California Court Dismisses Class Action Alleging Use of Term “Handcrafted” Was Misleading
Earlier this month, a California federal court dismissed a class action lawsuit seeking to recover damages from the makers of Jim Bean, claiming that the company violated state consumer protection laws by labeling some of its whiskey and bourbon products as “handcrafted.” Dating back to the 1820s, bourbon is a type of whiskey. The term bourbon reached pervasive usage during the 1870s. Today, the Kentucky Distillers’ Association reports that roughly 95 percent of the world’s supply of bourbon is produced in Kentucky.
In Welk v. Beam Suntory Import Co., the plaintiffs’ complaint asserted claims under California’s consumer protection laws, including the False Advertising Law (FAL) and the Unfair Competition Law (UCL). In response to the complaint, the defendant filed a motion to dismiss, claiming that under the state’s safe harbor doctrine, the company is insulated from state law claims due to its compliance with federal labeling laws. The company also alleged that the plaintiffs failed to state a claim because the plaintiffs did not allege any facts showing that a reasonable consumer would find the label misleading. Also, the defendant contended that the economic loss doctrine prevented the plaintiffs from pursuing the claim for negligent misrepresentation.