District Court Tosses Blue Moon Litigation, Cites the “Puffery” of “Craft”

Evan Parent, a San Diego home brewer and beer aficionado, feels deceived by MillerCoors and its marketing of Blue Moon Belgian-style wheat beer as a “craft beer.” For approximately a year and a half, Parent enjoyed Blue Moon, regularly purchasing it from Ralph’s and Vons grocery stores and 7-11 convenience stores.

Photo Credit: MillerCoors

Photo Credit: MillerCoors

Parent chose Blue Moon because he believed it was a craft beer, a decision he reached by relying upon its advertising, placement among other craft beers, and the premium price charged for it.

In July 2012, Parent learned from friends that Blue Moon was not a craft beer as they defined it, but a mass produced beer made by MillerCoors. Upon verifying those facts, he immediately stopped drinking it.

Parent’s decision to differentiate between “craft beer” and beer brewed by Big Beer is one adopted by many who have taken to the impressive rise in local breweries.

Parent, however, took his displeasure at feeling deceived to a whole different level.  In April, he filed a class action lawsuit in California Superior Court alleging MillerCoors violated certain California laws regarding consumer protection and unfair business practices. (MillerCoors subsequently removed the litigation to United States District Court as is their prerogative under federal rules for class actions.)

On October 22, the court issued a tentative order dismissing Parent’s lawsuit on the basis it lacked sufficient facts to present a viable claim under his asserted causes of action.* In the order, the court provides a useful explanation of the status of “craft” as qualifier in the world of beer.

Among other points, Parent argued MillerCoors’ efforts to conceal its identity as the true brewer of Blue Moon – no indication of MillerCoors on the packaging or at Blue Moon’s website, and listing the brewer as Blue Moon Brewing Co. – along with its use of the trademark “Artfully Crafted” illegally misleads consumers.

MillerCoors countered that its labeling of Blue Moon as brewed by a fictitious brewing company, Blue Moon Brewing Co., complies with federal and California law, thus baring claims under these California consumer protection laws. “Fictitious” as a descriptor is not a dig at MillerCoors. It is California’s term for an assumed business name. Because MillerCoors had properly registered the name “Blue Moon Brewing Co.” as a fictitious business name, the court agreed.

Relying heavily on the Brewers Association’s definition of “craft brewer,” Parent also argued MillerCoors’ use of “Artfully Crafted” deceives consumers into believing Blue Moon is a “craft beer.”  MillerCoors has trademarked “Artfully Crafted” and says it first used the term in 2006.

The Brewers Association defines an American craft brewer as a brewery that must (a) produce less than 6 million barrels of beer annually; (b) be less than 25 percent owned or controlled by a non-craft brewer; and (c) make beer using only traditional or innovative brewing ingredients. (Neither Parent nor his legal counsel has been in contact with the Brewers Association which was unaware of the lawsuit until it was filed, said Paul Gatza, Director of the Brewers Association, in response to an emailed inquiry.)

Because MillerCoors annually brews more than 76 million barrels, Parent argued its efforts to conceal the brewers’ true identity and describe Blue Moon as Artfully Crafted amount to “deceptive and misleading business practices to misrepresent it as a craft beer in order to capture a slice of the burgeoning craft beer market and ‘charge up to 50% more for Blue Moon beer than it charges for other MillerCoors products,'” the court said.

The Brewers Association has done an excellent job driving the conversation to distinguish between craft beer – that brewed by a small, independent and traditional brewer – and that brewed by Big Beer. Aside from a bit of a misstep in 2013 when it briefly published a blacklist of sorts, calling out breweries that did not meet its definition, the Brewers Association successfully turned “craft beer” into a rallying cry for legions of beer fans riding the small brewery explosion.

This definition is created by the Brewers Association’s Board of Directors, designed to serve the trade association’s mission. Yet, as “small” continues to get larger and more automated while favored independent breweries sell to Big Beer, beer fans’ understanding of what counts as “craft beer” is increasingly blurred.

