Welk v. Beam Suntory Import Co.

124 F. Supp. 3d 1039, 2015 U.S. Dist. LEXIS 111164, 2015 WL 5022527
CourtDistrict Court, S.D. California
DecidedAugust 21, 2015
DocketCase No. 15cv328-LAB (JMA)
StatusPublished
Cited by17 cases

This text of 124 F. Supp. 3d 1039 (Welk v. Beam Suntory Import Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Welk v. Beam Suntory Import Co., 124 F. Supp. 3d 1039, 2015 U.S. Dist. LEXIS 111164, 2015 WL 5022527 (S.D. Cal. 2015).

Opinion

ORDER OF DISMISSAL

LARRY ALAN BURNS, District Judge.

This putative class action against Beam Suntory Import and Jim Beam Brands [1041]*1041(collectively, “Jim Beam”) centers on the use of the word “handcrafted” on Jim Beam Bourbon bottle labels. Scott Welk’s complaint alleges the labels are misleading because the bourbon isn’t handcrafted. He asserts causes of action for violation of California’s false advertising law, Cal. Bus. & Prof. Code § 17500 et seq. (“FAL”), violation of California’s unfair competition law, id. at § 17200 et seq. (“TJCL”), intentional misrepresentation, and negligent misrepresentation, Jim Beam has filed a motion to dismiss, arguing (1) under California’s safe harbor doctrine, its compliance with federal labeling law insulates it from Welk’s claims, (2) Welk fails to state a plausible claim because he hasn’t alleged facts to show that the label would mislead a reasonable consumer, and (3) the economic loss doctrine bars Welk’s negligent misrepresentation claim. (Docket no. 5.)

I. Background

A. Jim Beam Bourbon Label

Welk includes a copy of the Jim Beam Bourbon label in his complaint. (Docket no. 1 at ¶¶32, 33.) The label covers the front and two sides of the bottle. (Id. at ¶ 32.) One of the side labels includes a depiction of a sketched barrel, with the word “HANDCRAFTED” above the barrel, the phrase “SINCE 1795” next to the barrel, and the phrase “FAMILY RECIPE” below the barrel. (Id.)

B. Alleged Misrepresentation

Welk alleges that, based on the label, he believed “Jim Beam Bourbon was of superior quality by virtue of it being crafted by hand, rather than by a machine, and relied on said misrepresentation in purchasing the product.” (Id. at ¶ 35.) Relying on a definition from Merriam-Webster’s online thesaurus, Welk contends that “handcrafted” means “created by a hand process rather than by a machine.” (Id. at ¶ 70.) Thus, according to Welk, “the reasonable consumer” would believe that "Jim Beam Bourbon was crafted by hand.” (Id.) He explains, “ ‘[hjandcrafted’ and ‘handmade’-are terms that consumers have long associated with higher quality manufacturing and high-end products. This association and public perception is evident in the marketplace where manufacturers charge a premium for ‘handcrafted’ or ‘handmade’ goods.” (Id. at ¶ 17.) But, he alleges, “Jim Beam Bourbon is actually manufactured using a mechanized and/or automated process, resembling a modern day assembly line and requiring little to no human supervision, assistance or involvement....” (Id. at ¶ 36.)

II. Judicial Notice of Label and Certificates of Label Approval

Jim Beam seeks judicial notice of its label and certificates of label approval issued by the Alcohol and Tobacco Tax and Trade Bureau (“TTB”). (Docket no. 5-2.) “Although generally the scope of review on a motion to dismiss for failure to state a claim is limited to the Complaint, a court may consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff’s] claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir.2010) (internal quotation marks and citations omitted). Rule 201(b) permits judicial notice of a fact when it’s “not subject to reasonable dispute because it: (1) is generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” The records and reports of administrative bodies are proper subjects of judicial notice, as long as their authenticity or accuracy is not disputed. See Mack v. South Bay [1042]*1042Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir.1986), overruled on other grounds by Astoria. Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991).

The Court will consider the label in ruling on Jim Beam’s motion to dismiss because the complaint refers to it,’ it’s central to Welk’s claim, and Welk doesn’t question its authenticity. Daniels-Hall, 629 F.3d at 998. The TTB certificates are public records and, while Welk opposes- judicial notice of the TTB certificates, he doesn’t question their authenticity. Thus, they’re appropriate for judicial notice. See, e.g., Hofmann v. Fifth Generation, Inc., No. 14-cv-2569, Docket no. 5, 2015 WL 5440330 (S.D.Cal. Mar. 18, 2015) (taking judicial notice of TTB certificates of label approval as “records and reports of administrative bodies”).

III. Discussion

A. Legal Standard

A 12(b)(6) motion to dismiss for failure to state a claim challenges the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). The Court must accept all factual allegations as true and construe them in the light most favorable to Welk. Cedars-Sinai Med. Ctr. v. Nat’l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir.2007). To defeat Jim Beam’s motion to dismiss, Welk’s factual allegations need not be detailed, but they must be sufficient to “raise a right to relief above the speculative level....” See Bell. Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

B. Analysis

1. California’s Safe Harbor Doctrine

The California Supreme Court has explained:

Although the unfair competition law’s scope is sweeping, it is not unlimited.... Specific legislation may limit the judiciary’s power to declare conduct unfair. If the Legislature has permitted certain conduct or considered a situation and concluded no action should lie, courts may not override that determination. When specific legislation provides a “safe harbor,” plaintiffs may not use the general unfair competition law to assault that harbor.

Cel-Tech Comms. Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 182, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999). Under the safe harbor doctrine, “[t]o forestall an action under the unfair competition law, another provision must actually ‘bar’ the action or clearly permit the conduct.” Id.

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Cite This Page — Counsel Stack

Bluebook (online)
124 F. Supp. 3d 1039, 2015 U.S. Dist. LEXIS 111164, 2015 WL 5022527, Counsel Stack Legal Research, https://law.counselstack.com/opinion/welk-v-beam-suntory-import-co-casd-2015.