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I’ll Have Another: False-Labeling Class Action Lawsuit Against Hawaiian-Themed Beer Continues

Sep 29, 2017 | Posted by Kirsten F. Gallacher | Topic: Class Actions

In 2017, class action lawyers have filed numerous lawsuits challenging the labels and/or packaging for various products on the issue of where the products are made.  Broomfield v. Craft Brew All., Inc., No. 17-cv-01027-BLF, 2017 U.S. Dist. LEXIS 142572 (N.D. Cal. Sep. 1, 2017) is another one of these putative class actions in which the plaintiffs challenge where Kona Brewing Company actually brews its Hawaiian-themed beer.

Three named plaintiffs brought a putative class action against Craft Brew Alliance, Inc., (CBA) doing business (and better known to some) as Kona Brewing Company.  Kona has been brewing beer in Hawaii since it began in 1994.  In 2010, Kona was acquired by CBA.  Kona’s beer varieties include “Wailua Wheat Ale,” “Hanalei Island IPA,” and “Longboard Island Lager.”  The plaintiffs allege that Kona brews its draft beer sold in Hawaii at its brewery location on the Big Island, Hawaii, but it brews its draft beer sold outside of Hawaii as well as all bottled and canned beer at Kona’s brewing outside of Hawaii.

The plaintiffs sued CBA for intentionally misleading consumers into believing that Kona brews all of its beer in Hawaii.  According to the plaintiffs’ allegations, various representations on the beer’s packaging create the impression that Kona brews its beer in Hawaii and then exports it elsewhere.  For example, many of the twelve-pack boxes feature a map of Hawaii, with a star marking the location of Kona’s brewery on the Big Island, Kona’s regularly use of the statement: “We invite you to visit our brewery and pubs whenever you are in Hawaii,” and the packaging only includes a Hawaiian address.  The plaintiffs, who are all residents of the mainland, claim that based on these representations, they believed the beer was brewed in Hawaii and would not have purchased it (or would have paid less) had they known it was actually brewed in the Continental United States.

CBA moved to dismiss the plaintiffs’ claims under California’s consumer protection statutes (e.g., California's Consumers Legal Remedies Act), because the representations on Kona beer are not misleading to a reasonable consumer, given they are non-actionable puffery or are qualified by a clear disclaimer.

The district court, however, denied the motion.  The court found the certain representations (i.e. the map of Hawaii identifying Kona’s brewery) did more than indicate a Hawaiian-themed beer.  Rather, such statements and images were specific and measurable representations that could deceive a reasonable consumer that Kona brewed all of its beer in Hawaii.

The court also rejected CBA’s argument that the disclaimers on the beer labels were sufficient to contradict the representations on the packaging.  The packaging itself does not include a disclaimer of the brewing locations.  And although the beer labels identify all of Kona’s brewing locations—including the mainland locations—the label is obstructed by the packaging and therefore not visible to the consumer at the time of purchase.  Further, merely listing the five brewing locations—including Kona, Hawaii—does not identify which brewery actually made the beer purchased by the consumer.  Thus, even if a reasonable consumer could view the beer label, the non-descriptive list of brewing locations would not clarify where the beer was actually brewed.  The court concluded that it could not, as a matter of law, conclude that the statements identified by the plaintiffs would not mislead a reasonable consumer.