March 26 (Reuters) - Unilever ( UL ) and its recently spun-off Magnum ice cream unit were sued for defamation on Thursday by Anuradha Mittal, who was ousted in December as chair of Ben & Jerry's ( UL ) independent board, saying the companies vilified and discredited her for supporting Palestinian rights.

The lawsuit escalates a years-long dispute over what Ben & Jerry's ( UL ) and its board say were Unilever's efforts to undermine their autonomy and the brand's social mission, including by removing former Ben & Jerry's Chief Executive Dave Stever.

In separate statements, spokespeople for Unilever ( UL ) and Magnum called Mittal's claims "unfounded," and said they were confident the legal process would bear this out.

Mittal said in her complaint that her support for Palestinian rights and a ceasefire in Gaza "rankled" Unilever ( UL ), with the acrimony escalating after Unilever ( UL ) announced the Magnum spinoff in March 2024.

She said the defamation included claims she engaged in self-dealing, received improper benefits, diverted funds from the nonprofit Ben & Jerry's Foundation, created a toxic work environment, and was unfit to remain board chair following internal investigations.

"Defendants achieved their goal of thoroughly humiliating and discrediting Ms. Mittal," harming her reputation and causing depression and chronic insomnia, according to the complaint filed in the federal court in Oakland, California.

Unilever ( UL ) retained a 19.9% stake in Magnum following the December spinoff. Magnum brands also include Breyers, Klondike and Wall's.

FOUR-DECADE RELATIONSHIP UNRAVELED

Mittal is seeking unspecified compensatory and punitive damages. She said Unilever ( UL ) and Magnum acted with "actual malice," meaning they knew their statements were false or had reckless disregard for their truth.

Raised in Kanpur, India, Mittal is the founder and executive director of the Oakland Institute, a think tank focused on the rights of farmers, forest dwellers, indigenous communities and pastoralists.

Ben & Jerry's ( UL ) has had a socially conscious mission since its 1978 founding by Ben Cohen and Jerry Greenfield, and was acquired by Unilever ( UL ) in 2000.

The relationship began unraveling in 2021 when Ben & Jerry's ( UL ) said it would stop selling ice cream in the Israeli-occupied West Bank.

Ben & Jerry's ( UL ) sued Unilever ( UL ) in November 2024 to stop alleged efforts to dismantle its board and end its progressive social activism, which has also included attempts to criticize U.S. President Donald Trump.

That lawsuit remains pending, and the Ben & Jerry's Foundation obtained court permission last week to join as a plaintiff.

Magnum has called that litigation "regrettable" and said it was committed to supporting Ben & Jerry's ( UL ).