Food and beverage manufacturers are under siege these days from lawsuits, some of them with questionable merits. One of the frequent areas in which these manufacturers are sued is product labeling. Plaintiffs’ attorneys are always on the prowl for lawsuits to file against food and drink makers in the hope of scoring a quick and lucrative settlement. In addition, rivals may also sue manufacturers when they believe that a label gives an incorrect impression that causes the public to associate the rival’s product with theirs. Recently, distilled spirits manufacturers have been sued by plaintiffs claiming that their products’ labels were incomplete or misleading.
Plaintiffs’ Attorneys Have Found Success in Suing Beverage Companies
The plaintiffs’ bar typically looks for industries in which there is heavy commercial activity when deciding which allegedly unlawful conduct to target with lawsuits. When one attorney succeeds in a class action lawsuit, numerous others will file copycat lawsuits against other defendants in an attempt to achieve a similar outcome. Recently, the alcoholic beverage industry has enjoyed increasing revenues and profitability thanks to manufacturers continually innovating and finding new ways to satisfy customer needs. This has drawn the attention of the plaintiffs’ bar, which is looking to make its own money off of litigation. The same attorneys who filed lawsuits against King’s Hawaiian rolls, claiming that the marketing is misleading because the rolls are made in California, are now squarely taking aim at the alcoholic beverage industry.
No matter how alcoholic drink manufacturers market their products, whatever claims they make seem to draw scrutiny from plaintiffs’ attorneys. One common basis for lawsuits is when plaintiffs allege beverage manufacturers made false or misleading claims about the health benefits of an alcoholic drink. Manufacturers are not allowed to make these representations on the product label. Another common basis for lawsuits is when a label may be perceived to represent that a product contained a certain ingredient that it did not.
Two Successful Lawsuits Will Spur More
Plaintiffs seem to stretch what may be considered a representation about health when they file lawsuits. For example, Molson Coors Beverage, the maker of Vizzy Hard Seltzer products, was sued by a plaintiff who alleged that Vizzy labels claimed the hard seltzers were healthier than their competitors. The case was premised on the following words on the product’s label: “With antioxidant vitamin C from acerola superfruit;” however, this is merely a statement of fact, and there was no representation whatsoever about a healthy alcoholic drink. Nonetheless, Molson Coors settled the class action lawsuit for $9.5 million.
Another lawsuit accused Anheuser-Busch of false marketing for not making it clear that its popular “Rita” line of drinks was made with a malt base instead of spirits. The plaintiffs alleged that the use of terms like “margarita” and “mojito” led customers to believe that the drinks were made with actual spirits. Again, in a win for the plaintiffs’ bar, Anheuser-Busch settled the case. Consumers were able to receive up to $21 if they had proof of purchase and $9.75 if they did not. In reality, claimants likely received less than those amounts, but the plaintiffs’ lawyers stood to collect as much as $2.1 million in fees and expenses.
This litigation was successful for the attorneys who filed it. They will net several million dollars, while individual class members could receive a few dollars each for themselves. There is no doubt that other lawyers have taken note of this case and are preparing additional lawsuits targeting similar claims made by manufacturers about their products.
A Recent Lawsuit Alleges Misleading Packaging of Fireball Cinnamon
Recently, another lawsuit has taken aim at the makers of Fireball. There are two types of Fireball drinks: Fireball Cinnamon Whisky, which contains actual whiskey, and Fireball Cinnamon, which does not. The manufacturer sells mini bottles of Fireball Cinnamon that retail for 99 cents each. The mini bottles do not contain any whiskey (although they have a 16.5% alcohol content). The lawsuit claims that the manufacturer specifically designed the mini bottle to look like the larger bottle and give a false impression that it contains whiskey.
Rivals have also taken aim at makers of distilled spirits. For example, the Scotch Whisky Association sued a Virginia distiller, Virginia Distillery Co., alleging the distillery misled consumers into thinking that its Virginia-Highland whisky is scotch. The lawsuit claims that “highland” was exclusively associated with scotch whisky because The Highlands are one of Scotland’s five legally protected whisky regions.
Best Practices for Alcoholic Beverage Manufacturers
Beverage makers need to exercise additional care in the face of the potential coming tidal wave of lawsuits. They need to carefully review their labeling to determine whether the labeling is inviting possible lawsuits for alleged false advertising. Companies need to increase the involvement of their attorneys in the product marketing process. Labels should receive joint approval from both marketing and legal departments.
Beverage companies will continue to innovate and introduce new products. Before a new product is sold, the manufacturer needs to undertake an intensive review to ensure that the new product’s labeling and advertising do not contain anything that could be read as an implicit representation. They need to consider each label and ad from multiple angles and review them extensively, perhaps with the assistance of focus groups or other research methods that involve members of the general public.
Another way for beverage manufacturers to protect themselves legally is to add a disclaimer on the front of the product. Although product makers do not like to add disclaimers, they may be necessary in light of the increased scrutiny of the alcoholic beverage industry. A prominent disclaimer would strengthen a defendant’s case and could help it get a lawsuit dismissed in the early stages. Disclaimers may be a necessary evil to prevent beverage manufacturers from falling victim to an opportunistic plaintiffs’ bar.
Given the fact that several lawsuits have already forced settlements, beverage makers can expect this wave of litigation to intensify and continue. They need to be prepared ahead of time with litigation counsel already in place so they can swiftly and effectively respond to any legal claims that are threatened or actually filed in court. Contact the experienced hospitality lawyers at MehaffyWeber to see how we can help you.