In case you don’t remember, back in 2013 we shed some light on a series of class action lawsuits that were filed against Anheuser (AB InBev) alleging that water was added to beer to produce an alcohol content lower than what was stated on the labels. The claims of the initial lawsuits quickly shrunk from a 3% reduction in alcohol content to a 0.3% reduction as news outlets investigated and found that the initial claims were bogus. A variation from displayed product alcohol content that is within the federally authorized levels for content statement variation. (CNN even tested the beer to confirm it)
The news outlets interviewing some of the attorneys involved noted that the attorneys claimed their allegations stemmed from information directly received from Anheuser employees. While the lawsuits quietly died off for the brewer, they were apparently just beginning for those mystery employee(s).
Anheuser brought suit in 2013 against one of the employees for misappropriation of trade secrets and breaching a confidentiality agreement (you can read the complaint here). Drawing a connection between the lawsuits over the watered down beer class-actions and his free speech rights, the defendant eventually appealed and won the right to have his claims considered protected activity under California’s Anti-SLAPP statute with the 9th Circuit reversing the lower court and remanding the case for consideration under the Anti-SLAPP statute.
In a true showing that you cannot count your chickens before they’re hatched, especially where remanded cases are concerned, the trial court denied the Anti-SLAPP contentions made by the defendant last week, opening the way for the defendant to once again file an interlocutory appeal.
SLAPP suites – “Strategic Lawsuits Against Public Participation” – are lawsuits brought to chill free speech or a person’s right to petition their government. Given that lawsuits cause severe economic stress on any defendant who needs a team of lawyers to defend against meritless claims, many states have enacted Anti-SLAPP statutes allowing for a quick dismissal if a defendant can prove that someone is suing them for a meritless claim based on something they said to cause them economic harm for speaking out and to try an silence them. Think “the Insider”.
In this case, the defendant tried to have the claims Anheuser Busch made dismissed for these very reasons. (You can read the opinion here.) Reviewing each of Anheuser’s claims against the defendant, the District Court found that it was unlikely defendant would prevail on the merits in their trade secrets and breach of contract claims. The court also found that the defendant’s “whistleblower” claims were belied by the fact that the defendant did not reveal the alleged wrongdoing to a governmental agency, but instead revealed the secrets to a group of attorneys to help them file a class action lawsuit.
With these claims denied, the defendant will undoubtedly appeal this determination to the 9th circuit … again.
Interestingly, nothing in the opinion remarks on the 2016 dismissal of the false advertising lawsuits against the brewer.
Of note for those considering their confidentiality and trade secrets policies in the food and winery, brewery, and distillery spaces, the court upheld arguments made by Anheuser that the “brewing process” including specific formulas or techniques not generally known to the public or competitors are trade secrets – in spite of allegations that the techniques and specifications were somewhat widely disseminated and posted on company bulletin boards.