by Robert C. Lehrman on June 5, 2015



Earlier this week a federal court decided that TTB’s approval for Bud Light Lime Lime-A-Rita provides a “safe harbor” to protect certain label elements. Largely on account of this safe harbor, the court dismissed the class action lawsuit. The plaintiff had contended that the reference to “light” on the Rita products was misleading because it leaves an impression that the flavored malt beverages are low in calories and carbohydrates.

The Cruz v. A-B decision is in stark contrast with the Tito’s decision of three months ago. In the vodka dispute, Tito tried to locate the same safe harbor, but got pushed back into the middle of a heavy storm.

There are many class action lawsuits filed against alcohol beverage companies during the past year. They include Templeton, Angel’s Envy, Tincup, Whistlepig, Jim Beam, Maker’s Mark, Bulleit and Breckenridge. In most if not all, the defendant brands have argued that the TTB approval should create a safe harbor. But so far, until the Lime-A-Rita case, no judge has agreed that the COLA should protect the brand.

The Lime-A-Rita case may be an outlier because, at least according to Judge Birotte, the plaintiffs did a horrendous job with the pleadings. Secondly, TTB has a fairly specific policy regarding “light” labeling, and it appears that A-B complied with it. In most of the other suits so far, there is no specific TTB policy relating to the labeling at issue (as in the “handmade” cases) — or there is a specific policy but it appears the brand did not comply with it (as in the state of distillation cases).

The Lime-A-Rita court was not even a little impressed with plaintiffs argument that the Rita products should be regulated by FDA rather than TTB. The court explained that the Brown-Forman case resolved this jurisdictional issue way back in 1976 and “there is nothing in the 40 years of subsequent case law that persuades the Court to disagree with the Brown-Forman holding.”

Taking a close look at the label approvals, the court said:

Instead [of TTB’s “light ruling,” Ruling 2004-1], it is the COLAs that are considered the rulemaking authority here which trigger the safe harbor provision. Plaintiffs neglect to address the administrative force of the COLAs. They apparently presume that A-B’s safe harbor arguments solely rest on the [Ruling] but it is the COLAs that have the force of law here. … Plaintiffs do not, and cannot, dispute this ‘relatively formal administrative procedure’ and the effect of law COLAs embody. … [Because] Plaintiffs’ causes of action conflict with the TTB’s approval of the Rita Products’ labels, the safe harbor doctrine insulates A-B from liability.

I have my doubts about whether the label approval process is a “relatively formal administrative procedure.” Relative to a kegger in the frat basement, perhaps. On the other hand, it is not even as formal as a Las Vegas wedding.

In closing, and handing A-B a big victory, the judge went even further, writing: “Because Plaintiffs’ complaint is rife with deficiencies, the Court finds that Plaintiffs’ causes of action under UCL, FAL, and CLRA fail as a matter of law.”

Note: extra credit for anyone who can identify the glorious safe harbor depicted above.