False indication of Hawaiian origin might violate consumer protection law, not warranty

Broomfield v. Craft Brew Alliance, Inc., No. 17-cv-01027, 2017
WL 3838453 (N.D. Cal. Sept. 1, 2017)
“Hawaii is a state as well as a state of mind. When adults
want to escape the mainland, they can go to their local grocery store, purchase
a package of Kona Brewing Company beer, and feel as though they are transported
to the beaches of Hawaii. This case is about the importance of where that beer
actually is brewed.” Defendant CBA, d/b/a Kona Brewing Co., allegedly intentionally
misled consumers into believing that Kona Brewing Company beer was exclusively
brewed in Hawaii.  The court granted in
part and denied in part CBA’s motion to dismiss the resulting claims.
The Kona brand includes a variety of beer that references
Kona’s Hawaiian origins, including “Longboard Island Lager,” “Big Wave Golden
Ale,” “Fire Rock Pale Ale,” “Wailua Wheat Ale,” “Hanalei Island IPA,” “Castaway
IPA,” “Lavaman Red Ale,” “Lemongrass Luau,” “Koko Brown,” and “Pipeline
Porter.” Kona has a Hawaiian brewery that makes its draft beer sold in Hawaii, but
all of its bottled and canned beer, as well as its draft beer sold outside of
Hawaii, are brewed in Oregon, Washington, New Hampshire, and Tennessee.  Despite this, on the top of the box for
twelve-packs of Kona beer there is an image of a map of Hawaii which marks the
location of the Kona Brewing Co. Brewery on the Big Island. The packaging also
includes the statement: “We invite you to visit our brewery and pubs whenever
you are in Hawaii.” An image of the Hawaiian island chain and the phrase “Liquid
Aloha” are embossed on the front of each bottle, and each variety’s packaging
has its own Hawaiian-related images, including orchid flowers,
volcanoes, palm trees, surfers, canoes, waterfalls, and hula dancers. The
bottom of the package for the six-pack includes the image of a Hawaiian island,
such as Oahu, the Big Island, or Molokai. Plaintiffs alleged that the only
address listed on the packaging was “75-5629 Kuakini Highway, Kailua-Kona,
Hawaii 96740,” though CBA indicated that its Island Hopper Variety twelve-pack
included a list of five brewing locations next to the address in Kona.

Plaintiffs also allged that CBA misrepresented Kona as “craft
beer” when it isn’t, though they argued that this claim went to CBA’s intent to
deceive rather than to a deception that they relied upon.
First, CBA argued that the words and images on the packaging
were “mere puffery,” and that no reasonable consumer would be misled into
believing that the Kona beer he or she purchased was brewed exclusively in
Hawaii. The court disagreed. 
Deceptiveness is usually a question of fact.  CBA argued that none of its “references” to
Hawaii was “ a specific and measurable factual statement about where the beer
is made.” The labels disclosde five locations where the beer is brewed, only
one of which is Hawaii, so representations on the six- and twelve-pack
packaging couldn’t amount to actionable misrepresentations. While “pictures of
surfboards and the vague phrase ‘Liquid Aloha’ on the beer packaging” would be
insufficient, the fact that the only listed address on the outer packaging was
Hawaiian, the image of the Hawaiian map identifying the location of Kona’s Big
Island Brewery, and the invitation to visit “our brewery” whenever you are in
Hawaii were “specific and measurable representations of fact that could deceive
a reasonable consumer into believing that the six- and twelve-packs of Kona
beer were brewed in Hawaii.” “[M]erely referencing Hawaii and its culture on
the packaging is not enough on its own to confuse a reasonable consumer regarding
the origin of the beer” (citing Pernod Ricard USA, LLC v. Bacardi U.S.A., Inc.,
653 F.3d 241 (3d Cir. 2011)).  But the
address, map, and invitation went beyond those references to spirit or style.
CBA argued that the disclaimer on the labels of Kona beer was
enough to contradict the representations on the outer packaging. But reasonable
consumers are “not required to open a carton or remove a product from its outer
packaging in order to ascertain whether representations made on the face of the
packaging are misleading.” There was no disclaimer identifying Kona’s brewing
locations on the packaging except on the Island Hopper Variety twelve-pack.  Plus, the disclaimer on the beer label listed five
locations, including “Kona, HI, Portland, OR, Woodinville, WA, Portsmouth, NH,
and Memphis, TN” which encompass “all locations where the beers are brewed.” “A
list of multiple locations on a product label does not amount to an explicit
statement that the beer is brewed and packaged at a particular location.” A
reasonable consumer could easily think that the beer was brewed in Kona—and plaintiffs
alleged that no bottled or canned beer bearing the Kona label was actually
brewed in Kona. Thus, even consumers who read this “vague” disclaimer could be

Label, with locations listed on left side
While the consumer protection claims survived, the express warranty
claims failed because the representations weren’t “an unequivocal statement or
promise to the consumer that Kona beer is brewed exclusively in Hawaii.” The
implied warranty claim also failed without an affirmative misrepresentation;
the factual claims on the label were true, albeit potentially misleading.

Injunctive relief claims were dismissed for lack of standing
(noting that, even if plaintiffs would be willing to buy properly labeled beer
in the future, they alleged they wouldn’t have bought it at Kona’s price/they
paid extra for beer they thought was from Hawaii.)

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