breach of contract, conversion and business disparagement since Benelux allegedly failed to pay for its product. The company later claimed Benelux misappropriated its trade secrets when it sold a different nail polish after terminating their contract.
Benelux countersued, arguing breach of contract and warranty, fraud and violations of the Texas consumer protection statute.
Key evidence presented at trial, Cox said, included internal GHP emails that proved its own employees knew there were issues with the product. Jurors also heard from the chief executive officers of both companies: GHP CEO Sean Mehta and Benelux CEO Vincent Lubbers, who testified through a translator in the courtroom.
“Houston is a very open place; we have jurors from all over the world, which is one of the reasons why I love practicing here,” Cox said. “But it was still unfamiliar for [Mr. Lubbers]. He had to trust the process, trust the evidence to tell the truth and rely on the collective wisdom of the jury. We think the jury did a great job.”
Other elements of international intrigue beyond what Lubbers and other foreign witnesses brought to the courtroom included evidence that spanned across multiple countries, including manufacturers in China and Italy.
Benelux hired Cox just four months before trial, so Yetter Coleman was not involved with the discovery process. But he said he was aware of the extensive work his predecessors at Blank Rome went through to build Benelux’s case, including the feared “H” word: the Hague Convention, which requires formal requests for document production in Europe to go through government authorities first.
“It takes a lot of time and is quite expensive,” he said.
Benelux also collected evidence from 13 different companies, including some in the U.S. that distributed GHP’s nail polish. Jurors learned that while GHP was talking about “the wonderful quality” of its gel nail polish, drugstores in the U.S. were instructing workers to “get it off their shelves,” Cox said.
“It was total recall kind of language, which was really powerful,” he said. “It was really instructive in what they (GHP) knew at the time and what they were not telling us.”
Throughout the litigation, Cox said GHP pressured Benelux to settle.
“They were demanding money all the way up until the jury began deliberating,” Cox said. “We felt good that if we had the full chance to tell our story, the jury would listen to all the evidence.”
“The jury listened carefully to the evidence… we are gratified that their verdict reflects not only the losses Benelux and Anviri [its parent company] suffered from the defective product during the short time the parties did business together,” he said, “but also assesses a penalty on GHP and Je Matidi, Inc. [GHP’s parent] for knowingly selling something that should not have been sold.”