Last week, a federal court dismissed a putative class-action lawsuit against Diageo, holding that Red Stripe’s labeling and packaging does not, as a matter of law, mislead reasonable consumers into thinking that Red Stripe is made in Jamaica with Jamaican ingredients.
The suit, Dumas et al. v. Diageo PLC et al., began in July 2015, when class-action Plaintiffs alleged that Diageo deceived consumers into believing that Red Stripe is manufactured in Jamaica. Plaintiffs argued that Diageo’s use of the phrases “Jamaican Style Lager” and “The Taste of Jamaica,” incorporation of the Desnoes & Geddes logo, and allusions to the “spirit, rhythm, and pulse of Jamaica,” misled consumers to believe that Red Stripe was a Jamaican Beer.
Chief Judge Barry T. Moskowitz of the United States District Court for the Southern District of California issued the opinion, disagreeing with Plaintiffs, and holding that “no reasonable consumer would be misled into thinking that Red Stripe is made in Jamaica with Jamaican ingredients based on the wording of the packaging and labeling.”
Key to Judge Moskowitz’s decision was the fact that Red Stripe says “Jamaican Style Lager” and “Brewed & Bottled by Red Stripe Beer Company, Latrobe, PA.” Judge Moskowitz concluded that the word “Jamaican” modifies the word “Style” (not “Lager”), and indicates that the product is not from Jamaica. Additionally, Judge Moskowitz concluded that the brewed and bottled by language indicating “Latrobe, PA,” was legible. Judge Moskowitz also concluded that the phrase “The Taste of Jamaica” and the allusions to the “spirit, rhythm, and pulse of Jamaica” were vague and meaningless (i.e., mere puffery), and could not reasonably be relied upon as designations of source.
Regarding the Desnoes & Geddes logo, Judge Moskowitz stated that the “logo itself does not impart information regarding the source of the product.” Judge Moskowitz added, in a footnote, that “the Court doubts that the average consumer would know that the D&G logo is associated with Desnoes & Geddes Limited, the Jamaican brewery, as opposed to, say, Diageo-Guinness.”
Overall, Judge Moskowitz appears to have reached the correct decision. I am, however, skeptical of some of his conclusions. First, regarding the Desnoes & Geddes’s logo, I tend to disagree that the logo “does not impart information regarding the source of the product.” Imparting information regarding the source of a product is the key function of a trademark. Accordingly, I don’t think it’s unreasonable for a consumer to believe that a beer bearing Desnoes & Geddes’s logo (a registered trademark) originates from Desnoes & Geddes in Jamaica.
Second, regarding the brewed and bottled by statement, Judge Moskowitz stated, “It is likely that anyone examining the label carefully enough to read the language on the back of the label would see that the beer is brewed and bottled in Pennsylvania.” I agree that someone examining the back label would understand that the beer is brewed in Pennsylvania, but that’s the problem—the fact that a consumer would have to carefully examine the back label to glean the beer’s true origin suggests that the rest of the labeling and packaging might be misleading.
My two qualms notwithstanding, I believe that this case was correctly decided, based on the “Jamaican Style Lager” language. As Judge Moskowitz noted, consumers are exposed to numerous examples of beers with a geographic indicator modified by the word “style” (Belgian-Style, Cubano-Style), denoting that the beer is not actually made in the geographic location identified.
Plaintiffs have until April 21, 2016, to file an amended complaint, if they so choose.
In doing so, the CityPages article took a few tough shots at TTB, calling them a “bunch of unchill tightwads,” “notoriously persnickety,” and describing the anatomy of people who work there, in an even less flattering way.
But if the label at issue looks anything like the above, why should a government agency give it a thumbs up? What’s the point of a review process, if it’s so porous that an LSD label would go through? By contrast, this one looks to be the version that did go through, and I really don’t think it’s so bad, or such a gross imposition on free speech. This seems like a good balance; the approved version certainly gets the point across, in a slightly more subtle way.
Even the brewer seems to acknowledge the above name might go too far, saying “With the name, I think we were pushing the envelope, too. Unfortunately, the envelope broke.”
On March 22, 2016, the U.S. Court of Appeals for the Sixth Circuit affirmed a district court’s dismissal of a putative class action lawsuit against Anheuser-Busch. In In re: Anheuser-Busch Beer Labeling Marketing and Sales Practices Litigation, the Sixth Circuit held that A-B’s compliance with federal regulations governing alcohol content provided A-B with a safe harbor from state-law consumer protection claims. Notably, the court held that the safe harbor applied regardless of whether A-B intentionally overstated the alcohol content of its beer.
The consumer-plaintiffs filed several class-action lawsuits against A-B back in 2013, alleging that A-B intentionally overstated the alcohol content of many of its beers. These class-actions were consolidated into one suit in the U.S. District Court for the Northern District of Ohio. A-B moved to dismiss the consolidated action, arguing that its compliance with federal regulations provided it with a safe harbor from the plaintiffs’ claims.
The federal regulation at issue, 27 CFR § 7.71(c)(1), provides in relevant part, “[f]or malt beverages containing 0.5 percent or more alcohol by volume, a tolerance of 0.3 percent will be permitted, either above or below the stated percentage of alcohol.” The plaintiffs argued that the regulation should only apply to accidental deviations, not to intentional overstatements of alcohol content. A-B countered that the regulation does not discriminate based on intent, and that because the actual alcohol content of each of its beers was within the permitted range, it was in compliance with the regulation. The issue boiled down to a question of regulatory construction.
