Plaintiffs Fail to Make Their Mark: Bourbon Class Action Dismissed
Seller Beware: Consumer Protection Insights for Industry
On July 27, a federal court in California dismissed claims against the Maker's Mark distillery after concluding the statement that Maker's Mark bourbon was "handmade" was not misleading. The court found the statement "handmade" could not reasonably be interpreted as prepared only by human hands and without the use automated processes or equipment. This decision shows that class action lawsuits can, and often should, be dismissed before the parties and courts address whether the claims should be certified as a class action even if the label at issue includes a representation that might be false.
The California lawsuit was filed in December 2014 by Sandra Nowrouzi and Travis Williams. These two plaintiffs sought not only to recover for their own purchases of Maker's Mark, but also on behalf of every other person who purchased Maker's Mark in California over a four year period. Ms. Nowrouzi and Mr. Williams claimed that they purchased Maker's Mark because they believed that it was superior to other bourbons based on the product's description as "handmade" on the label. Plaintiffs argued that this description was false and misleading because the Maker's Mark distillery uses an automated process when producing the bourbon that involves "little to no human supervision, assistance or involvement."
The court dismissed plaintiffs' claims. Although the court rejected the distillery's arguments that the claims should be dismissed because the federal Tobacco Tax and Trade Bureau was responsible for approving the label, it concluded that the statement "handmade" on the label of Maker's Mark was not false or misleading. The court explained that this statement could not reasonably be interpreted to mean literally "by hand" and a reasonable consumer would not have understood the term to mean that no equipment or automated process was used to manufacture the whisky. When reaching this decision, the court observed that the distillery's public website included videos, photos and other information about the production process that disclosed the fact that machinery and automated processes were used and also relied on a recent Florida decision that rejected similar Maker's Mark claims.
These Maker's Mark decisions show that purchasers cannot always obtain a refund simply by showing that something on a food label was not literally true. Other food labeling decisions confirm this principle. Courts, for example, have similarly dismissed claims that children's cereals such as Crunch Berries and Fruit Loops were false and misleading because they did not contain real fruit, claims that crackers marketed as "made with real vegetables" were false and misleading because they were made with vegetable powder and not fresh vegetables, claims that fruit Newton cookies were improperly labeled because they contain fruit puree rather than actual fruit, and claims that the representation "365 Everyday Value" misrepresented a product as using only natural ingredients. In addition, some, but not all, courts have employed this reasoning and dismissed claims that a product was marketed as "all natural."
The reasoning underlying these decisions comports with common sense -- an interpretation that is unreasonable should not be actionable -- and may offers an avenue for companies facing mislabeling or misrepresentation claims to obtain dismissal even before it is forced to engage in discovery and class certification proceedings.
© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.