In re Anheuser-Busch Beer Labeling Marketing & Sales Practices Litigation

644 F. App'x 515
CourtCourt of Appeals for the Sixth Circuit
DecidedMarch 22, 2016
DocketNo. 14-3653
StatusPublished
Cited by187 cases

This text of 644 F. App'x 515 (In re Anheuser-Busch Beer Labeling Marketing & Sales Practices Litigation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Anheuser-Busch Beer Labeling Marketing & Sales Practices Litigation, 644 F. App'x 515 (6th Cir. 2016).

Opinion

BOGGS, Circuit Judge.

Various consumers in seven states brought class-action lawsuits with state and federal claims against Anheuser-Busch Companies, LLC (“Anheuser-Busch”), alleging that Anheuser-Busch intentionally overstates the alcohol content [516]*516of many of its malt beverages on those beverages’ labels. After the Judicial Panel on Multidistrict Litigation consolidated the actions into one multidistrict litigation in the Northern District of Ohio, the plaintiffs filed an amended complaint, which sought to certify an additional class of plaintiffs from forty-eight states.

Anheuser-Busch moved to dismiss on the ground that any alleged misstatement of alcohol content, even if intentional, fell within a tolerance of 0.3 percent created by a federal beverage-labeling regulation that has been incorporated into the relevant states’ law. The district court agreed. After observing that the plaintiffs had conceded that all of their claims would fail if Anheuser-Buseh’s alleged misstatements did not run afoul of federal regulations, the court dismissed the plaintiffs’ complaint. For the reasons given below, we affirm the judgment of the district court.

I

Anheuser-Busch brews various malt beverages, among them Budweiser, Bud Ice, Bud Light Platinum, Michelob, Michelob Ultra, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice, Black Crown, and Bud Light Lime. The plaintiffs — individuals who either consume or consumed one or more of these malt beverages — claim that Anheuser-Busch employs sophisticated process-control technology that enables it to precisely measure and control the alcohol content of its malt beverages. According to the plaintiffs, Anheuser-Busch does not use this technology to produce beverages that reflect the alcohol-by-volume content listed on byproducts’ labels. On the contrary, the complaint alleges that Anheuser-Busch “uses its precise knowledge of the alcohol content of its products to deceive consumers.” ■

The plaintiffs explain that Anheuser-Busch adds extra water to its products to dilute the alcohol content to levels below those represented on product labels. As a result, say the plaintiffs, Anheuser-Busch is able to save money on production costs and gain a competitive advantage over other brewers, while intentionally misrepresenting the quality of its products to consumers. The plaintiffs claim that they purchased malt beverages in reliance on the misrepresentations on Anheuser-Busch’s product labels, would not have made those purchases if they had known that the alcohol content was in fact lower than the amount stated on the labels, and ultimately received beer with less value than the beer that Anheuser-Busch promised on its labels.

The plaintiffs sought redress for the harm they allegedly suffered by bringing actions in federal district court in the Northern District of California, the District of Colorado, the Middle District of Florida, the District of New Jersey, the Northern District of Ohio, the Eastern District of Pennsylvania, and the Northern District of Texas. The Judicial Panel on Multidistrict Litigation consolidated the cases into one litigation, which it assigned to the Northern District of Ohio. The plaintiffs then filed an amended complaint, seeking certification of classes of plaintiffs residing in each of the seven states. Each class of plaintiffs sought relief under state consumer-protection and — with the exception of the Florida plaintiffs — warranty law, as well as Section 109(d) of the federal Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. §§ 2301-2312, which creates a federal cause of action for the violation of a warranty implied by state law, see id. §§ 2301(7), 2310(d)(1)(B). The plaintiffs also proposed a new nationwide class comprising residents of all forty-eight contiguous states, which alleged violations [517]*517of the law of Missouri, where Anheuser-Busch maintains its principal place of business.

Anheuser-Busch moved to dismiss on the ground that the plaintiffs failed to state a claim upon which the district court could grant relief. Anheuser-Busch argued that because the plaintiffs never alleged that it had overreported the alcohol content in its malt beverages by more than 0.3 percent, Anheuser-Busch fully complied with state and federal regulations governing alcoholic beverages, thereby precluding liability under state consumer-protection law. In particular, Anheuser-Busch pointed out that a federal regulation codified at 27 C.F.R. § 7.71 explicitly allows the alcohol content of the malt beverages in question to diverge by up to 0.3 percent from the alcohol content stated on the beverages’ labels. See 27 C.F.R. § 7.71(c)(1). And although states may impose their own labeling regulations with no tolerance or a tolerance more forgiving than that set forth in § 7.71, see id. § 7.71(a), each of the eight states whose law is in question has adopted that federal tolerance of 0.3 percent into state law. Drawing on the principle of statutory construction “that the specific governs the general,” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 384, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992), Anheuser-Busch argued that because the plaintiffs’ “general” consumer-protection and warranty claims conflicted with the “specific” state and federal beverage-labeling regulations that allow for a variance of up to 0.3 percent, its compliance with the latter regulations precluded the former claims. An-heuser-Busch also pointed out that many of the states have statutory or common-law safe-harbor rules, which exempt from consumer-protection law any conduct permitted' under state or federal law. And because Section 109(d) of the MMWA simply provides a federal claim based on a breach of a state-law warranty, see 15 U.S.C. §§ 2301(7), 2310(d)(1)(B), Anheu-ser-Busch argued that the plaintiffs’ federal warranty claims should fail, as well.

After reviewing two additional written submissions from each party and hearing oral argument, the district court granted Anheuser-Busch’s motion to dismiss. The court first observed that “Defendant has asserted, and Plaintiffs have not contested, that if the Court finds that Anheuser-Busch’s alleged over-reporting of alcohol content is permitted under 27 C.F.R. § 7.71(c), this action must be dismissed.” The court explained that “Plaintiffs have not disputed this premise in aujr of their briefing, and Plaintiffs’ counsel explicitly conceded this point at oral argument.” The court then turned to § 7.71 and examined the plaintiffs’ contention that the plain language of the regulation prohibits An-heuser-Busch from intentionally targeting the lower end of the statutory tolerance.

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Bluebook (online)
644 F. App'x 515, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-anheuser-busch-beer-labeling-marketing-sales-practices-litigation-ca6-2016.