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Sixth Circuit Dumps Watered-Down Beer Case

CINCINNATI (CN) - A slight variance in a beer's labeled alcohol content and the actual alcohol amount by volume, even an intentional one, does not violate federal law, the Sixth Circuit ruled Tuesday.

Several classes of consumers lost their appeal against Anheuser-Busch after the Cincinnati-based appeals court ruled that nothing in the language of Federal Alcohol Administration Act (FAAA) regulations "distinguishes intentional from unintentional variances within the applicable tolerance of 0.3 percent."

The beer drinkers argued for an "intent-based" reading of the statute, rather than the plain language interpretation adopted by the lower court, but the Sixth Circuit's three-judge panel was unmoved.

The FAAA provision in question states that "[f]or malt beverages containing 0.5 percent or more alcohol by volume, a tolerance of 0.3 percent will be permitted, either above or below the stated percentage of alcohol."

The classes of consumers, spread out across seven states, claimed that "Anheuser-Busch adds extra water to its products to dilute the alcohol content to levels below those represented on product labels...to save money on production costs and gain a competitive advantage over other brewers, while intentionally misrepresenting the quality of its products to consumers."

Judge Danny Julian Boggs wrote Tuesday that the Bureau of Alcohol, Tobacco and Firearms "determined that such small variances are not misleading to consumers." He also rejected the consumers' argument for an intent-based reading of FAAA regulations.

"The plaintiffs fail to explain why the producer's intent would have anything to do with whether a label that does not reflect the correct alcohol content in a malt beverage 'tends to create a misleading impression' to consumers," Boggs wrote for the panel. "In other words, a customer who is 'misled' by a beverage label that overstates the alcohol-by-volume content of the beverage would be misled irrespective of the producer's intent."

The consumers argued that their state consumer-protection and warranty claims could continue even with the dismissal of their federal Magnuson-Moss Warranty Act claim, but the Sixth Circuit disagreed.

The panel noted their failure to properly contest, at any point in the proceedings, Anheuser-Busch's argument that all of their claims would fail if the federal warranty claim was dismissed.

Judges Damon Keith and Gilbert Merritt Jr. rounded out the panel.

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