Craft Beer Litigation: Understanding the Blue Moon Class Action Part 2
In part one of Craft Beer Litigation: Understanding the Blue Moon Class Action Alcohol & Advocacy outlined the facts of a class action lawsuit started by a self-proclaimed “beer aficionado” against MillerCoors after he learned, to his horror, that Blue Moon beer was not a “craft beer” after all.
In his April 24, 2015 statement of claim, the plaintiff Mr. Parent complained that MillerCoors caused him damage by: failing to disclose its ownership of the Blue Moon Brewing Co., by marketing Blue Moon beer as being “Artfully Crafted”, and by pricing the beer as a premium product.
On a pre-trial application by MillerCoors, Judge Curiel dismissed the claim for the following reasons:
Trade Names and Corporate Structures
The Blue Moon Brewing Company is what is known in California as a “fictitious business name” or a trade name. The name is duly registered as such in the state by MillerCoors. By registering the trade name “Blue Moon Brewing Company” the court held that as a matter of law MillerCoors successfully put the world on notice of its ownership and use of the Blue Moon trade name. Moreover, the Federal Alcohol Administration Act which regulates the distribution of alcoholic beverages in the United States, provides for regulations that specifically address the labelling of bottled beer. Those regulations require that each bottle of beer “shall show by label or otherwise the name or trade name of the brewer….” A similar California law that regulates beer packaging also permits the use of fictitious businesses names.
While this answer may not be very reassuring for consumers, MillerCoors is playing well inside the established rules. The court held that MillersCoors cannot be found to be misleading consumers while at the same time being fully compliant with the letter of the applicable labelling regulations. Put another way, the conduct complained of is the same conduct that is authorized by law.
The court considered whether the reasonable consumer would be deceived by the “misrepresentations” MillerCoors made by:
- failing to mention its ownership of Blue Moon on the Blue Moon website;
- identifying Blue Moon as a craft beer on its website;
- using the trademark “Artfully Crafted”; and
- its premium price point.
To determine the issue the court relied on the “reasonable consumer” test which asks whether members of the public would likely be deceived by the complained of actions. A likelihood of deception means that it is probable that a significant portion of the general consuming public, or the targeted consumers, acting reasonably in the circumstances, could be misled.
The court resolved this issue swiftly. Given MillerCoors’ significant internet presence, and the fact that its ownership of the Blue Moon brand is prominently displayed on its website, the court could not conclude that a significant portion of the general consuming public would be misled about Blue Moon’s corporate ownership.
For the same reason, the fact that on MillerCoors’ own website it describes Blue Moon as a “craft beer” is of no significance because a consumer in the market for craft beer would know that MillerCoors does not qualify of as craft brewery and thus could not reasonably conclude that a beer manufactured by it would be a true craft beer product.
The “Artfully Crafted” trademark was resolved along the same lines as similar lawsuits filed against Tito’s vodka and Maker’s Mark bourbon. The court observed that in California, like in British Columbia, it is doubtful there is a legal or controlling definition of “craft beer”. Even if such a definition did exist, the court held that the phrase “Artfully Crafted” is a general and inherently vague term that amounts to non-actionable puffery. To be actionable as a misrepresentation a statement must make a specific and measurable claim, capable of being proven false or being reasonably interpreted as a statement of objective fact. “Artfully Crafted” – whatever that means – falls short of that standard.
Lastly, the court could find no evidence that MillerCoors had any control over where retailers placed Blue Moon on their shelves, and that there is no authority for the proposition that the price a product is sold for can itself constitute a representation or statement about the product.
Having dealt with Mr. Parent’s complaints summarily, and finding that they did not support a “cognizable legal theory” the court dismissed the claim.
For craft beer enthusiasts the Blue Moon lawsuit raises interesting questions, with no ready-made answers. Most craft beer drinkers will tell you their passion is “all about the beer” – but at the same time, no one likes being deceived. If your favourite BC brewery was purchased by a large publicly traded company, would the beer taste any different?
Perhaps more than anything else the Blue Moon lawsuit, and liquor law litigation generally, should make consumers and manufacturers more aware of the intricate web of laws and regulations governing trademarks, trade names and corporate structures.
If your bar or brewery needs assistance navigating the laws and policies that affect your business contact Dan Coles at Owen Bird.
*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.