More to the point, the definition is irrelevant to Parent’s claims.  The court explains:

Plaintiff alleges that the reasonable consumer is likely to be deceived by MillerCoors’ use of the “Artfully Crafted” trademark into thinking that Blue Moon is a craft beer. Id. It should first be noted that parties dispute whether or not there is a legal or controlling definition of a “craft beer.” The Court declines to resolve this issue, because even assuming that there is such a definition, Plaintiff cannot rely on it for their argument that the phrase “Artfully Crafted” is misleading. “[T]o be actionable as an affirmative misrepresentation, a statement must make a specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact.”

It’s the last sentence that is the clincher. Capable of being proved false. Reasonably interpreted as a statement of objective fact.

The legal world has a term for phrases like Artfully Crafted: “non-actionable puffery.” Such phrases do not give rise to legal claims because they are ‘‘inherently vague and generalized terms’ and ‘not factual representations that a given standard has been met.” The court provided an example by citing to a case against Apple Computer where terms like “ideal student laptop,” “reliable,” “high performance,” and “durable” were determined to be merely vague and generalized terms. Non-actionable puffery.

Like it or not, consumers are not legally entitled to rely on puffery. “Craft,” it seems, is a descriptor not capable of being proved false or one which can be reasonably interpreted as a statement of objective fact.

That’s not to say similar words and phrases cannot rise to the level of violating consumer protection laws, i.e. actionable.  Fifth Generation, Inc., maker of the popular Tito’s Handmade Vodka, is facing multiple suits over the phrase “handmade in old fashioned pot stills” despite it being mass-produced in automated modern stills. While one court has determined the word “handmade,” standing alone, could not lead to misrepresentation claims, a reasonable consumer could be misled by the phrase “handmade in old fashioned pot stills” because Fifth Generation is making a specific claim about the method of production for its vodka.** (This litigation continues.)

Anheuser-Busch settled a class action lawsuit earlier this month for misleading consumers about the true origin of Beck’s Beer.  Packaging for Beck’s Beer included the phrases “”Originated in Germany,” “German Quality” and “Brewed Under the German Purity Law of 1516.”  While the bottles and cans include the note “Product of U.S.A.,” it was difficult to read from being printed in white font on a shiny metallic background. Further, the notice was not included on the exterior packaging of six and twelve-packs which completely obscured the notice on the bottles. The beer is actually brewed in St. Louis, Missouri.***

Conversely, in Parent’s case against Blue Moon the court concluded “it is difficult to see how the statement that Blue Moon is “artfully crafted” is “capable . . . of being reasonably interpreted as a statement of objective fact.” One can reasonable extrapolate from this decision that “craft,” standing alone, is non-actionable puffery.

According to the Brewers Association, the number of active breweries in the U.S. passed the 4,000 milestone in September. Here in Montana, the 62nd brewery opened last week, an incredible number for a state with barely 1,000,000 residents.

We are in love with beer.  Our local breweries and taprooms provide a connection to local products and the people who make them, all in an environment conducive to enjoying time with friends old and new. It is an experience we seek out.

Nevertheless, the court’s decision in Parent v. MillerCoors reminds us that “craft” as a label means little at all. It is not a production method. It has no accepted definition. Visit enough breweries and you’ll know it is not synonymous with quality.

In the end, “craft” remains only an idea.

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* Parent v. MillerCoors LLC, Case No. 3:15-cv-1204-GPC-WVG (Notice of Tentative Ruling on Defendant MillerCoors’ Motion to Dismiss).  This order was issued in advance of a hearing on the matter, informing the parties of the court’s likely ruling pending any new information which might come out during the hearing. You can download a copy of the order by clicking on this link.

** Pye v. Fifth Generation, Inc. 2015 U.S. Dist. Lexis 128594 (order dated September 23, 2015); Hofmann v. Fifth Generation, Inc., 2015 U.S. Dist. Lexis 65396 (Order dated March 18, 2015).

*** Marty v. Anheuser-Busch Cos., LLC, 2015 U.S. Dist Lexis 144290 (Orders dated September 5, 2014 and  October 22, 2015).

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