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Where Art Tito and Blue Moon? June 4 Webinar

I am very pleased to announce that we will be joining with Chicago law firm Locke Lord to provide the following webinar. Simon and Tom have lots of experience representing consumer products companies in defending class action lawsuits. They have been closely involved with the wave of litigation that has descended upon the alcohol beverage industry in the past couple of years. Robert has worked with Simon and Tom on some of these cases in the past, and has more than 25 years of experience focused on how federal and state governments, and private plaintiffs, work together to affect alcohol beverage labels, formulas and marketing.


 

Locke Lord and Lehrman Beverage Law invite you to

Spirits Industry Under Fire

Webinar: Thursday, June 4, 2015
1:00 pm – 2:30 pm ET

 

 

Locke Lord and Lehrman Beverage Law invite brewers, distillers, and producers, distributors and retailers of beer, wine and spirits to a free webinar.


spacerLocke Lord Speakers
Thomas J. Cunningham
Partner
Chicago
T: 312-443-1731
Email

 

Simon A. Fleischmann
Partner
Chicago
T: 312-443-0462
Email
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Lehrman Beverage Law Speaker
Robert C. Lehrman
Principal Attorney
Washington, DC
T: 202-449-3739
Email

What to Expect:

Tom Cunningham, Simon Fleischmann and Robert Lehrman will describe the current wave of litigation hitting the beer, wine and spirits industry, including the cases against Tito’s Vodka and others. They will discuss and provide information about:

  • What these class action lawsuits are about
  • Why they were filed
  • How the courts are dealing with them
  • What they mean for beer, wine and spirits industry players who have not been sued yet
  • Who is a likely target for future lawsuits
  • What companies can do to minimize the likelihood of being sued

The program will run approximately 75 minutes with 15 minutes set aside for questions and answers. If you would like to attend this free program, please register below.

This program is pending approval for 1.0 hour MCLE credit. Please specify the state from which you would like to receive credit when registering.


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A Great Day for Maker’s Mark. A Good Day for Tito(?)

domino

Whoa! The first of the “handmade” cases wrapped up within the past week. On May 1, 2015 the U.S. District Court in Tallahassee dismissed the class action lawsuit against Maker’s Mark “with prejudice.” The now-defunct case alleged that Beam Suntory was bs’ing about whether the bourbon was “handmade.” The court seems to be saying “handmade” is a puff term, like “delicious.”

The term at issue has been amorphous, over the centuries, and Judge Hinkle seems to have dumped that burden on the plaintiffs:

the plaintiffs have been unable to articulate a consistent, plausible explanation of what they understood ‘handmade’ to mean in this context. This is understandable; nobody could believe a bourbon marketed this widely at this volume is made entirely or predominantly by hand. This order grants the defendant’s motion to dismiss for failure to state a claim on which relief can be granted.

The Judge makes a good point, saying:

But the term ‘handmade’ is no longer used in that sense. The same dictionary now gives a circular definition:  ‘handmade’ means ‘[m]ade by hand.’ Id. But the term obviously cannot be used literally to describe bourbon. One can knit a sweater by hand, but one cannot make bourbon by hand. Or at least, one cannot make bourbon by hand at the volume required for a nationally marketed brand like Maker’s Mark. No reasonable consumer could believe otherwise.

In sum, no reasonable person would understand “handmade” in this context to mean literally made by hand. No reasonable person would understand “handmade” in this context to mean substantial equipment was not used. If “handmade” means only made from scratch, or in small units, or in a carefully monitored process, then the plaintiffs have alleged no facts plausibly suggesting the statement is untrue. If “handmade” is understood to mean something else—some ill-defined effort to glom onto a trend toward products like craft beer—the statement is the kind of puffery that cannot support claims of this kind.

Another Maker’s Mark case is still pending, but darned if Judge Hinkle does not shoot a hole through its heart. The result here is refreshing in that I have rarely seen an important court case move so quickly. I suspect most observers expected this to grind on longer than it takes to make the very best Bourbon.

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Not The Onion. California Man, “Beer Aficionado,” Alleges He is Last to Know Blue Moon is Coors and Not a Real Craft Beer. Sues.

blast

Yet another lawsuit about beverage labeling. This time it’s Blue Moon beer. The class action lawsuit (Parent v. MillerCoors LLC) was filed April 24, 2015 in state court, in San Diego. It alleges that MillerCoors is tricking consumers about whether Blue Moon is craft beer.

blueThere are now literally dozens of class action lawsuits, filed all around the country in just the past couple of years, in state and federal courts, against many of the most popular beer and spirits products in the country. Wine is notably absent, so far.

The complaint alleges that MillerCoors:

  1. makes more than 2.4 billion gallons of beer a year — about 12 times what the prevailing Brewers Association definition, for a craft brewer, allows
  2. falsely portrays the product as “artfully crafted,” when in fact it’s a macrobrew
  3. hides the MillerCoors affiliation under various fake entities
  4. misleads consumers into paying up to 50% more, via omissions and misrepresentations

For good measure, the suit alleges:

Defendant’s business practices are immoral, unethical, oppressive, and unscrupulous, and cause substantial injury to consumers, including Plaintiff and the other members of the Class. As a direct and proximate result of Defendant’s unlawful business practices, Class members suffered injury in that they paid a premium price for a product that would not ordinarily command a premium price, or purchased a product they otherwise would not have purchased, absent Defendant’s misrepresentations and omissions.

bmooNotice that the lawsuit does not really mention labeling, and instead focuses on “false and deceptive marketing.” Notice also that the labels at issue don’t mention “craft.” TTB has approved the Blue Moon labels something like 300 times since the 1995 brand launch. Here is one of the very few Blue Moon labels that actually mentions “craft” as in “artfully crafted.” It’s a bit strange that the slogan would be rampant in advertising but barely there on labels. Sometimes TTB’s beer reviewer is a bit on the strict side, but here the government has been fairly lax. In fact, in the early days, Coors described this U.S.-made beer as “Belgian” rather than “Belgian-Style.” The real Belgian beer companies put this to a stop with another lawsuit.

Plaintiff is remarkably astute about when he purchased Blue Moon, and the BA parameters, but had a weak spot in his discernment, even when his friends tried to give him a clue:

From 2011 until mid-2012, Plaintiff frequently purchased Blue Moon beer… . Relying on its advertising, its placement among other craft beers, and the premium price it commanded, Plaintiff, who is also a beer aficionado and home brewer, purchased Blue Moon believing it was a craft beer, as the term is commonly used by beer consumers and the Brewers Association. [Eventually] Plaintiff was informed by friends that Blue Moon is not a craft beer, but rather a mass produced beer made by MillerCoors. Plaintiff was initially skeptical, but eventually verified the facts through his own research. As a result, Plaintiff has not purchased Blue Moon since approximately July 2012.

No word yet about whether Plaintiff has switched to Shock Top.

The tide is rising:  Tito’s, Templeton, Breckenridge, Maker’s Mark, Jim Beam, Beck’s, Budweiser, Lime-A-Rita, Kirin, Skinnygirl, Tincup, Angel’s Envy, WhistlePig, and now Blue Moon. Google says Blue Moons come around every 2.7 years, but the suits are starting to pour in at a far faster rate.

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Bad Medicine, Good Disclaimer

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There should be no doubt that a solid disclaimer can help make your label ok. And if there was, the Bad Medicine brand of spirits should put it to rest. In at least two places, the Bad Medicine labels say “The name Bad Medicine does not refer to any claimed health benefits.”

Not so long ago, it would be unthinkable that TTB would allow “medicine” or “health” talk — outside the mandated Government Warning. But the case law keeps changing, and so do the labels, along with it.

What other disclaimers are out there (beer, wine, spirits) and what ones should be?

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Very Possibly, Your Approved Label is Wrong

bevmasterFrom the demise of Prohibition until about a year ago, you could fairly safely assume your label was right, if it was approved by TTB. Most people assumed they had a “safe harbor,” created upon approval, even if some of the claims were dubious.

This has been changing, and fast. The causes are numerous. One big one is the Pom case, decided in mid-2014. Another is an onslaught of class action lawsuits (such as Tito’s, Makers Mark, Beam, Angel’s Envy, Templeton). I am not discussing these factors in detail in this post because we have covered them a lot in many other blog posts, readily findable. A third factor is the rise of whiskey. The whiskey rules are quite a bit more complicated than those for other leading categories such as vodka.

The details about this trend are set out in the April-May 2015 issue of Beverage Master – Craft Spirits & Brew Magazine. The article is entitled, Why Your Whiskey Label is Probably Wrong.

Some people don’t like hearing this message and think it sounds a tad alarmist. But for every one of those people, there are experts who understand this confluence of circumstances can take your company down (and perhaps some who are eager to do so). On a less somber note, the article explains some easy ways to tamp down the threats presented.

Label Audits

And here is something else you can do to push these threats away from your business. Get your labels audited. In response to the markedly changed situation, we are pleased to announce our 2015 label audit program. The details are here.

The list of labels deemed ok and approved, and then not ok, grows longer every day (Skinnygirl, Black Death Vodka, Palcohol, etc.). Wouldn’t it be nice to stay off that list? You should think about having a knowledgeable person review your labels, before this chap (Thomas Zimmerman, the man behind many of the lawsuits) does it for you.

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