Plaintiffs Sara Cilloni and Simone Zimmer filed a putative class action, Cilloni v. Craft Brew Alliance, Inc., in the Food Court (also known as the US District Court for the Northern District of California) against Craft Brew Alliance, the owners of Kona Brewing Company (Kona). Kona was founded in 1995 on Hawaii’s Big Island. Taking pride in the company’s origins, Kona stylizes each of its beers in an overtly Hawaiian theme, inviting customers to enjoy the “Liquid Aloha” and “Catch A Wave.” With names like Big Wave Golden Ale, Longboard Island Lager, and Wailua Wheat, Kona’s products celebrate their history and ties to Hawaiian culture.
According to plaintiffs, however, this branding is merely an elaborate plan to “exploit strong consumer sentiment for Hawaiian-made products.” Plaintiffs allege that the labeling on Kona’s products is false and misleading because, even though Kona was founded in Hawaii and produces beer in Hawaii for that state’s market, none of the beer Kona sells in the continental United States is produced in Hawaii. Thus, Kona “intentionally misleads” its consumers into purchasing Hawaiian beer, when in fact the beer is produced in several states throughout the continental US. According to plaintiffs, consumers “would not have purchased the beer, or would have paid significantly less for the beer, had they known the true origins of the Kona … beer they purchased.” Plaintiffs join an increasing list of litigants claiming that beer labels are false or misleading because a beer with foreign origins is actually produced in the US. The owners of Fosters, Becks, Guinness, and Kirin Ichiban have all faced mislabeling claims.
Fortunately, courts have begun to push back. In Dumas v. Diageo PLC, the plaintiffs alleged that the producers of Red Stripe beer misled consumers into believing that the beer was imported from Jamaica because bottles called the beer “Jamaican Style” and invited drinkers to enjoy “The Taste of Jamaica.” But in dismissing the lawsuit, the district court properly explained that such language did not actually make the claim that the beer was from Jamaica, and that “Taste of Jamaica” was a “vague and meaningless phrase” in which reasonable consumers do not put much stock. Finally, the court pointed to the label itself, noting that it clearly identified the corporate headquarters to be in Pennsylvania.
Similarly, in Bowring v. Sapporo USA, Inc., the plaintiffs alleged that Sapporo’s slogans “Sapporo—the Original Japanese Beer” and “Japan’s Oldest Brand” did not mislead reasonable consumers into thinking that the beer was imported from Japan because the bottles themselves stated that it was brewed in Wisconsin or Canada. Any language stating that Sapporo was “imported” was truthful, as those beers were imported to the United States from Canada. The court thus dismissed the complaint.
The district court should reject the allegations against Kona for the same reasons. Like Red Stripe and Sapporo, Kona chooses to celebrate its history on its labels and packaging. But a reasonable consumer would not see that history and automatically assume that all Kona products are made in Hawaii—especially since all Kona labels truthfully list the various facilities throughout the continental US where the beer is brewed. By invoking the spirit and culture of its founding, Kona distinguishes its product from its competitors, but in no way “falsely advertise[s],” “misrepresent[s],” or “intentionally misleads” its customers.
Until courts forcefully push back on labeling lawsuits, plaintiffs’ attorneys have every reason to continue to bring them in hopes of procuring a quick settlement. While this strategy had some initial success, recently district courts have begun to dismiss the mislabeling claims at the pleadings stage—as they should. Hopefully the case against Kona will join the ranks of dismissed labeling class actions soon.
Also published by Forbes.com at WLF’s contributor site.