The district court agreed with A-B’s interpretation, noting that nothing in the regulation distinguished between intentional and unintentional deviations in alcohol content, and holding that the regulation creates a safe harbor for a brewery that does not exceed the tolerance range. The district court held that because the actual alcohol content of A-B’s beers was within the permitted tolerance range, the plaintiffs could not allege that A-B’s alcohol content statements were misleading.
On appeal, the plaintiffs reasserted their argument that the regulation’s text and purpose support an interpretation that only allows unintentional variations. The Sixth Circuit was unpersuaded, and affirmed the district court’s dismissal. The Sixth Circuit noted that nothing in the text of the regulation implies any distinction based on the motive of the manufacturer. Importantly, the Sixth Circuit noted that other TTB regulations contain explicit intent-based exceptions. For example, 27 CFR § 27.42a sets a tolerance range for carbon-dioxide levels in wine, and states, “Such tolerance will not be allowed where it is found that the limitation is…intentionally exceeded” (emphasis added). The absence of a similar exception in the malt beverage regulation, the Sixth Circuit noted, supports a conclusion that no such exception was intended.
Finally, the Sixth Circuit concluded that interpreting the regulation to allow intentional overstatements of alcohol content that are within the tolerance level neither conflicts with the general prohibition against misleading statements nor subverts the purpose of the regulatory scheme as a whole. The Sixth Circuit noted that it could reconcile any conflict by concluding that “the ATF [sic] determined that such small variances are not misleading to consumers.”
The Sixth Circuit’s decision in In re: Anheuser-Busch is yet another example of a federal court applying the safe harbor doctrine to activity that is expressly permitted by the plain language of a federal regulation. Just last October, in Parent v. MillerCoors LLC, the U.S. District Court for the Southern District of California held that the safe harbor insulated MillerCoors from consumer allegations that its use of “Blue Moon Brewing Co.” on Blue Moon labels was misleading. The regulation at issue in Parent expressly permitted a company to use its trade name on labels.
The Sixth Circuit’s decision also confirms a noticeable trend in judicial treatment of TTB approval of statements on alcohol beverage labels: Where federal regulations expressly permit such statements, TTB approval provides a safe harbor. By contrast, where federal regulations are silent regarding particular statements, TTB approval may not provide a safe harbor. This latter proposition is perhaps best demonstrated by the various “handmade” lawsuits (most notably those involving Tito’s “Handmade” Vodka), in which courts are divided on whether the safe harbor applies to TTB approval of terms like “handmade.”
Here is a fun little article that combines a few of my favorite things: beer, law, The Washington Post and four-leaf clovers.
The article tends to say that Flying Dog had to skirmish with FDA a wee bit, before getting the go ahead to put the clovers in the beer. From the article, I can’t tell if the issue was clovers in general, or only the lucky ones.
The article also hints at other quirks in the law. It says Flying Dog submitted the beer to FDA for approval, but this seems unlikely. I can see this Maryland brewer submitting a formula to TTB for approval, but not to FDA. Also, I would have expected to see a TTB approval for the label, but I can’t find one, and this must signal that Flying Dog only plans to sell this beer intrastate, in the near term. Mostly, this beer probably signals a good excuse for a St. Patrick’s Day-timed press release.
Even though clover seems pretty common, not so new, and generally recognized as safe (whether in 21 CFR 182.10 or via common sense), this article does serve as a good reminder that brewers can’t just use any article that is lying around the field or the grocery store. Some things need a TTB and an FDA ok first.
Update. Hark. I got lucky. A nice person alerted me that the COLA is here.
Trump is riding high in the polls at this very moment. So high that Mitt Romney just attempted to slow Donald’s roll, by saying “what ever happened to Trump Vodka?” Indeed. All faithful readers of this blog had to know that the 2016 contest would eventually come down to matters of spirituous liquors. Mitt said:
But wait, you say, isn’t he a huge business success that knows what he’s talking about? No he isn’t. His bankruptcies have crushed small businesses and the men and women who worked for them. He inherited his business, he didn’t create it. And what ever happened to Trump Airlines? How about Trump University? And then there’s Trump Magazine and Trump Vodka and Trump Steaks, and Trump Mortgage? A business genius he is not.
Mitt has a point. I have rarely seen a less thoughtful label concept. The label makes a hollow claim that it’s “Super Premium” and “The World’s Finest” — with — wait for it — nothing to back it up. There is almost nothing of note on the label or the application. I see about seven approvals, between May of 2006 and September of 2007, before the brand was put out of its misery.
This article reports that the bottles were emblazoned with the slogan “Success Distilled,” but I don’t see it on the approvals, as would surely be required (to comply with things like laws). It continues:
As for the vodka itself, it was created by Wanders Distillery in Holland, distilled five times from “select European wheat,” and then rested for six months in stainless steel vats before bottling at 80 proof. … The only trouble was, nobody bought it. By the end of 2007 it barely registered among the top-selling vodkas, badly trailing the likes of Smirnoff and no threat whatsoever to Grey Goose. Go figure that customers wouldn’t line up for a product that existed for the sole purpose of one-upping Trump’s friend. Who would have guessed that drinkers wouldn’t hand their money to a teetotaler who had no idea what his own product tasted like. In 2008, less than two years after launch, the Trump Vodka trademark was abandoned.
Among the other bad ideas, is there any point to resting the stuff in stainless steel?