Whacky details published in Kona Brewing “not made in Hawaii” false advertising lawsuit – $2.9 Million in attorneys’ fees, publication in National Geographic. Bonus: we’ve got the motion for you.
It will come as no surprise that no real action has to be taken by Craft Brew Alliance’s Kona Brewing as there wasn’t really a deception here. Here’s the brief filed by class counsel in support of the settlement with all the details and exhibits.
At the end, the attorneys are asking for $2,900,000.00 in fees and have estimated that they thing between 78,000 and 546,000 people will file claims, which, if undocumented can net them up to $10.00. Here’s the proposed payout:
That 78k to 546k has no basis, they put forth some claimed “comparable” class actions for beers with greater sales that had roughly 100k claims filed and in one, tracked what percentage the claims were to the potential class (in this case the class is estimated at 7.8 million – again with no real substantiation) and use that ration to get to these proposed numbers. In looking at the other cases they cite – my best guess is that it’s less than 78,000 claims, so – assuming the best case scenario of $10 – at most – $780,000 gets paid out.
Kona will be required to put the names of the breweries where the beer is made – all the beer, not the specific brewery of the beer in the package – which they do on the side of their bottles now, see:
Which is why there’s no harm here. They pretty much already did this.
Here’s how that’s presented in the motion:
To the extent permitted by law and/or regulation, CBA shall include a conspicuous statement on all consumer-facing Kona Beer packaging on a panel other than the bottom of the package that lists each location where the Kona Beers are brewed or lists the location or locations at which a particular Kona Beer is brewed, for a minimum of four years after the Effective Date. Settlement Agreement, ¶ 78(a). An exemplar mock-up of the new packaging is attached Settlement Agreement as Exhibit 7. Id. In addition, for a minimum of four years after the Effective Date, CBA’s General Counsel or his or her designee shall conduct annual meetings with CBA’s marketing department to review and comply with the injunctive terms of this Settlement. Id. ¶ 78(b).
Here’s what that actually looks like:
Again, a statement they already made on the side of the cans and bottles.
So what else?
- Well, for starters, they’re looking to take the certified California classes and make them national (this will actually help CBA as it means they won’t be faced with copycat suits in other states).
- The national publication they’re proposing to advertise the notices in is … National Geographic (yes, apparently they still publish a magazine). No word on why NG and not some national newspaper or several alcohol publications. Also, while the motion proposes also advertising online, there’s no mention of which websites (hopefully not NatGeo again), so confirming that they’re actually attempting to reach beer buyers is a little hard as they don’t say they’re publishing on Untapped or Beer Advocate.
- Kona will need to change the invitation to its Hawaii locations on the packaging to read “Since 1994, Kona Brewing Co. has been committed to making craft ales and lagers of uncompromised quality. Come visit us at our Hawaii Brewery & Pub in Kailua-Kona, or at our pub on Oahu! Mahalo!”
- There’s a funny admission in the motion where the attorneys claim first that the class may be as large as 7,800,000 people and then say that they can get CBA to confirm there are around 700 as that’s the number CBA can practically confirm since it’s a wholesaler and not a retailer selling to consumers. No mention in the relief of CBA telling its wholesalers to ask retailers to simply post the required notices in their stores so consumers are informed.
Protecting consumers is a noble cause, but this doesn’t seem like it’s accomplishing anything beneficial.
So with regards to putting multiple locations on the label, I had issues with getting COLAs approved that way, where our contract brewery location and our brewery location was in the label.
I think it gets even trickier than that as false advertising laws and the TTB approval process aren’t in line and TTB approval isn’t a safe harbor. So what if a company puts “brewed and canned by company” on its cans but those are actually contracted and made by the contract brewer FOR the company? There’s potential liability there. The safer thing is to avoid that and not dictate that the contract brewer use the vanity name (likely an authorized trade name) and just say “brewed and canned by contract brewer for company”.