FORT MYERS – A Florida federal court has decided that a class action suit claiming the maker of Fireball cinnamon whiskey and cinnamon malt beverage deceived consumers by marketing the malt beverage liquid in miniature bottles resembling whiskey shot bottles may proceed, after it is once again amended.
U.S. District Court for the Middle District of Florida Judge John E. Steele issued that ruling on June 18, in litigation brought by Victor Puig (individually and on behalf of all others similarly-situated) versus Sazerac Company, Inc.
The case began when Puig took note of the similar style of bottles in which the defendant sells its Fireball-brand cinnamon whiskey and cinnamon malt beverages. Though packaged in similar-looking containers, the cinnamon whiskey has an alcohol-by-volume of 33%, whereas the cinnamon malt beverage measures at half of that amount, or 16.5%.
Due to the similarity in packaging, the suit asserted Puig bought the cinnamon malt beverages on several occasions between 2022 and October 2023, expecting them to the cinnamon whiskey instead – and that had he known how to tell the beverages apart, he either “would not have paid as much for the malt beverage, or would not have bought it at all, absent Sazerac’s allegedly ‘false and misleading statements and omissions’ about the product he was buying.
“The first amended complaint asserts two claims against Sazerac. Count I alleges that Sazerac violated Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) by making false and deceptive representations and omissions with respect to the malt beverage and the presence of whisky in the malt beverage. This caused plaintiff to believe the malt beverage product was whisky or at least contained whisky in more than a negligible amount, and to pay a premium price for the malt beverage product. The first amended complaint also alleges in Count II that Sazerac’s conduct violated Florida’s False and Misleading Advertising statute,” Steele said.
“Sazerac moves to dismiss the first amended complaint with prejudice or, in the alternative, to stay the case. Sazerac argues the FDUTPA claim is precluded by its safe harbor provision, is not plead with sufficient particularity, and is not plausible. Sazerac argues that Count II should be dismissed for failure to plead with sufficient particularity. Alternatively, in a footnote, Sazerac seeks to stay or dismiss the case pursuant to the ‘first-filed’ rule. Puig responds that there are no valid grounds to dismiss or stay the case.”
Steele first rejected an “unpersuasive” defense argument claiming the FDUTPA’s Safe Harbor Provision bars the claim involving that federal law, because the malt beverage “has received Certificates of Label Approval (COLA) from the Treasury Department’s Tobacco Tax and Trade Bureau (TTB)” – since, per Steele, “Sazerac does not advance, nor is the Court aware of, any basis upon which the Court can consider the COLA (which has not been submitted to the Court).”
Steele also shot down the defendant’s argument that multiple regulations permitted the complained-of conduct, finding none of the cited regulations established that federal law would OK the parts of the bottle labels being challenged in this case. Rather, Steele decided, those regulations only ensured the defendant had to get approval for COLAs from the TTB, not that it did so, and further, that the regulations didn’t specify whether or not they permitted the conduct at issue.
However, Steele put forth that another law, the Federal Alcohol Administration Act (FAAA) did in fact cover the majority of the complained-of conduct in question and forbids packaging and labeling of any distilled spirits or malt beverages “in a manner which misleads consumers, irrespective of falsity, with respect to their identity or quality.”
Puig’s suit claimed the Fireball malt beverage violated the FAAA in six different ways: Its brand name, the similarities between bottles, brand name qualification, alcohol content, the bottle’s statement of composition, and display cases.
This led Steele to examine each of these six criteria.
“The regulations do indeed mandate that ‘the malt beverage label must include a brand name,’ and the label only needs to ‘be qualified with the word ‘brand’ or with some other qualification if the appropriate TTB officer determines that the qualification dispels any misleading impression that might otherwise be created.’ The first amended complaint does not allege that an appropriate TTB officer determined that the qualification was needed to dispel any misleading impression that might otherwise be created. Since inclusion of the brand name was mandated and the inclusion of a qualification was not triggered, Puig cannot base his FDUTPA claim on the presence of the word ‘Fireball’ without qualification,” Steele said.
“Sazerac does not point to, and the Court is not aware of, any regulations that mandate or specifically permit similar bottles to contain dissimilar beverages, as alleged here. To the contrary, the regulations suggest their purview is limited to the product submitted for approval and not other products. Puig can argue that bottle similarities between the two different beverages is misleading, but not that the brand name is misleading. Alcohol content is indeed mandated information. Therefore, it is subject to specific formatting, language and location requirements. Therefore, Puig cannot argue the malt beverage’s alcohol content is illegible because it is on the back of the container in small red font over a black background. Puig’s argument would ‘create new obligations, or to broaden existing obligations, when a defendant's conduct is already in compliance with federal law or regulations.”
