Case Foster’s Beer is an Australian-style beer brand owned by MillerCoors, a Delaware corporation headquartered in Chicago, Illinois. William and Ralph Foster brewed the first batch of Foster’s Beer in Melbourne, Australia, in 1887. In 1972, Foster’s began exporting beer to the United States in unique containers—25.4 ounces in capacity and shaped like motor oil cans—that earned the nickname “Foster’s Oil Cans.” The can labels sported “multiple references to Australian culture and symbols”—namely, “an image of a Red Kangaroo, the national symbol of Australia, and the Southern Cross constellation,” which is “a main component on the Australian national flag.” In 2011, Foster’s USA LLC assumed responsibility for brewing all Foster’s Beer sold in the United States and relocated the US brewing facilities, Oil Can Breweries, to Fort Worth, Texas. All Foster’s Beer sold in the United States is thus domestically brewed.
In 2012, MillerCoors became the sole owner of Foster’s USA LLC. MillerCoors currently offers bottles and cans of domestically brewed Foster’s Beer that are “almost identical [in design] to the imported variety that was previously sold.” In 2016, Leif Nelson filed a complaint against MillerCoors alleging deceptive advertising on behalf of him and nationwide class consisting of other consumers who purchased Foster’s Beer. According to Nelson, MillerCoors is tricking consumers “into believing they are purchasing the same [imported] product as they had in the past” precisely because it has maintained the same packaging for Foster’s over time, despite the fact that the Foster’s sold in the United States is also brewed domestically.
JUDGE KUNTZ Plaintiff brings deceptive advertising claims under New York GBL sections 349 and 350, which prohibit “[d]eceptive acts or practices in the conduct of any business” and “[f]alse advertising in the conduct of any business,” respectively. A “deceptive act” is any act “likely to mislead a reasonable consumer acting reasonably under the circumstances.” This broad definition encompasses MillerCoors’s dissemination of the materials Plaintiff pleaded reliance on, namely Foster’s Beer packaging, including the labels, and historical information about Foster’s Beer. MillerCoors contends, first, that Plaintiff’s GBL claims are barred under applicable safe harbor provisions, and second, even if they are not, the claims are objectively unreasonable. Because the Court determines no reasonable consumer would be deceived by the advertisements, the Court need not determine whether the safe-harbor provisions apply.
To establish a prima facie case under either section 349 or 350, “a plaintiff must demonstrate that ‘(1) the defendant’s deceptive acts were directed at consumers, (2) the acts are misleading in a material way, and (3) the plaintiff has been injured as a result.’” The reasonable consumer standard applies to section 349 and 350 claims, meaning challenged conduct must be “materially deceptive or misleading ‘to a reasonable consumer acting reasonably under the circumstances.’”
MillerCoors argues Plaintiff’s claims must be dismissed because the allegedly deceptive representations would not have misled a reasonable consumer.
Specifically, MillerCoors argues that “[n]either the labeling that Plaintiff claims to have encountered, nor the oblique ‘history’ of the brand, makes any express claim that the MillerCoors product is brewed in, and/or imported from, Australia” and that “[t]he label explicitly states that it is not.” Plaintiff first counters that this question is not appropriate for a motion to dismiss. But “[i]t is well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer.” Plaintiff further argues that the disclosure as to brewing location does not remedy the confusion caused by the rest of the challenged representations. The idea that consumers purchase products based on certain of a label’s statements or images (e.g., pictures of a constellation and a kangaroo) but are blind to others (e.g., a statement in plain English of where Foster’s Beer is brewed) in close proximity on that label strains credibility.
The Second Circuit has made it clear that “the presence of a disclaimer or similar clarifying language may defeat a claim of deception.” Whether or not a disclaimer defeats a claim of deception requires an analysis of “factors such as the font size and placement of the disclaimer as well as the relative emphasis placed on the disclaimer and the allegedly misleading statement.” Plaintiff’s argument as to the inadequacy of the Foster’s Beer disclaimers relies on the Ninth Circuit’s decision in Williams v. Gerber Products. Co., in which the court stated “reasonable consumers should not be expected to look beyond misleading representations on the front of the box to discover the truth from the [disclaimer] … in small print on the side of the box.” But Plaintiff’s argument ignores the general rule, articulated by Williams and other cases, that disclaimers fail to cure allegedly misleading representations on the front of packaging only where the alleged misrepresentation is clearly stated and the disclaimer is exceedingly vague or requires consumers to make inferences.
Foster’s Beer labels contain an explicit disclaimer as to the place of production—“BREWED AND PACKAGED UNDER THE SUPERVISION OF FOSTER’S AUSTRALIA LTD, MELBOURNE, AUSTRALIA BY OIL CAN BREWERIES, ALBANY GA AND FORT WORTH TX” is displayed on every bottle and can—so consumers need not read a long list of items and make inferences as to the beer’s place of origin, as the Williams plaintiffs did. Further, “© Oil Can Breweries, Fort Worth, TX” is displayed on the Foster’s webpage, which is inarguably clear as to the brewing location. Contrary to Plaintiff’s assertion, this is not a case like Marty v. Anheuser-Busch Cos., LLC, where “the ‘Product of USA’ disclaimer, [wa]s not visible to the consumer at the time of purchase.” Unlike the product at issue in Marty, Foster’s Beer “utilizes no exterior packaging” that would obstruct the disclaimer. Nor is this a case like Singleton, in which the court found that a disclaimer explaining the allegedly misleading “handmade” claim was “not on the labels.” Rather, every single representation Plaintiff pleaded reliance on, across every medium, is accompanied by language indicating the beer is brewed in the United States. In sum, the images of a kangaroo and a constellation “and allusion to the company’s historic roots in [Australia] are eclipsed by the accurate disclosure statement.”
Defendant’s motion to dismiss is GRANTED.
CRITICAL THINKING:
What are the primary facts of this case? Is there any missing information you would call for to better enable you to evaluate the court’s reasoning? What evidence does the court use to support its decision? Are you persuaded by this evidence?