Court certifies class action in Kona Brewing “not from Hawaii” false advertising lawsuit – Kona appeals.

We’d previously reported on the Kona Brewing false advertising lawsuit where a Kona purchaser brought suit against Kona claiming he wouldn’t have paid the premium for the beer and would have bought something else if the Kona packaging hadn’t led him to believe the beer was brewed in Hawaii, when, in reality, it’s brewed at a myriad of locations in the U.S.

The Kona suit is part of a broader recent trend in food and beverage advertising litigation coming on the heels of several lawsuits filed in recent years regarding claims of false designation of origin, location or provenance of food and drink on packaging or in advertising.

Some of the recent beer suits have involved claims that Red Stripe packaging was misleading when the beer was not brewed in Jamaica, Becks not being made in Germany, and Foster’s beer not being brewed down under. You might not think this applies to craft beers too often, but I’ve seen brewers make claims about being a NYC beer when they brew in a suburb. The Kona suit is even more insidious for anyone that contract brews as that’s the issue – some Kona is still made in Hawaii, it’s just the Kona the Plaintiff was buying in the U.S. wasn’t.

In the Kona suit, the last real eventful ruling had been the fact that the Judge had granted in part but also denied in part a motion to dismiss with this opinion which meant the case wouldn’t go away for Kona. The Plaintiff then filed an amended complaint (you can (and should) read a copy of it here, as it is one of the better forms of a false advertising class action complaint). Typically, in class actions, the failure to reach a settlement after the motion to dismiss stage means that the plaintiffs will be proceeding with discovery regarding the matter and the class and seek certification for the putative class of plaintiffs they want to represent. It’s also typical that following a certification, the parties will reach a settlement given that the potential liability has been increased by a factor of the number of class members since the case generally then involves the possibility of exorbitant damages as opposed to the individual damages of a single plaintiff or a small group of plaintiffs.

Well, a short while ago, that very thing happened. The Court granted the Plaintiffs motion to certify the class in this case.

You can read the order granting the certification of the class here. The opinion helpfully details the alleged facts in the matter and lays out the case history. It also demonstrates the extreme amount of discovery, particularly expert opinion testimony, that the parties have developed in pursuing this action. There were two classes that the Court certified – basically twelve pack purchasers and six pack purchasers, defined specifically in the opinion as:

1. Six-Pack Class:

All persons who purchased any six-pack bottles of the Kona Beers in California at any time beginning four (4) years prior to the filing of this action on February 28, 2017 until the present.

2. Twelve-Pack Class:

All persons who purchased any twelve-pack bottles of the Kona Beers in California at any time beginning four (4) years prior to the filing of this action on February 28, 2017 until the present.

The classes are for purchasers of the following Kona beers – each alleged to have the misleading packaging/labeling:

Longboard Island Lager, Hanalei IPA, Castaway IPA, Big Wave Golden Ale, Lemongrass Luau, Wailua Wheat, Fire Rock Pale Ale, and Pipeline Porter.

Shortly after the Court certified the Class, Kona – Craft Brew Alliance – filed a petition for leave to appeal the decision with the 9th Circuit. You can read a copy of the petition here. It argues that the decision to certify the class was in error based on some of the particular findings the District Court made. Tellingly, Craft Brew Alliance has a different view of the assertions made by the Plaintiffs and proposes that the Court consider this characterization of the Plaintiff’s (now Plaintiffs’) claims:

Plaintiffs claim that packaging of certain Kona six-and twelve-packs deceives consumers into believing all Kona beer is brewed exclusively in the State of Hawaii. Despite the fact that Kona’s packaging does not contain the statements “brewed in Hawaii” or “brewed exclusively in Hawaii,” Plaintiffs contend that the Hawaiian imagery on the packaging improperly suggests that Kona beer is brewed exclusively in Hawaii. Plaintiffs claim that they and the class have unjustly paid a price premium for beer, because it is actually brewed in several locations throughout the continental United States.

This case presents some particularly troubling issues that those contract brewing or brewing at locations that are different from what may be represented on packaging or labeling will want to follow. Additionally, given that claims about methods of manufacturing and particular sources of ingredients (real mountain water) are also percolating for distilleries and breweries and wineries, reviewing website claims and advertising and packaging copy and claims is an important part of due diligence in bringing your products to market. It’s an important step in removing some pretty standard causes of action that are used in these types of cases.

Given recent 9th Circuit decisions on class certifications, and the assertions that novel methods of calculation and analysis were used in reaching the decision in favor of certification, it’s likely we’ll see this petition for appeal granted so the Court can address some of these points.