In the great whiskey wars commencing in 2014, Maker’s Mark had a great day, here, in May. By contrast, Angel’s Envy had a much less propitious day early this week. A federal judge in Illinois dismissed a small part of the class action fraud case against Angel’s Envy, but let big parts go forward. My friends at the Locke Lord law firm, who recently and successfully wrapped up the similar case, against Templeton, explained:
The decision to allow the Angel’s Envy case to proceed past a motion to dismiss is consistent with similar decisions in the cases against Tito’s Handmade Vodka and WhistlePig Rye Whiskey, and signals that the courts are willing to consider consumer-fraud claims against spirits companies that supposedly sell unattributed mass-distilled products while holding themselves out to the market as smaller scale, craft brands. As a result of these rulings, the case will proceed into discovery, which has the potential to be lengthy and expensive.
In my view, the most interesting parts of the 17 page opinion and order are as follows.
1. The potential damages may exceed $5 million, as the brand but not the plaintiffs contend. “Louisville has plausibly shown that more than $5,000,000 is at stake in this case.” Also, the “plaintiffs adequately allege that the whiskey they received was worth less than what they were promised.”
2. Even though Maker’s Mark recently won a fairly similar case, the court said:
the Angel’s Envy brand is much smaller than the Maker’s Mark brand. As a result, a consumer could reasonably believe the phrase “hand crafted” on the finished whiskey label meant it was not mass-produced. Additionally, Aliano alleges that the context of “hand crafted” on the label implies that Louisville controls the entire process of making the finished whiskey at its facilities in Bardstown, Kentucky, when most of the process occurs at MGP’s facilities in Indiana. … In light of the more robust facts alleged in this case, we are not persuaded by the reasoning in Salters.
3. TTB label approvals do not provide a safe harbor. The court said:
While the label itself was approved by TTB, it is not clear what statements on it were actually reviewed and approved. The relevant regulations require the phrase [bottled by, but] no regulation states whether the phrase “hand crafted” can be added before this phrase. Here Louisville [added it and the] regulations do not specifically authorize this addition. … [O]n the complaint before us, we cannot determine whether TTB actually reviewed and authorized every statement on the label.
It is not entirely clear whether consumers care what is and is not “hand crafted.” It is not clear whether TTB cares much about this particular issue. It is not even clear whether the plaintiff really cares, deep down. But now we know Judge Aspen cares, and perhaps we will someday, in the not too distant future, get a handle on what the law makes of this term.