Steele furthered his opinion by continuing to look at the criteria factors involved.
“The first amended complaint’s fifth reason is that the malt beverage’s statement of composition – ‘Malt Beverage with Natural Whisky & Other Flavors and Caramel Color’ – is misleading because it is in the smallest allowable size, among other things. Because each part of the sentence is either mandated or specifically permitted by the regulations, the statement of composition enjoys safe harbor. In this case, the statement of composition is mandatory information. The regulations mandate the drink be described as a ‘malt beverage.’ It also specifically permits the use of the word ‘with.’ The phrase ‘Natural Whisky & Other Flavors’ is also specifically permitted. So too is ‘Caramel Color.’ And finally, ‘all parts…must appear together’ and abide by the same formatting and location requirements as all other mandatory information. Therefore, Puig cannot successfully argue the statement itself or its formatting makes the malt beverage label misleading,” Steele said.
“The first amended complaint’s sixth and final reason is that display cases at retailers selling the malt beverage describe it as ‘shots’ and often sell it with mini ‘shot’ cups, furthering the misleading impression it is whisky. For the same reasons Puig can argue similarities between the malt beverage and the whisky beverage bottles misleads, he can argue the malt beverage is misleading because it is sold at retailers describing the drink as ‘shots’ alongside mini shot cups. Sazerac again points to no authority, and the Court is not aware of any, that mandates or specifically permits display cases at retailers to describe the malt beverage as ‘shots’ and to sell the beverage alongside mini ‘shot’ cups, as alleged here.”
Steele further found that Puig had stated his claims sufficiently to meet the heightened pleading standard under Federal Rule of Civil Procedure 9(b).
“The first amended complaint consistently refers to misrepresentations and falsehoods. The Court finds that Puig’s assertions that Sazerac misleads consumers by producing the malt and whisky beverages in nearly identical bottles, describing the drink as ‘shots’ at retailers, and selling it at retailers alongside mini-shot cups sound in fraud. Therefore, Puig must comply with Rule 9(b)’s heightened pleading standard as to its FDUTPA claim. The Court further finds that the first amended complaint is sufficiently pled. It identifies the precise misrepresentations allegedly made: the labeling of the malt beverage in a bottle ‘with identical colors, themes, fonts, graphics and other matter, such as the Fireball Dragon logo, the iconic red cap, and ‘charred’ label edges’ as the whisky beverage and selling it alongside ‘mini ‘shot’ cups’ while describing it as ‘shots’. The first amended complaint identifies the ‘Defendant’ as the one causing the alleged misrepresentations and omissions, and specifies the defendant is ‘Sazerac Company, Inc…a New Orleans corporation with a principal place of business in Kentucky,” Steele said.
“The times and places were identified as ‘between 2022 and Oct. 8, 2023…at grocery stores, big box stores, bodegas, gas stations, warehouse club stores, drug stores, convenience stores, specialty grocery stores, ethnic food stores, gas station convenience stores, and other similar locations....’ The first amended complaint asserts the alleged misrepresentations made ‘plaintiff believe the product was Fireball Cinnamon Whisky and contained whisky, in more than a negligible amount,’ which Sazerac benefited from because it charged a ‘price premium for the product…’ This fulfills 9(b)’s purpose of ‘alerting defendant to the precise misconduct with which [it is] charged and protecting defendant against spurious charges of immoral and fraudulent behavior.’ This portion of Sazerac’s motion is denied.”
However, while Steele rendered that Puig had properly pled claims made under Florida’s False and Misleading Advertising Statute, the judge added that Puig had not put forth sufficient claims to sue under the FDUTPA.
“To the extent Puig attempts to assert per se FDUTPA violations by quoting and citing federal labeling regulations, such efforts fail. These regulations do not provide Puig with grounds to sue Sazerac under FDUTPA. To the contrary, these regulations are inapposite or limit Puig’s ability to sue Sazerac, as explained in the Court’s FDUTPA Safe Harbor analysis,” Steele said.
That analysis provides that the FDUTPA “does not apply to an act or practice required or specifically permitted by federal or state law.”
Steele concluded that the first amended complaint would be dismissed without prejudice and Puig would be granted leave to file a second amended complaint within 14 days of his order.
That second amended complaint would not, Steele explained, be permitted to “advance a FDUTPA claim based on the malt beverage’s brand name, statement of composition, alcohol content or cited regulations herein” and “shall also correct any scrivener errors.”
U.S. District Court for the Middle District of Florida case 2:23-cv-00856
From the Florida Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com