Anheuser Busch recently agreed to settle a consumer class action over Beck’s Beer labeling that we previously reported on with regard to the uptick in consumer class actions proceeding past the pleading stage in the Southern District of Florida. Marty et al. v. Anheuser-Busch Cos., 13-cv-23656-JJO (S.D. Fla.). Anheuser-Busch’s decision to settle the Beck’s suit is not surprising, given that the company had agreed in January of this year to settlement of a sister suit commenced in Florida state court over the labeling of Kirin beer (Suarez et al. v. Anheuser-Busch Cos. LLC, 2013-33620-CA-01 (Fla. Cir. Ct.)), as we also previously reported.
According to the motions for approval, the settlement terms appear to be almost identical. Under the terms of both deals, consumers who bought Kirin or Beck’s during the respective class periods (back to October 2009 for Kirin and May 2011 for Beck’s) are entitled to obtain partial refunds varying from ten cents a bottle to $1 for a twelve pack, with the refund capped at $50 per household for those whose reimbursements are supported by proofs of purchase and $12 per household for those without. Neither settlement is subject to a capped total settlement fund amount.
Both settlements also include five year injunctions, with Anheuser-Busch agreeing to inclusion of the phrase “Brewed Under Kirin’s Strict Supervision by Anheuser-Busch in Los Angeles, CA and Williamsburg, VA” more prominently on Kirin products, packaging and website, and Beck’s agreeing to the inclusion of either “Brewed in USA” or “Product of USA” on Beck’s products, packaging and website. (The Kirin injunction also requires Anheuser-Busch to refrain from using the term “import” or “imported” with reference to Kirin beer.) In both settlements, Anheuser-Busch agreed not to oppose seven figure motions for class counsel fees — $1,000,000 in the Kirin suit and $3,500,000 in the Beck’s suit.
What’s notable about both settlements is that the phrases Anheuser-Busch agreed to include on its products, packaging and product websites already appeared on the products. This fact was central to Anheuser-Busch’s failed motion to dismiss the Amended Complaint in the Beck’s suit, in which they argued that a reasonable consumer could not be deceived as to the beer’s origin because that fact was printed on the product itself. The judge, however, sided with Plaintiffs on the issue, finding that (1) a reasonable consumer could be deceived because the disclaimer was difficult to read and blocked by the packaging (the judge specifically noted that the statement was printed on a metallic background, which could be obscured by light, while the packaging submitted to the Alcohol Tobacco Tax and Trade Bureau (“TTB”) was printed on a matte background); (2) product statements referencing German “Purity Laws” might be misleading to the average consumer, even if true; and (3) product statements referencing German “Quality” were not “puffery” as a matter of law.
Notably, the injunction Beck’s agreed to addresses only the first of these issues, and we have to wonder whether the judge’s decision on the motion to dismiss would have been different had the disclaimers appeared more prominently or on the matte background approved by the TTB. These two settlements certainly serve as a warning for nationwide sellers to consider the more prominent display of the products’ origin on products and packaging, if the product labeling is potentially obscured.
Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at firstname.lastname@example.org /212-969-3240 or email@example.com /212-969-3671. We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.