Last month, the US District Court for the Northern District of California granted in part and denied in part a motion to dismiss a putative class action brought by beer consumers. The plaintiffs, on behalf of state and nationwide classes of purchasers, claimed that consumers are misled into believing that Kona Brewing Company's beer is brewed exclusively in Hawaii, when it is actually brewed in other states.
In denying in part the motion to dismiss, the Court honed in on three components of the beer packaging: (1) the only listed address is in Hawaii; (2) a map of Hawaii identifies Kona Brewing Company's brewery on the Big Island; and (3) the packaging invites consumers to "visit our brewery and pubs whenever you are in Hawaii." While these statements are objectively true, the Court held that they are nonetheless "actionable misrepresentations that are likely to deceive a reasonable consumer into thinking that the beer was brewed in Kona, Hawaii." The fact that the defendant's product labels explicitly identify all five brewing locations—only one of which is in Hawaii—was unavailing because those product labels were obscured by the product packaging and hence not visible at the time of purchase. Therefore, the Court allowed the plaintiffs' statutory claims under the California Consumers Legal Remedies Act, Unfair Competition Law and False Advertising Law, and for common law fraud, intentional misrepresentation, and negligent misrepresentation to proceed.
The Court dismissed express and implied warranty claims, however, and held that the plaintiffs lacked standing to request injunctive relief because they did not allege they would purchase Kona Beer in the future if it continued to be made outside of Hawaii. Rather, they alleged they would purchase the beer if it was actually brewed in Hawaii, which it is not. Absent "a real and immediate threat of repeated injury," the plaintiffs lacked standing in federal court to pursue injunctive relief.
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