Robert C. Lehrman

Earlier this week a federal court decided that TTB’s approval for Bud Light Lime Lime-A-Rita provides a “safe harbor” to protect certain label elements. Largely on account of this safe harbor, the court dismissed the class action lawsuit. The plaintiff had contended that the reference to “light” on the Rita products was misleading because it leaves an impression that the flavored malt beverages are low in calories and carbohydrates.

The Cruz v. A-B decision is in stark contrast with the Tito’s decision of three months ago. In the vodka dispute, Tito tried to locate the same safe harbor, but got pushed back into the middle of a heavy storm.

There are many class action lawsuits filed against alcohol beverage companies during the past year. They include Templeton, Angel’s Envy, Tincup, Whistlepig, Jim Beam, Maker’s Mark, Bulleit and Breckenridge. In most if not all, the defendant brands have argued that the TTB approval should create a safe harbor. But so far, until the Lime-A-Rita case, no judge has agreed that the COLA should protect the brand.

The Lime-A-Rita case may be an outlier because, at least according to Judge Birotte, the plaintiffs did a horrendous job with the pleadings. Secondly, TTB has a fairly specific policy regarding “light” labeling, and it appears that A-B complied with it. In most of the other suits so far, there is no specific TTB policy relating to the labeling at issue (as in the “handmade” cases) — or there is a specific policy but it appears the brand did not comply with it (as in the state of distillation cases).

The Lime-A-Rita court was not even a little impressed with plaintiffs argument that the Rita products should be regulated by FDA rather than TTB. The court explained that the Brown-Forman case resolved this jurisdictional issue way back in 1976 and “there is nothing in the 40 years of subsequent case law that persuades the Court to disagree with the Brown-Forman holding.”

Taking a close look at the label approvals, the court said:

Instead [of TTB’s “light ruling,” Ruling 2004-1], it is the COLAs that are considered the rulemaking authority here which trigger the safe harbor provision. Plaintiffs neglect to address the administrative force of the COLAs. They apparently presume that A-B’s safe harbor arguments solely rest on the [Ruling] but it is the COLAs that have the force of law here. … Plaintiffs do not, and cannot, dispute this ‘relatively formal administrative procedure’ and the effect of law COLAs embody. … [Because] Plaintiffs’ causes of action conflict with the TTB’s approval of the Rita Products’ labels, the safe harbor doctrine insulates A-B from liability.

I have my doubts about whether the label approval process is a “relatively formal administrative procedure.” Relative to a kegger in the frat basement, perhaps. On the other hand, it is not even as formal as a Las Vegas wedding.

In closing, and handing A-B a big victory, the judge went even further, writing:  “Because Plaintiffs’ complaint is rife with deficiencies, the Court finds that Plaintiffs’ causes of action under UCL, FAL, and CLRA fail as a matter of law.”

Note:  extra credit for anyone who can identify the glorious safe harbor depicted above.

Another week, another lawsuit, another whiskey brand.

The above video features Bulleit Bourbon and covers the labeling and legal controversies swirling around the whiskey industry.

Bloomberg did a good job with the video, published a few days ago. It needs more views than the 1,250 as of this writing. The images are beautiful. The video avoids the sensationalism and oversimplification common to so many other mainstream media stories about whiskey. The shots of whiskey bigshots like Chuck Cowdery and Jim Rutledge are a bonus.

Bulleit got sued June 1, five days after the video surfaced. The complaint relies in large part on the Bloomberg video. Once again, as with Tito’s, Maker’s, Angel’s, Tincup, Beam, Templeton, the lawsuit alleges deceptive labeling. This one is noteworthy, though, because Bulleit is owned by Diageo, “the world’s largest liquor conglomerate” as per the video. The label is above, and a recent label approval is here.

In a rather stunning example of the pot calling the kettle black, the complaint prattles on and on about how the whiskey is actually made by the Kirin Brewing Company, god knows where, even though it is fairly easy to see that the whiskey is made by one of the finest whiskey producers in the world, right where claimed. TTB records show two and only two distilleries in Lawrenceburg, KY. One is Wild Turkey, the other is Four Roses. Neither one is hard to find, or is a slouch when it comes to making fine whiskey.

To the extent this issue grabs you, and you care about the intersection of alcohol beverages, labeling and the law, you should not miss the webinar set out here — later this week.