Gregory S. Chernack is partner with King & Spalding LLP in the firm’s Washington, DC office.
Consumer fraud suits are a tried and true means many plaintiffs’ lawyers employ to concoct a class of plaintiffs to challenge packaging or advertising that often fools virtually no one. Several weeks ago, Judge Brian Cogan in the Eastern District of New York wisely dismissed one such case, explaining that this type of lawsuit harms consumers and limits the availability of novel products.
Molson Coors sells an alcoholic beverage called Vizzy Mimosa Hard Seltzer. A putative class action was filed under New York’s General Business Law claiming that the name of the product was deceptive because the drink did not contain champagne. Although Molson Coors made no express representation that Vizzy contained champagne, plaintiffs argued that the linkage between mimosas and champagne and the mention of brunch in the advertising tagline (“Brunch Just Got Real”) was sufficient to mislead a reasonable consumer into believing the beverage contained champagne. (The court noted in passing that “sadly” many if not most mimosas today contain sparkling wine and not the beverage from the Champagne region of France.) As Judge Cogan cogently explained, because the drink’s name and the mention of “brunch” would not mislead a significant portion of reasonable consumers, he granted a motion to dismiss. West v. Molson Coors Beverage Company USA, LLC, No. 23-cv-7547 (BMC) (E.D.N.Y. Aug. 6, 2024).
Second Circuit law provides that it is proper for courts to determine whether a statement would deceive a reasonable consumer. See Chen v. Dunkin’ Brands, Inc., 954 F.3d 492, 500 (2d Cir. 2020). And, as Judge Cogan recognized, the reasonable consumer is not an idiot. Just as a reasonable consumer knows that truffles are perishable and expensive and thus would realize an inexpensive bottle of truffle oil would not actually contain truffles, see Jessani v. Monini N. Am., Inc.¸744 F. App’x 18, 19 (2d Cir. 2018), such a consumer would understand that Vizzy is not a mimosa but a “mimosa hard seltzer.” In other words, it is a hard seltzer that is flavored to taste like a mimosa. And, as the court further explained, such a consumer would not expect a hard seltzer to contain champagne; if there was, in fact, champagne in it, the packaging would make that clear, but Vizzy’s labeling made no mention of champagne.
The court went on to hoist plaintiffs by their own petard. Focusing on their contention that consumers actively seek drinks with champagne, the court concluded that this claim actually undermined their argument that a reasonable consumer would be misled. If Vizzy contained champagne and consumers sought out such beverages, the labeling would have made its presence abundantly clear. Instead, the absence of any such mention would have produced “serious doubts about whether the drink contained any champagne.” Further, the relatively low price of the product again provided strong evidence that there was no champagne: “a reasonable consumer would assume that a champagne-based seltzer would sell at a premium price.”
Finally, the court made a particularly noteworthy point: by making it too easy to allege consumer deception, courts will “stifle development and distribution of innovative forms of consumer products.” The litigation cost of defending such claims will lead to an increase in the prices of these products and discourage the sale of them in the first place. Moreover, the market can often serve to protect consumers from many forms of misrepresentation. Thus, a claim that Vizzy does not, in fact, taste like a mimosa is best left to market forces as opposed to litigation. If consumers agreed that Vizzy did not taste like a mimosa, they would likely quickly abandon the product, and it would fail. No doubt, cases of misrepresentation exist: If a company sold a “hard seltzer” that contained no alcohol, which would be a misrepresentation (particularly since a non-alcoholic hard seltzer is, on its face, an oxymoron). But many of these cases are nothing more than profit seeking by attorneys with no benefit—and a real detriment—to consumers.
A market-based solution will often protect consumers much more efficiently than judges and juries trying to examine under a microscope every claim a product makes. Allowing cases such as this one to proceed past the motion to dismiss stage and into discovery drives up costs on any manufacturer wanting to introduce a novel product while providing protection to only the most ignorant of consumers. The lawyers who bring these cases know that if they can get into (costly) discovery, defendants will often settle rather than litigate. Unsurprisingly, the same firm that brought this case has filed similar suits, including one that a “margarita hard seltzer” was misleading because the product lacked tequila. That too was rejected. See Warren v. Coca-Cola Co., 670 F. Supp. 3d 72 (S.D.N.Y. 2023). Hopefully, the decisions in West and Warren will result in similarly weak claims never being filed, trusting consumers to comprehend what is in these products.