Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Fla.: Beck’s drinkers state valid claims over “German” beer brewed in St. Louis, (Sep 9, 2014)

By Greg Hammond, J.D.

Beck’s beer drinkers were allowed to proceed with claims that American brewing company Anheuser-Busch Companies, LLC (AB) misrepresented that Beck’s was “German” beer, imported from Germany, and brewed using German requirements, but—in truth—is brewed in St. Louis, Missouri. AB’s motion to dismiss was mostly denied by the federal district court in Miami, as the consumers stated valid state law consumer protection claims; safe harbor provisions could not be applied; and the consumers adequately alleged actual harm (Marty v. Anheuser-Busch Companies, LLC, September 5, 2014, O’Sullivan, J.).

Background. Consumers from Florida, New York, and California allegedly purchased Beck’s “in reliance on representations contained on [the] packaging and Beck’s history of being an imported beer from Germany.” Specifically, the consumers alleged that AB made numerous misrepresentations about Beck’s that caused confusion, as they believed they were purchasing “German beer, imported from Germany, brewed using German requirements and with German ingredients, when in fact, they [we]re purchasing beer brewed in St. Louis, Missouri…with ingredients from the United States.” Accordingly, Beck’s drinkers asserted that they purchased beer that had less value than what they paid, and have therefore suffered legally cognizable damages proximately caused by AB’s misconduct.

The consumers brought claims under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), the New York General Business Law (NYGBL), California’s Unfair Competition law (UCL), and California’s Consumer Legal Remedies Act (CLRA). AB moved to dismiss the state consumer protection claims, as well as the consumers’ claim for injunctive relief.

Consumer protection claims. In support of its motion to dismiss, AB argued that the consumers failed to state causes of action under the FDUTPA, NYGBL, UCL, and CLRA because: (1) a reasonable consumer could not be deceived by AB’s representations; (2) the statutes’ safe harbor provisions insulate AB from liability; and (3) the consumers failed to allege cognizable harm.

The court disagreed with all three arguments, first finding that a reasonable consumer could be misled to believe that Beck’s is an imported beer brewed in Germany. Specifically, the statement “Product of USA” was deemed “difficult to read,” as it was blocked or easily obscured by overhead lighting. The statement “BRAUEREI BECK & CO., BECK’S © BEER, ST. LOUIS, MO” was possibly not sufficiently descriptive, according to the court, as it does not actually disclose the location where Beck’s is brewed. Additionally, the statement “Brewed under the German Purity law of 1516” could be misleading to a reasonable consumer and the phrase “German Quality” was not mere puffery, when viewed in conjunction with other statements, AB’s marketing campaign, and the beer’s German heritage. The court consequently concluded that the consumers stated valid state consumer protection claims.

Second, the court determined that the state laws’ safe harbor provisions—which prohibit enforcement of state consumer protection laws when the legislature has permitted certain conduct, acts, or practices—were inapplicable in this case. Although the Alcohol and Tobacco Tax and Trade Bureau approved the labels affixed to the Beck’s bottles and cans, the consumers’ allegations that part of the approved labels was not visible at the time of purchase were enough to preclude the safe harbor defense. Third, the court found that the consumers alleged actual harm, as courts recognize an injury to consumers who pay premium prices for products based on misrepresentations. Consequently, AB’s motion to dismiss the state consumer protection claims was denied.

Injunctive relief. AB also moved to dismiss the consumers’ request for injunctive relief, arguing that they lacked standing. As a preliminary matter, the court determined that the consumers met the first three requirements of establishing Article III standing: (1) an injury-in-fact; (2) a causal connection between the alleged injury-in-fact and AB’s actions; and (3) that their injuries would be redressed by a favorable decision. However, the court found that the consumers failed to meet the final requirement—a demonstration that a real and immediate threat of future injury exists. Specifically, the court determined—based on the complaint—that the consumers no longer purchase Beck’s beer, and that no real and immediate threat of future injury therefore exists. Consequently, AB’s motion to dismiss the request for injunctive relief was granted.

The case number is 13-23656-CIV-O’Sullivan.

Attorneys: John Campbell (Campbell Law, LLC) for Francisco Rene Marty. Brandon R. Keel (Skadden, Arps, Slate, Meagher & Flom, LLP) for Anheuser-Busch Companies, LLC.

Companies: Anheuser-Busch Companies, LLC

Cases: Advertising ConsumerProtection StateUnfairTradePractices FloridaNews