Unsafe Harbor

becksThere are something like 25 pending lawsuits, about whether various alcohol beverage labels are misleading.

Right there, that should tell you there is not much safe harbor, even though every one of those labels was federally approved, pre-market. Most of the labels were approved many times over many years.

Of course, the first refuge of every defendant is to argue that heavens no, the label can’t possibly be misleading, because the mighty TTB examined and approved it, after all.

The very recent Beck’s settlement should put this trite notion to rest. Over and over TTB said yeah the Beck’s label is fine, even though it has a bunch of references to Germany and the brand’s history, and even though the beer has been made in the U.S. for many years now. The court approved the settlement on October 20, 2015.

shIn my opinion, the harbor should not be any safer than the review is rigorous. To the extent TTB carefully focused on the specific issue in controversy, and ruled on it, according to rigorous standards, that would be a different story. But, by contrast, a quick review and a shot from the hip should not a safe harbor make. I don’t mean to be too critical of TTB or A-B. The same parties can also provide a good example of the very opposite phenomenon, where the review is more probing, and the harbor stood up as safe. The Lime-A-Rita case shows this other side of the coin. In the Lime-A-Rita case, the plaintiffs said the label is deceptive because it refers to (Bud) Light, when in fact the product is loaded with sweeteners and is no paragon of lightness. But A-B beat back this challenge, and rightly so, because in this instance TTB did have good, solid, narrow, relevant, rigorous standards, duly applied by TTB and duly complied with by A-B, and so eureka the many TTB approvals did in fact provide a warm and cozy safe harbor.

TTB has narrow, careful rules around many terms such as “straight,” “estate bottled,” chardonnay, Napa Valley, “Late Harvest.” Thus, these are the types of terms that should provide a safe harbor (when properly used and approved, according to the same rules). But, by contrast, TTB nor anyone else has good, solid, rigorous rules around terms such as craft, handmade, handcrafted, small batch, reserve, etc. — and so it is much less clear that a safe harbor should apply. It is true that the terms could be puff, in the absence of such rules, but who ever said it is either black or white, puff or not, all or nothing? Surely there are some terms somewhere in the middle, neither pure opinion nor hard fact. I do agree that many label terms do gravitate toward one pole or the other, and I do agree that such terms should be protected, as either puff or within a safe harbor. But we still need a good plan for the terms somewhere in the middle. Maybe TTB should develop and apply some rigorous rules on such. Or maybe the companies that want to use them should explain what they mean by them, to put them in a comprehensible context.

One more example should make the point. Templeton Rye, like Beck’s, Bass, Kirin and many others, also of course had TTB-approved labels. This did not stop the lawsuits or provide any safe harbor. If there were a safe harbor to be found, anywhere near these controversies, the defense lawyers certainly would have found it.

The Beck’s case underscores one other quandary. It is hard for me to understand how it can be a good, long-term business plan, to take the Beck’s brand, known for being German if nothing else, and blur the life out of it by making it elsewhere. The penalty within the lawsuit is something like $28 million, but the obliteration of the Beck’s identity seems far more expensive in the long term. A-B paid a couple billion dollars for the brand in 2012.  I can only assume it is short-term, quarter-to-quarter, propping up the numbers, Wall Street thinking, designed to enrich the near-term stakeholders, at the expense of those who arrive at the punch bowl later.



There are something like two dozen class action lawsuits floating around, against beer and spirits companies. Many are in the early stages. But information is starting to accumulate about the damages and fees at issue. For example, the Templeton Rye case is already settled, with about $750,000 in attorney fees going to the plaintiffs. The Maker’s Mark and Jim Beam cases are done, with nothing going to the plaintiffs. The Kirin beer case is wrapped up with $1 million in attorney fees going to the plaintiffs.

To get more visibility, about where all this may be headed, I looked beyond the alcohol beverage cases, to food labeling cases more generally. There are a lot of them. It turns out, there are so many, that they have provoked not only a blog, but also a study from The Brookings Institution, about a serious problem with a proliferation of suits about “natural,” “nutritious,” and “wholesome.” The Brookings study is of particular interest to me, not just due to the timely subject, but because I worked there briefly after college as a low level researcher. While researching for Stephen Hess, I sat with such (now) luminaries as Gary Mucciaroni and Robert Katzmann (when they were probably in their twenties).

Nicole Negowetti, a professor at Valparaiso University Law School, surveyed the situation in “Food Labeling Litigation: Exposing Gaps in the FDA’s Resources and Regulatory Authority,” published in 2014. She tracked down the damages as shown in the table below.


The Activia case in 2010 really got things going, with big damages. Between then and 2014, something like 150 or more similar cases got filed. She explains:

The majority of these cases have been filed in the U.S. District Court for the Northern District of California, now referred to as the “Food Court.” This surge in lawsuit filings has led some legal commentators to suggest that “food is replacing tobacco as the new regulatory and class action target.” This “unprecedented surge”of deceptive labeling and advertising lawsuits against the makers of products such as Naked Juice, Fruit Roll-Ups, Bear Naked Granola, and Wesson Oil, reveals a trend of regulation by litigation—that is, a turning over of food labeling issues to the courts in light of a lax regulatory system.

The government has been defanged so much that FDA has all but quit policing food labels. She points out that FDA can’t even or won’t even define “natural,” let alone enforce against most abuses. She also points out that, if you think rulemaking is expensive, wait until you see the cost of all these suits, passed along to you, dear consumer.

512 Posts

Vote here, y'all

A few weeks ago, with little to no fanfare, we passed the 500 posts milestone. It has been a wild and fun ride since late 2008. This blog is now up to 512 posts as of yesterday. Google tells me Bevlog has had 555,404 visitors and 832,024 pageviews so far, with an average of 44 seconds per session.

The most popular posts are Tito, Blue Moon and Palcohol (with 37,587, 36,183 and 17,022 views respectively in the past two years). I am not sure whether the blog has led directly to any particular revenue, but it has put me on e.g., The Today Show and CBS News, and I don’t imagine any other (legal) way to accomplish that.

Some of the posts are fun and easy, and take no more than a few moments (examples). Others, somehow, take hours and hours — even if they seem so simple beforehand. I am pleased to report that we’ve heard of no substantial inaccuracies so far, and we’ve had very few complaints. One big company oh so smoothly asked for a clarification. One multi-billion dollar organization demanded a change but settled for something approximating a change in punctuation. Along the way I met Tito, the Hatfields (and McCoys), and E-40. And now we are pleased to report we have been selected (from more than 2,000 nominations and tens of thousands of law blogs) as one of the best law blogs for 2015, by The Expert Institute. Please vote if you have not already.

Vote here, y'allWe don’t charge anything for this information. We don’t accept any advertising and we routinely turn it down. We do ask you to enjoy, comment, pass the word along — and if you think it’s really good, please consider voting for it here. We only have 27 scrawny votes as of this writing — and we are getting beat by “The Wedding Lawyer” of all people (at least we are beating the horse lawyer). My mom will be proud (if I don’t get beat by the Wedding Lawyer).

Finally, thanks for reading and please let us know any great topics or ideas to make the blog better in the coming years.

Fire Flask Fires Back at Fireball


Last month the firedragon on the right sued the firedevil on the left. This month, the devil fired back.

Sazerac at first alleged that the labeling on the left, for Stout’s beer-type product, is way too similar to Fireball’s appearance, as used for many years on its top-selling Fireball cinnamon whisky. Sazerac’s lawsuit is no big surprise because Sazerac is quite aggressive, Fireball has a lot worth protecting, and umm the products do look quite a lot alike to this casual observer. Stout tends to say the products are not alike (only one has a glass bottle, a devil, is beer-like, is American). But even Stout does not go too far in saying the products don’t look alike.

Stout argued:

Sazerac’s claims are barred because the term “fire” and all of the claimed elements of the alleged FIREBALL Trade Dress described in the Complaint are used so frequently by third parties in connection with products characterized by a cinnamon or spicy hot taste that consumers do not perceive them as identifying or signifying any particular source. The use of “fireball” to mean a spicy hot cinnamon flavor is widespread across all manner of foods and beverages, including alcoholic beverages. For example, Atomic Fireballs [were] introduced in 1954. The term “fire” is commonly used to refer to … drinks that have a cinnamon taste. Likewise, the use of “hot” colors such as yellow, orange, and red used with black, along with images of flames, other fire-related imagery, demons, or the devil himself, are so common as to be the norm in the packaging and promotion of cinnamon-flavored and hot and spicy products. The use of clear bottles to sell alcohol beverages is ubiquitous. The use of red caps is common.

Stout then shows pictures for 17 products with such elements. I am not sure if this helps or hurts because — while the other ones do share many common elements, they don’t really look like Fireball to the same extent as the product at issue. Stout goes on to set out no less than 24 defenses, and three counterclaims. Stout attempts to characterize the Sazerac image as a dragon, even though it has plenty in common with your garden variety devil (tail, generally fearsome look).

Trying to get off the defensive and onto some offensive ground, Stout’s first counterclaim is — no dragon, no infringement. Stout’s second counterclaim is, it’s tough to see a dragon without a tail. Third, Stout alleges its FIRE FLASK trademark “does not infringe any enforceable trademark rights owned or licensed by Sazerac. Accordingly, Stout Brewing is entitled to declaratory judgment of non-infringement… .”

I have a bold prediction. Fireball will not be changing its labeling anytime soon, and Fire Flask will.

The Law of Handmade


It’s a little hard to believe. After all the centuries, it is still nearly impossible to define what “handmade” is.

That’s good for Maker’s Mark and Tito, etc.

On the other hand, no pun intended, it is not so hard to see what “handmade” is not. We still have a battle of those two poles. A few months back, I spoke on this very topic at the ADI conference in Louisville. The PowerPoint is here. As it turns out, the U.S. and TTB have little to nothing by way of a solid definition. Other big countries don’t fare much better.

Note:  for the heck of it, I just want to note that this post is written aboard the 7 am train from Lisbon to Porto. Perhaps I will learn a little something about handmade dessert wines.

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