Tuesday, February 06, 2018

A trace of deceptiveness in bourbon age labeling

Penrose v. Buffalo Trace Distillery, Inc., 2018 WL 705054, No. 17CV294 (E.D. Mo. Feb. 5, 2018)

Plaintiffs brought a putative class action claiming that BT misrepresented that  Old Charter bourbon has been “aged 8 years.” The court mostly refused to dismiss the complaint.

closeup on neck label, before and after

the whole bottle

Old Charter used to be aged for 8 years; as of 2014, it isn’t, but the bottle still says 8 prominently.  (See a discussion at this link.)  “Eight” or “8” appears three places on the bottle: on the neck, on its own label on the top of the body, and in the text portion which reads “gently matured for eight seasons in century old brick warehouses.” All BT did was remove “aged” and “years” from around the 8 on the label.  “Seasons” means years to reasonable consumers, plaintiffs alleged, given BT’s prior eight-year and ten-year Old Charter products, which claimed to be matured for “eight seasons” and “ten seasons,” respectively. The number isn’t part of the name; BT’s own website used “Old Charter,” as did BT’s application for the label with the Alcohol and Tobacco Tax and Trade Bureau (TTB).  Published reviews indicate a significant decline in quality, such as: “for Old Charter 8 the NAS [non age-stated] release was strikingly inferior to the age-stated product.”  Consumers have complained, e.g., “what’s said is deceptive, very deceptive in fact...It’s still hogwash though and deceptive...because what you’re really doing is selling younger whisky while pretending it’s older.” Nonetheless, BT receives a price premium for its apparently age-stated bourbon, as shown by premiums paid for other age-stated versions.

BT argued that no reasonable consumer would infer that Old Charter is aged for 8 years because of the number 8 alone. “The Court cannot conclude as a matter of law and at this stage of the litigation that the packaging is not misleading, particularly in light of Plaintiffs’ allegations that previously, Old Charter was aged 8 years. Consumers may just as likely have seen the 8, and based on previous purchase, thought the 8 represented the years of aging.”  Nor did state law safe harbor provisions apply despite the TTB’s approval of the Old Charter label; “deceptive conduct, viewed as a whole, is often broader than the otherwise regulated conduct; therefore, in those circumstances, the doctrine does not apply.”

Claims based on the Magnuson-Moss Warranty Act failed because bourbon’s age is a description of the product and in no way promises any level of performance for any period of time, as required under the MMWA. Nor was there a breach of the implied warranty of merchantability pled, because even un-aged bourbon is merchantable: it’s are “fit for the ordinary purposes for which such goods are used.”

Fraud claims, however, were pled with the requisite particularity (I must admit to always being a bit amused by the “where” in these cases—on the label!)  Plaintiffs also stated a claim for unjust enrichment, in the alternative to their properly pleaded breach of contract/express warranty claims.

It was too early to decide any class action issues, but the court did dismiss claims for injunctive relief, since the named plaintiffs wouldn’t be fooled again even if they expressed willingness to buy properly labeled Old Charter bourbon.

No comments: