Vizzy gets no kick from champagne, and that's ok

West v. Molson Coors Beverage Co. USA, No. 23-cv-7547 (BMC),2024 WL 3718613 (E.D.N.Y. Aug. 7. 2024)

Plaintiffs alleged that Molson deceived consumers intothinking that Vizzy contained champagne (used as a generic term throughout!)when it didn’t. The court found the allegations implausible, using what maybecome a popular framework recently distilled from the cases about howreasonable consumers think. [This framework isn’t all that bad, but I do notethat it is not based on any qualitative or quantitative evidence about howconsumers actually think except insofar as a poll of chambers might bequalitative evidence.]

Vizzy costs $17.99 per 12-can box and looks like this:

First, for standing, plaintiffs didn’t need to allege aprice premium over a comparable product. “[C]onsumers suffer an injury in factwhen, in reliance on alleged misrepresentations, they buy a product that theyotherwise would not have purchased. I fail to see a meaningful distinctionbetween a price-premium injury and a but-for purchasing injury.”

Nonetheless, it was unreasonable to think Vizzy would havechampagne, based on five considerations: “(1) the presence or absence ofexpress representations, (2) context of the alleged misrepresentation, (3)etymological analysis, (4) allegations about competitor products and (5)consumer survey evidence.”

There were no express representations about champagne,weighing against plausibility.

Etymology: a mimosa is a champagne drink, or at least a sparklingwine drink.  Molson argued that thephrase “hard seltzer” modified the word “mimosa,” which makes clear toconsumers that the beverage is not a mimosa at all.

But what is a hard seltzer? By long tradition, “hard”connotes “alcoholic,” and “seltzer” means “sparkling water.” “The alcohol in ageneric hard seltzer could theoretically be any type of consumable alcohol,including champagne. Although defendant’s proffered definitions do not identifythe types of alcohol commonly used in hard seltzer, other definitions specifyfermented cane sugar and malted barley – not champagne or any other type ofwine – as the usual suspects.” Overall, “mimosa” “strongly suggests” thepresence of champagne, and “hard seltzer” doesn’t exclude it. So etymology “slightly”favored the plaintiffs.

“But the full context of the packaging, viewed through theeyes of a reasonable consumer, sharply reduces any ambiguity caused by theetymological association between mimosas and champagne.” The court rejectedplaintiffs’ argument that the tagline “Brunch Just Got Real” reinforced thechampagne connection.

This was basically a familiar issue: “whether a food orbeverage ought to include ingredients associated with its purported flavor, orwhether the presence of the flavor itself, regardless of its source, issufficient to make the description accurate.” We also need to know howconsumers think about new/unfamiliar products: product categories “act likelenses, modifying how consumers see other aspects of those products and formtheir reasonable expectations about them.”

True, many cases say that, on a motion to dismiss, “afederal trial judge, with a background and experience unlike that of mostconsumers, is hardly in a position to declare” what consumers know. But it isproper to consider whether a statement would deceive a reasonable consumer,which requires considering “what reasonable consumers know about the productsthey purchase.” [This is usually resolved by saying that some situationscan be resolved as a matter of law, but not all.]

Reasonable consumers would read “mimosa hard seltzer” together,and there were no allegations that hard seltzers ordinarily, or evenoccasionally, contain champagne. “Because a champagne-based hard seltzer is notthe norm, a reasonable consumer would expect that if a hard seltzer hadchampagne in it, the packaging would make that fact abundantly clear.” Anyambiguity could be resolved by looking at the ingredient list, which makes noreference to champagne, only to “alcohol.” “[G]iven plaintiffs’ allegation thatconsumers actively seek out drinks with champagne, in addition to their failureto allege hard seltzers are ordinarily (or ever) made with champagne, it wouldbe odd that Vizzy would have spiked its seltzer with champagne without makingthat abundantly clear.” A reasonable consumer would have “serious doubts” afterreading the ingredients. Similarly, there were no pictures of mimosas,champagne, or grapes anywhere on the packaging. “Vizzy’s direct references toorange juice, juxtaposed against its lack of reference to champagne, shouldmake the confused consumer think again: if the product contained champagne, whynot say so?”

Molson argued two additional factors: Vizzy’s allegedly comparativelylow price and the location of purchase (stores prohibited by NY law fromselling beverages containing wine). The latter just didn’t work: “It isunreasonable to assume that an ordinary consumer has a sufficiently intimatefamiliarity with the New York Alcoholic Beverage Control Law to know thatbodegas and grocery stores cannot sell wine.” The former was more persuasive: “Althoughit is possible that a seltzer made with a particularly inexpensive champagnecould sell at the same price point as those made with cheaper forms of alcohol(approximately $1.50 per 12-ounce can), all else equal, a reasonable consumerwould assume that a champagne-based seltzer would sell at a price premium.”

The court also weighed the interest in innovation: “Lest westifle development and distribution of innovative forms of consumer products inthe name of avoiding consumer ‘deception,’ we have to give manufacturersreasonable leeway in marketing their products without handcuffing them withlawsuits.” This is a consideration that only fits into a normative conceptionof the reasonable consumer, not an empirical one: manufacturers should be ableto push the definition of terms because that gets us cheaper goods. It hasnothing to do with whether people would be materially deceived. That doesn’tmean it’s wrong, but courts that go back and forth between normative andempirical concepts of what’s deceptive to a reasonable consumer become hard topredict.

The court cautioned that it wasn’t endorsing trickery, but rather“tastes like” marketing. “If the manufacturer’s advertising is wrong, and itdoes not taste like what the label says it tastes like, then the consumer isnot going to buy it again and the product will fail. The market is a much moreefficient check on that kind of representation than lawsuits.” [GI proponents shouldstrongly object to this argument.]