Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Cal.: Red Stripe labeling did not misrepresent beer as imported, (Apr 7, 2016)

By Michael Menzhuber, J.D., LL.M.

Claims that the packaging and labeling for Red Stripe beer misled consumers into believing that it was an imported beer—in violation of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA)—were dismissed by the federal district court in San Diego (Dumas v. Diageo PLC, April 16, 2016, Moskowitz, B).

Aaron Dumas and Eugene Buner both purchased six-packs and twelve-packs of Red Stripe beer. Red Stripe, which was first produced in Jamaica, is currently produced in Latrobe, Pennsylvania. The packaging for Red Stripe beer states that it is a “Jamaican Style Lager” that contains “The Taste of Jamaica” and displays the logo “D&G,” the Jamaican brewery with rights to Red Stripe. The border of the bottle label says: “Brewed and Bottled by Red Stripe Beer Company Latrobe, PA.”

The plaintiffs filed a putative class action against Diageo-Guinness USA Inc. (D&G USA), alleging that the company engaged in unfair and deceptive practices by misleading consumers into purchasing and overpaying for Red Stripe beer under the belief that the beer was produced in Jamaica and imported. Their complaint asserted violations of California’s UCL, FAL, and CLRA. Their complaint also asserted negligent misrepresentation and intentional misrepresentation. D&G USA filed a motion to dismiss for failure to state a claim.

D&G USA argued that no reasonable consumer would be misled by the statements made on the Red Stripe packaging and labeling. After noting that the reasonable consumer standard was the applicable standard for determining whether representations are deceptive, the court agreed.

The court determined that no reasonable customer would be misled by the visible packaging into believing that Red Stripe was brewed in Jamaica with Jamaican ingredients because: (1) “Jamaican Style Lager” modifies “style,” not “lager,” and was an indication that the product was not from Jamaica; (2) “Taste of Jamaica” was a vague and meaningless phrase; and (3) the D&G logo did not impart information regarding the source of the product.

Additionally, D&G USA did not have any heighted duty to alert consumers, who already had an understanding and expectation that Red Stripe was brewed in Jamaica, that production of the beer had been moved to Pennsylvania.

The court also found that the bottle labels would not lead a reasonable person into believing that Red Stripe was made in Jamaica with Jamaican ingredients because: (1) a reference to the “rhythm and pulse of Jamaica and its people” could not be construed as a designation of origin; and (2) “Brewed & Bottled by Red Stripe Beer Company Latrobe, PA’ appeared, albeit in small wording, at the edge of the label.

The case is No. 15cv1681 BTM (BLM).

Attorneys: Ashley R. Rifkin (Robbins Arroyo LLP) for Aaron Dumas. Ann Marie Mortimer (Hunton and Williams) for Diageo-Guinness USA Inc.

Companies: Diageo-Guinness USA Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews