Parent v. Millercoors LLC

          ORDER GRANTING DEFENDANT MILLERCOORS LLC'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [ECF, 22]

          HON GONZALO P. CURIEL JUDGE

         Before the Court is Defendant MillerCoors LLC's ("Defendant" or "MillerCoors") Motion to Dismiss Plaintiff's First Amended Complaint. Def. Mot. Dismiss ("Def. Mot."), ECF No. 22. The motion has been fully briefed. Pl. Resp., ECF No. 23; Def. Reply, ECF No. 24. Upon consideration of the moving papers and the applicable law, and for the reasons set forth below, the Court GRANTS Defendant's motion.

         FACTUAL AND PROCEDURAL BACKGROUND

         The facts of this case concern "Blue Moon, " a popular brand of Belgian-style wheat beer owned by Defendant MillerCoors. MillerCoors is a major beer manufacturer with many well-known beer brands, including Coors Light, Miller Genuine Draft, Miller High Life, Ice house, Milwaukee's Best, Keystone, and Olde English. First Amended Complaint ("Am. Compl.") 3, ECF No. 19. Plaintiff Evan Parent ("Plaintiff"), a "beer aficionado and home brewer, " alleges that from 2011 until mid-2012, he regularly paid a price premium purchasing Blue Moon beer from San Diego-area retailers for personal and family consumption because MillerCoors created the deceptive and misleading impression that Blue Moon is a "craft beer." Id. at 9.

         I. Initial Complaint and First Motion to Dismiss

         On April 24, 2015, Plaintiff, a resident of California, brought suit on behalf of himself and others similarly situated against Defendant, a limited liability company incorporated in Delaware and with its principal place of business in Illinois, in San Diego Superior Court. Compl. 1, ECF No 1. Plaintiff pled three causes of action for (1) deceptive practices and misrepresentation in violation of California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq.; (2) untrue and misleading advertising in violation of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq.; and (3) unlawful, fraudulent and unfair business practices in violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq.

         In the initial Complaint, Plaintiff alleged that Blue Moon does not qualify as a "craft beer" because such beers are produced by "small, independent and traditional" craft breweries as defined by the Brewers Association, a trade organization for American craft brewers, and MillerCoors is not such a brewery. Id. at 4. More specifically, according to the Brewers Association, "[t]o qualify as an American craft brewer, a brewery must: (a) Produce less than 6 million barrels of beer annually; (b) Be less than 25 percent owned or controlled by a non-craft brewer; and (c) Make beer using only traditional or innovative brewing ingredients." Id. Plaintiff alleged that MillerCoors produces more than 76 million barrels of beer on an annual basis. Id.

         Plaintiff alleged that even though Blue Moon is not really a craft beer, MillerCoors engages in deceptive and misleading business practices to misrepresent it as a craft beer in order to capture a slice of the burgeoning craft beer market and "charge up to 50% more for Blue Moon beer than it charges for other MillerCoors products."^[1] Id. at 4-5.

         First, Plaintiff alleged that "Defendant goes to great lengths to disassociate Blue Moon beer from the MillerCoors name." Id. at 4. Even though Blue Moon is owned by MillerCoors, MillerCoors' ownership of Blue Moon is not disclosed on the bottle or the outer packaging of Blue Moon beers, which instead states that the product is manufactured by "Blue Moon Brewing Co." Id. In fact, Blue Moon is brewed by MillerCoors at its Golden, Colorado, and Eden, North Carolina breweries, which also produce all of MillerCoors' other beers. Id. The Blue Moon Brewing Company ("BMBC") website also contains no reference to MillerCoors' ownership of the brand, although MillerCoors' own website lists Blue Moon among its "craft beer" brands. Id. Second, Plaintiff argued that Defendant's use of the registered trademark "Artfully Crafted" in the labeling and advertising for Blue Moon beer misleads consumers into thinking Blue Moon is a craft beer. Id. at 5. Third, Plaintiff argued that Blue Moon's "premium price, " in line with other craft beers, as well as its "placement among other craft beers" in San Diego-area retailers, misled him into believing Blue Moon was a craft beer. Id.

