(CN) – There are no regulations prohibiting a major brewer from trying to pass off one its products as a “craft beer,” a federal judge said in a tentative ruling.
Evan Parent, who describes himself as a “beer aficionado,” began buying Blue Moon beer in 2011, but stopped in about mid-2012 when he discovered it is made by MillerCoors LLC, which owns widely recognizable labels such as Coors, Miller High Life, Milwaukee’s Best and Hamms.
He says he bought Blue Moon based on “deceptive and misleading” marketing aimed at leveraging the burgeoning “craft” beer market.
Parent claimed in an April 2015 class action, however, that Blue Moon does not meet the criteria for a craft beer because MillerCoors is not a “small, independent and traditional” craft brewery as defined by the Brewers Association, a trade organization for American craft brewers.
Under craft-brewing principles, brewers cannot produce more the 6 million barrels of beer annually, must be less than 25 percent owned by a non-craft brewer and must brew beer using only traditional or innovative brewing ingredients.
In comparison, MillerCoors makes about 76 million barrels of beer per year, according to Parent who says the company charges “up to 50 percent more for Blue moon” based on its bogus craft-beer status.
He also claims the company “goes to great lengths to disassociate Blue Moon beer from the MillerCoors name” by stating on Blue Moon packaging that it is brewed by Blue Moon Brewing Co.
The name is a mask for MillerCoors, which brews Blue Moon at its breweries in Golden, Colo. and North Eden, N.C., according to Parent. He also challenges the company’s use of the registered trademark “Artfully Crafted” on Blue Moon labeling and in advertisements.
Finally, he says, MillerCoors stocks Blue Moon with other craft beers at stores, to help mislead consumers.
He filed a class action against the company in San Diego state court, claiming deceptive practices and misrepresentation in violation of California’s Consumers Legal Remedies Act; untrue and misleading advertising in violation of California’s false advertising law; and unlawful, fraudulent and unfair business practices in violation of California’s unfair competition law.
Miller Coors removed the case to Federal Court in May under the Class Action Fairness Act and filed a motion to dismiss in June, for failure to state claim.
The company argued in part that use of its trademarked Blue Moon Brewing Co. trade name falls within California’s “safe harbor” and that “no reasonable consumer” could have been misled by its “craft beer” and “Artfully Crafted” representations because there is no standard definition of “craft beer.”
U.S. District Judge Gonzalo Curiel agreed in a tentative ruling last week that there is no current regulation barring MillerCoors from placing Blue Moon Brewing Co. on its label instead of MillerCoors.
He said federal law “specifically permit[s] a beer bottle and outer packing to show by label or otherwise the ‘name or trade name’ of the brewer.”
Curiel cited California law, which states that “the true name of a manufacturer, bottler or packager shall be deemed to include a fictitious business name for which such manufacturer, bottler or packager has duly filed a fictitious business name statement pursuant to the provisions of Section 17900 et seq. of the Business and Professions Code,” which MillerCoors has done in California’s fictitious business name registry.
“MillerCoors’ use of the Blue Moon Trading Co. trade name on the Blue Moon label is thus specifically authorized by federal and state regulations,” he said. “The safe harbor doctrine applies to the extent that plaintiff’s unfair competition, Consumer Legal Remedies Act and false advertising law claims rely on MillerCoors’ omission of their ownership interest, or their designation of Blue Moon Brewing Co. as the brewer, on the label or packaging of Blue Moon beers.”
Curiel added that even though the Blue Moon Brewing Co. website makes no reference to MillerCoors, identifying it as a MillerCoors product, the MillerCoors website does list Blue Moon as its own “craft beer.”
“The court cannot conclude that the reasonable consumer, viewing Blue Moon’s identification as a craft beer on MillerCoors’ company website, could be misled into believing that Blue Moon is an ‘independently brewed, hand-crafted beer” not owned by MillerCoors,” he said.
Curiel, however, gave Parent leave to amend.
“The court does not find it impossible that the plaintiff could allege other facts as to MillerCoors’ advertising or sales practices that would support their claim that MillerCoors deceptively or misleadingly represents Blue Moon as a craft beer,” he said. “However, the court cautions that the plaintiff cannot rely on MillerCoors’ use of the Blue Moon Brewing Co. trade name in Blue Moon’s label or packaging for their consumer protections claims. Nor, standing alone, is MillerCoors’ use of the ‘Artfully Crafted’ trademark sufficient.”
Curiel scheduled a hearing for Oct. 23, where additional arguments were presented.
“At Friday’s hearing, our position is that there is more than enough information out there that we did not put in our original complaint that MillerCoors is trying to deceive people, trying to get the average consumer to believe that Blue Moon is a craft beer, so they can charge more than they do for their other products,” Parent’s attorney James Treglio, of Clark & Treglio in San Diego, said on Monday.
In terms of MillerCoors’ alleged strategic placing of Blue Moon in craft beer sections in retail stores, Curiel said there is no evidence and no allegation about who actually places the beer within retail stores.
Treglio said Curiel could potentially issue a final order today and says he plans to more clearly allege some of Parent’s original claims while introducing information that was not included in the initial complaint in a first amended complaint.
MillerCoors’ attorney Julie Hussey, of Perkins Coie in San Diego, said she is not able to comment on the case.
Parent has 30 days after Curiel issues his final order to file an amended complaint.
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