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Weak Beer Case Against Anheuser-Busch Nixed

CLEVELAND (CN) - Even if Anheuser-Busch intentionally waters down its beers, its compliance with federal regulations shields it from civil litigation, a federal judge ruled.

"If the perceived injustice at issue in this case is as important to plaintiffs as they have suggested through the course of this litigation, they can make their concerns known to [federal regulators] and lobby for changes in the regulation," U.S. District Judge Donald Nugent wrote last week, dismissing multidistrict litigation consolidated from class actions filed across the country.

The consumers accused Anheuser-Busch of watering down its staple alcoholic drinks including Budweiser, Bud Ice, Bud Light Platinum, Michelob Ultra, Natural Ice and Bud Light Lime, a process that it claims violates the Federal Alcohol Administration Act (FAAA).

"Anheuser-Busch possesses technology that allows it to precisely identify and control the alcohol content of its malt beverages to within 'hundredths of one percent (0.01%),'" but that the company "routinely and intentionally adds extra water to its finished product to produce malt beverages that 'consistently have significantly lower alcohol content than the percentages displayed on its labels,'" the complaint states.

Nugent dismissed the action last week, however, after focusing on Section 7.71(c) of the FAAA, which states: "For malt beverages containing 0.5 percent or more of alcohol by volume, a tolerance of 0.3 percent will be permitted, either above or below the stated percentage of alcohol."

Anheuser-Busch contends - and the plaintiffs never disputed - that its products are within the 0.3 percent articulated in the FAAA, the court found. The claims thus turned on any profits gained from the alleged knowing misrepresentation of alcohol content on beer labels.

"The problem is that the regulation itself does not distinguish between intentional and unintentional variances from the stated percentage," Nugent wrote. "Neither does it identify any circumstances or exceptions that would preclude application of the 0.3 percent tolerance for any malt beverages containing more than 0.5 percent alcohol by volume. There is no stated or referenced exception based on intent, actual knowledge, precision of available measuring technology, or the size and profitability of the manufacturer."

Nugent shot down demands to use the court's "interpretive and equitable powers to create an exception to the tolerance when a misstatement of alcohol content, no matter the degree, is knowing or intentional."

"A court cannot add language to a regulation that is unambiguous on its face, nor can it import or manufacture exceptions that were not included by the enacting agency," he wrote.

"If a regulation or piece of legislation is not desirable, does not match the will of the citizens, or was, for any other reason, improvidently enacted or articulated, the legislative body has the power to revoke it or to modify it to conform more specifically to their intents and purposes," the judge added. "It is not the court's role to presume their collective intention, second guess their policy choices, or save them from their own mistakes or misstatements."

Nugent also rejected claims that the allegedly watered-down beer violates the governing principles of the Alcohol and Tobacco Tax and Trade Bureau, formerly known as the Bureau of Alcohol Tobacco and Firearms, to prevent any misleading or false information on consumer labels.

"Section 7.71(c) is easily reconciled with the FAAA/TTB implementing statutes and regulations, if we simply accept that the TTB has reasonably determined that a stated alcohol content accurate to within a 0.3 percent in either direction provides adequate information to identify the nature and quality of the product, and that any variation within that range is not significant enough to be considered misleading and/or deceptive," Nugent wrote, abbreviating the bureau's name.

Likewise the plaintiffs failed to show that the court should not afford the word "tolerance" its ordinary meaning, instead considering it as "a term of art that allows only 'unintentional deviations' from the goal of absolute accuracy."

"Plaintiffs have offered no legal or industry specific authority for this proposition," Nugen wrote. "They have offered no source from the TTB or any other agency related to the regulation of alcoholic beverages and/or labeling standards in any food or beverage industry. They have failed to cite any definition of the word 'tolerance' in any dictionary, manual, handbook, or other source that limits the word 'tolerance' to the acceptance of 'unintentional deviations.'"

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