         On May 30, 2015, Defendant removed the case to federal court pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d). Notice of Removal 3, ECF No. 1. On July 13, 2015, Defendant filed their first motion to dismiss. ECF No. 6. On October 26, 2015, the Court granted the first motion to dismiss. Order Granting Defendant's Motion to Dismiss ("Dismissal Order"), ECF No. 17.

         First, the Court found that the safe harbor exception to California's consumer protection laws applied to the Plaintiff's UCL, CRLA, and FAL claims to the extent that those claims relied on MillerCoors' omission of their ownership interest, or their designation of BMBC as the brewer, on the label or packaging of Blue Moon beers. Id. at 12.

         Second, the Court found that, based on the facts as pled in the initial Complaint, a reasonable consumer was not likely to be deceived by the Defendant's representations. The Court found that: (1) based solely on the facts pled that "there is not a single reference to MillerCoors on the Blue Moon Brewing Company website, " while "Blue Moon is prominently displayed on the MillerCoors website, " the Court could not conclude that the reasonable consumer could be misled by Blue Moon's internet presence; (2) standing alone, MillerCoors' use of the "Artfully Crafted" trademark was non-actionable puffery; (3) Plaintiff could not argue that other features of Blue Moon's advertising were deceptive because he had pled no other features of Blue Moon's advertising; (4) Plaintiff could not argue that Blue Moon's "placement among other craft beers" in retail stores was deceptive because Plaintiff did not allege, and provided no factual allegations from which the Court could reasonably infer, that MillerCoors has any control over where retailers place Blue Moon on their shelves; and (5) Plaintiff provided no authority supporting the proposition that the price of a product constitutes a representation or statement about the product. Id. at 12-16.

         The Court then found that Plaintiff's allegations were sufficiently particular to satisfy Fed.R.Civ.P. 9(b)'s heightened pleading requirements for fraud cases, id. at 17, but that Plaintiff lacked standing to seek injunctive relief, id. at 19. The Court permitted Plaintiff leave to amend his complaint, but cautioned that Plaintiff could not rely on MillerCoors' use of the BMBC trade name in Blue Moon's label or packaging or, standing alone, the "Artfully Crafted" trademark to support his consumer protection claims. Id. at 20.

         II. Amended Complaint and Second Motion to Dismiss

         On November 25, 2015, Plaintiff filed a first amended complaint. ECF No. 19. The amended complaint makes the same legal claims as the original complaint, id. at 11-20, but adds a number of new factual allegations.

         First, the amended complaint alleges that in addition to the Brewers Association definition, Blue Moon also does not meet the dictionary definition of a craft beer. The term "craft beer" is defined by Merriam-Webster Dictionary as a "specialty beer produced in limited quantities, " by Cambridge Dictionary as "beer made using traditional methods in small, independent breweries, " and by the Oxford English Dictionary as "a beer made in a traditional or non-mechanized way by a small brewery." Id. at 4.

         Second, the amended complaint alleges that MillerCoors engages in a number of practices to produce the "wholesale fiction" that Blue Moon is a craft beer produced by a small, independent brewery, including: (a) portraying Blue Moon as having being invented independently by Dr. Keith Villa on the BMBC website, when in fact Dr. Villa was a MillerCoors employee who developed Blue Moon at the direction of MillerCoors executives; (b) portraying Blue Moon as being brewed at a "small, limited capacity brewpub known as ‘The SandLot Brewery'" on the BMBC website and YouTube channel, when in fact Blue Moon is brewed at MillerCoors' Golden, Colorado and Eden, North Carolina brewing facilities; (c) directing retail establishments, through MillerCoors' network of distributors, to stock Blue Moon in the craft beer section in retail establishments; (d) endorsing retailers' misrepresentation of Blue Moon as a craft beer by permitting such retailers to use Blue Moon's trademark protected logo in advertisements identifying Blue Moon as a craft beer; (e) advertising Blue Moon as a craft beer at concert venues through MillerCoors' sponsorship and distribution agreements; (f) selling Blue Moon as a craft beer in non-retail venues, such as national restaurant chains; and (g) directing Blue Moon to be priced as a craft beer, "[t]hat is, $2.00 to $3.00, or up to 50 percent more per six pack than the average macrobrew, " and thereby engaging in a practice of "falsely representing that a product has characteristics that command a premium price, and then actually charging a premium price for the product." Id. at 5-8.

         This motion to dismiss followed.

         LEGAL ...