Panel Sympathetic to Budweiser in Spat Over Corn Syrup Ads

CHICAGO (CN) – The Seventh Circuit was critical Monday of MillerCoors’ false advertising claims against Anheuser-Busch over multimillion-dollar Bud Light advertisements claiming that Miller Lite and Coors Lite contain corn syrup, pointing out that Miller itself lists corn syrup as an ingredient in its beers.

In this March 2015 photo, newly filled and sealed cans of Miller Lite beer move along on a conveyor belt at the MillerCoors Brewery in Golden, Colo. (AP Photo/Brennan Linsley, File)

During this year’s Super Bowl, Anheuser-Busch introduced a new ad campaign stating that Miller Lite and Coors Lite are “brewed with” corn syrup, whereas Bud Light is made with rice. Since the Super Bowl, the television ads have run hundreds of times, accompanied by billboards nationwide with ad slogans such as “Bud Light contains 100% less corn syrup.”

MillerCoors sued over the ad campaign, alleging that Anheuser-Busch falsely insinuated that Miller’s flagship beers contain corn syrup – often confused with high-fructose corn syrup, a sweetener linked to diseases – when the corn syrup used in its fermentation process is consumed by yeast, and therefore absent in the final beverage.

A federal judge in Wisconsin granted Miller a partial injunction in May, prohibiting Anheuser-Busch from running all but one of its Super Bowl ads, but Miller appealed to the Seventh Circuit because the judge did not find that Anheuser-Busch’s ads intended to deceive consumers.

Miller’s attorney Donald Schott with Quarles Brady told the Seventh Circuit at oral arguments Monday, “We are here to ask the court to adopt an intent element. Budweiser intended to mislead consumers about the contents of Miller’s beer.”

But U.S. Circuit Judge Frank Easterbrook immediately interrupted Schott’s argument to raise jurisdictional issues about both the appellate and lower court’s jurisdiction in the case because the district judge never entered a separate injunction.

“We may have to put this appeal, I hate to say it, on ice until we get this issue sorted out,” Easterbrook said, after berating both sides for failing to request the lower court comply with Rule 65 of the Federal Rules of Civil Procedure and requesting supplemental memos addressing the issue.

Turning to the merits, U.S. Circuit Judge David Hamilton asked Schott, “What does the record say about how the starch source in beer affects the taste?”

The judge noted that Miller ran an ad in the New York Times after the Super Bowl that credited its use of corn syrup for Miller Lite’s taste. And its website links to articles from Food & Wine, Men’s Health and other publications arguing that there is no health difference between using corn syrup or rice as a brewing ingredient.

“If you’ve got Miller crediting corn for the good taste of its beers, why can’t Anheuser-Busch say what you’ve been saying, but with a sneer?” Hamilton asked.

The panel was also unanimously confused that Miller now claims corn syrup is not present in its beers when the company lists corn syrup as an ingredient in Miller Lite and Coors Lite on its website.

“If Miller lists an ingredient as in the product, why can’t a commercial rival do the same?” Easterbrook asked.

Schott attempted to explain that listing corn syrup in the ingredients list was an effort to be transparent about Miller’s brewing process.

But Easterbrook shook his head.

“If I see an ingredient listed on the back of a Corn Flakes box, I expect that ingredient to be in the product,” he said.

Easterbrook also tapped his personal knowledge of the brewing process.

“You list yeast as an ingredient,” he said, comparing Miller’s use of yeast to its use of corn syrup. “They can’t all be filtered out. Yeasts are in this product, it’s inevitable.”

Anheuser-Busch attorney James Bennett with Dowd Bennett told the appeals panel, “I don’t think that intent is relevant under the circumstances of this case where the ads are true.”

Bennett further argued, “The Super Bowl ads are true. We have evidence that Miller’s beer contains residual sugars, as Judge Easterbrook suggested, that remain in the final product.”

“To recast true words as misleading is not appropriate under the Lanham Act,” the attorney continued.

However, the panel laughed when Bennett cited the dictionary definition of “made with” to support his arguments.

“Dictionaries are not going to solve this problem,” Hamilton said.

Easterbrook added, “No word has objective meaning on its own. It depends on context.”

Latching on to Easterbrook’s statement on rebuttal, Schott urged the court to keep in mind that “even a literally true statement can violate the Lanham Act because of context.”

U.S. Circuit Judge Amy St. Eve rounded out the three-judge panel.

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