Craft Beer Litigation: Understanding the Blue Moon Class Action Part 1
Readers of Alcohol & Advocacy will not be surprised to learn that as craft beer and spirits grow in market share and notoriety, so too does the volume of class action lawsuits filed against their manufacturers.
From Maker’s Mark bourbon, and Tito’s vodka being challenged over their claims of being “handmade” to allegations that Blue Moon Brewing Co.’s “misleading” packaging suggests it’s a craft beer product – litigious drinkers in the United States are always on the lookout for their piece of the next big class action lawsuit. Whether these lawsuits are frivolous simpliciter, or serve a valid purpose keeping manufacturers honest with their marketing practices, is a topic for a separate post.
In this two-part feature on the Blue Moon litigation, Alcohol & Advocacy explains the facts of the lawsuit and the court’s response to the allegations.
The Blue Moon Brewing Company lawsuit (known to lawyers by its style of cause Parent v. MillerCoors LLC), was brought under Californian consumer protection and advertising legislation. For this reason the case has little to offer Canadian drinkers or manufacturers from a legal point of view. However, on a more general level the allegations raised in the lawsuit offer excellent food for thought:
- If we like the way a beer tastes, does it matter how it was produced?
- Is it reasonable for consumers to demand that the corporate structure of every brewery be set out on the labels of the beer it produces?
- Why are consumers obsessed with defining the “craft” label?
The plaintiff in Parent v. MillerCoors LLC was an individual named Evan Parent, a self-described “beer aficionado and home brewer.” Mr. Parent alleged that between 2011 and 2012 he regularly paid a premium price to purchase Blue Moon beer from San Diego-area retailers because MillerCoors created the deceptive and misleading impression in his mind that Blue Moon was a “craft beer”. In July, 2012 Mr. Parent was “informed by friends that Blue Moon is not a craft beer, but rather a mass produced beer made by MillerCoors.” In his class action complaint Mr. Parent describes himself as being “initially skeptical” of this news, but eventually “verified the facts through his own research.”
According to Mr. Parent, Blue Moon does not qualify as a “craft beer” because such beers are produced by “small, independent and traditional” craft breweries and MillerCoors is not such a brewery. Mr. Parent claimed that for a beer to qualify as a “craft beer” it must be produced by a brewery that meets the Brewers Association definition of an American craft brewery, which includes a limit on annual production of less than six million barrels, share ownership restrictions, and a condition that beer is made using only “traditional or innovative brewing ingredients.” MillerCoors produces more than 76 million barrels of beer annually.
Mr. Parent claimed that though Blue Moon is not a craft beer, MillerCoors engaged in deceptive, misleading and even fraudulent business practices to misrepresent the product as a craft beer in order to capture a sliver of the burgeoning craft beer market, and charge “up to 50% more” for Blue Moon beer than it charges for other MillerCoors products.
At the risk of oversimplification, the basis for Mr. Parent’s lawsuit can be considered under the following headings:
Trade Names and Corporate Structures
Mr. Parent alleged that MillerCoors goes to great lengths to disassociate Blue Moon beer from the MillerCoors name. For example, although Blue Moon is owned by MillerCoors that ownership is not disclosed on the bottle or packaging of the beer. Instead, the packing reads that the beer is manufactured by “Blue Moon Brewing Co.” In reality Blue Moon is brewed by MillerCoors at its Golden, Colorado and Eden, North Carolina breweries (which also produce all of MillerCoors’ other beers).
The Blue Moon Brewing Company website contains no mention of MillerCoors’ ownership of the brand, although the MillerCoors website lists Blue Moon among its “craft beer” brands.
Mr. Parent complains that MillerCoors’ use of the trademark “Artfully Crafted” in the labelling and advertising of Blue Moon misleads consumers into thinking Blue Moon is a craft beer. MillerCoors also identifies Blue Moon as a “craft beer” on its website.
Mr. Parent complains that even the “premium price” that is charged for Blue Moon adds to the deception that Blue Moon is a true craft beer, and that its placement by retailers “among other craft beers” misled him into believing Blue Moon was a craft beer.
At first blush these arguments seem compelling. Is MillerCoors taking advantage of consumers with its approach to branding Blue Moon? Even if they are, if Mr. Parent enjoyed the beer does it matter? Or is this merely a case of caveat emptor?
In Part 2 Alcohol & Advocacy will explore the court’s response to MillerCoors’ motion to dismiss the action, and why supporters of the craft beer and spirits industry should take notice.
*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.