Weeks after Mike Hallatt's headline-grabbing win in a Washington State court, it's business as usual or rather, un-usual for the Canadian pirate.
For the past two years, Hallatt has purchased products at Trader Joe's and brazenly brought them back into Canada to resell them at his tiny Kitsilano shop, Pirate Joe's.
Trader Joe's has 390 stores in the US, including 14 in Washington, but no presence in Canada.
Washington State judge Marsha Pechman dismissed Trader Joe's suit on Oct. 4, ruling that the company's trademark infringement, customer competition and deception arguments were unsuccessful, and that there was no basis to apply a broad-jurisdictional US law known as the Lanham Act. Yet Trader Joe's best customer remains blacklisted.
It was extensively reported how Hallatt, on the surface, was incurring the ire of Trader Joe's. What of his tactics and strategy, though? Or the implications of staring down one of America's most popular grocery chains in court and winning. What is the reality of being sued by your biggest supplier?
We went for an adrenaline-filled ride-along via cellphone on a typical day with Pirate Joe, and discovered that the affable Hallatt, a Canadian citizen with permanent US alien status, sells his used groceries to deprived Canadians on principle, and to satisfy the gingersnap cookie-craving customers he has come to love.
Hallatt's north-of-the-border community is close-knit: Unusual requests are fulfilled on a case-by-case basis. He has one customer who calls before coming, just to make sure he has low-cal lemonade in stock. Others bring him jazz records to spin on the turntable in the window. Sales are sometimes made right out of the grocery bags.
South of the border is just as connected: Since the ban, he has employed 20 philosophically aligned American supporters he found through Craigslist ads, seeking general day labourers to purchase the roughly $5,000 in inventory each week.
A typical trip involves crossing the border and spending the night at a shopper's house to get an early start the next day.
They then pick up the rest of the day's team and drive down the I5 corridor, sometimes heading over to the 405, hitting as many stores as time and capital allows.
His hired guns share heart-racing tales of dodging shirts – code for managers sporting the signature Hawaiian-print uniforms – and their pointed questions all the way to the parking lot.
But Trader Joe's managers are largely inconsistent in their enforcement of the Pirate Joe's ban, says S (name withheld), a brash twentysomething who has shopped for Hallatt since August.
Sometimes they aggressively question his quantities, other times S is in and out without incident, but he believes they always know what he is up to.
"Initially I was a little bit intimidated by it, but in reality, youre not doing anything wrong," adds new recruit K, a soft-spoken young woman who was craving a bit of excitement in her life. "You're just going in and buying some groceries. You happen to be purchasing quite a bit of groceries, but thats all youre doing."
It wasnt always like this; initially, Hallatt says he had the full support of the Bellingham store.
Today, a manager confronts him in a parking lot, asking if his haul is going to Canada. Hallatt counters that it's for his boat, and deftly puts the employee on the defensive.
The mind games are all par for his Dom Cobb-like extraction process, waiting outside the store to load his beat-up white van.
When the heat gets too high, he's been known to send in decoy taxis to pick up marooned buyers.
"Let's see if we can hit that store again," he says with authority, over his crackly American cellphone as he drives. "We're going back to a location we've already been to today," he explains. "We've never tried this before."
Business is up a third since the lawsuit, which is rooted in irony: A 1988 article in the LA Times championed Trader Joe's for similar gray market practices.
In 1985, Trader Joe's markets were selling bottles of imported Dom Perignon champagne for $33 each – about half the price found at many stores, the paper wrote.
The chain would buy the champagne on the gray market, where imported goods were available at prices that authorized American retailers often could not match.
"It was stupid to buy from official sources," Joe Coulombe, then-chairman of Trader Joe's, was quoted as saying. "We sold millions of dollars of stuff. It was the heyday of the gray market."
Spending an hour on the radio waves with Pirate Joe, one finds oneself waiting for him to seem half as crazy as his business plan. But all lights are blazing in Hallatt's madhouse – his shrewdness and razor-sharp wit lending a gentleman's decorum to the dance.
While perhaps his most novel concept, Pirate Joe's is not a fluke. At the age of 22, he raised $100,000 by going door to door to start Benny's Bagels. Years later, he got swept into cyberspace and successfully navigated the San Francisco tech rush of the '90s.
The day before our interview, he had been presenting to the next generation of privateers at the Sauder School of Business (a grim augury for any American retailer moving North at a glacial pace).
As for the lawsuit, the logic is lost on him.
"Trader Joe's has their reasons and the courts will sort it out. They're a business, not a person, so they should act like a business. Look at the landscape: legal and practical. They've set up a market in Canada they should service it, but they don't. So someone else will, period."
In the lead up to court, Hallatt says he attempted to come to a mutually agreeable, farmer-vs-fox arrangement.
He also explored acquiring some of the products directly from suppliers, but met with binding exclusivity agreements. So, he stayed the course.
For his part, the 53-year-old's legal fees were covered by insurance, leaving the father of two only $15,000 out of pocket.
Meanwhile, Trader Joe's public relations director Alison Mochizuki declined to comment on the likelihood of an appeal, nor on whether the company has any plans to enter the Canadian market.
According to the company, 40 per cent of customers who pay by credit card at its Bellingham location are non-US residents.
So, undeterred and enjoying the intimacy of small retail, the man with no plan is starting to diversify, bringing gluten-free bread products up from private bakers in Portland. And don't be surprised if his story ends up as a bestseller on every bookshelf but Trader Joe's.
"I'll close the day they open here. And if Trader Joe's prevails in [a higher US] court, I'll respect any decision. But if people are shaking my hand and I'm winning in court, how can I not be encouraged to keep going? It will take its course, but it will still be a grocery store with a story to tell."
