Nelson v. Millercoors, LLC

• Decision Date: 31 March 2017
• Docket Number: 15–CV–7082 (WFK) (RML)
• Citation: 246 F.Supp.3d 666
• Parties: Leif NELSON, Plaintiff, v. MILLERCOORS, LLC and MillerCoors Oil Can Breweries, Defendants.
• Court: U.S. District Court — Eastern District of New York

246 F.Supp.3d 666

Leif NELSON, Plaintiff,

v.MILLERCOORS, LLC and MillerCoors Oil Can Breweries, Defendants.

15–CV–7082 (WFK) (RML)

United States District Court, E.D. New York.

Signed March 31, 2017

Amy E. Boyle, Melissa W. Wolchansky, Halunen & Associates, Clayton Halunen, Minneapolis, MN, George Volney Granade, II, Michael Robert Reese, Reese LLP, New York, NY, for Plaintiff.

Paul W. Garrity, Shin Young Hahn, Sheppard, Mullin, Richter & Hampton LLP, New York, NY, Sascha Henry, Sheppard Mullin Richter & Hampton, LLP, Los Angeles, CA, for Defendants.

DECISION & ORDER

WILLIAM F. KUNTZ, II, United States District Judge:

On February 9, 2016, Leif Nelson ("Plaintiff") filed an Amended Putative Class Complaint ("Amended Complaint") against MillerCoors, LLC ("Defendant" or "MillerCoors")¹ setting forth claims for:

(1) unfair or deceptive acts in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. ; (2) deceptive acts or practices in violation of New York General Business Law section 349 ; (3) false advertising in violation New York General Business Law section 350 ; (4) negligent misrepresentation; (5) fraud; (6) breach of express warranty; and, in the alternative to the aforementioned claims, (7) unjust enrichment. Defendant now moves to dismiss the Amended Complaint in its entirety pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on which relief can be granted. For the reasons that follow, Defendant's motion to dismiss is GRANTED.

BACKGROUND²

I. Facts

Foster's Beer is an Australian-style beer brand owned by MillerCoors, a Delaware corporation headquartered in Chicago, Illinois. Am. Compl. ¶ 4, ECF No. 5. William and Ralph Foster brewed the first batch of Foster's Beer in Melbourne, Australia, in 1887. Id. ¶ 6. In 1972, Foster's began exporting beer to the United States in unique containers—25.4 ounces in capacity and shaped like motor oil cans—that earned the nickname "Foster's Oil Cans." Id. ¶ 7. The can labels sported "multiple references to Australian culture and symbols," namely "an image of a Red Kangaroo, the national symbol of Australia, and the Southern Cross constellation," which is "a main component on the Australian national flag." Id. ¶¶ 16–17. In 2011, Foster's USA LLC assumed responsibility for brewing all Foster's Beer sold in the United States, and relocated the U.S. brewing facilities, Oil Can Breweries, to Fort Worth, Texas. Id. ¶¶ 5, 8–9, 15. All Foster's Beer sold in the United States is thus domestically brewed. See id. ¶¶ 8, 15.

In 2012, MillerCoors became the sole owner of Foster's USA LLC. Id. ¶ 9. MillerCoors currently offers Foster's Beer in the United States in the classic "25.4 ounce ‘Oil Cans,’ " as well as "12 ounce bottles, 12 ounce cans, and [o]n draft," among other forms. Id. ¶ 12. These bottles and cans of domestically brewed Foster's Beer are "almost identical [in design] to the imported variety that was previously sold."Id. ¶ 18.

II. Procedural History

Plaintiff filed his initial Complaint on February 9, 2016, on behalf of himself and three purported classes of individuals "who purchased Foster's Beer during the applicable liability period for their personal use, rather than for resale or distribution": the "New York Class," the "Multi–State Class," and the "Nationwide Class." Id. ¶ 29. The New York Class consists of "[a]ll consumers within the State of New York." Id. The Multi–State Class consists of:

All consumers in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, or Wyoming ....

Id. The Nationwide Class consists of "[a]ll consumers in the United States and its territories." Id. Each class excludes "Defendant's current or former officers, directors, and employees; counsel for Plaintiff and Defendant; and the judicial officer to whom this lawsuit is assigned." Id.

The Amended Complaint contains the following causes of action: (1) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 ILCS 505/1 et seq. (on behalf of the Nationwide Class); (2) violations of New York General Business Law ("GBL") section 349 (on behalf of the New York class); (3) violations of GBL section 350 (on behalf of the New York class); (4) Negligent Misrepresentation (on behalf of the New York and Nationwide Classes); (5) Fraud (on behalf of the New York and Nationwide Classes); (6) Breach of Express Warranty (on behalf of the Multi–State Class); and, in the alternative to the foregoing claims, (7) Unjust Enrichment (on behalf of the Nationwide Class). Id. ¶¶ 33–100.

According to Plaintiff, MillerCoors is tricking consumers "into believing they are purchasing the same [imported] product as they had in the past" precisely because it has maintained the same packaging for Foster's over time, despite the fact that the Foster's sold in the United States is also brewed domestically. Id. Specifically, Plaintiff contends "[c]onsumers believe they are purchasing beer imported from Australia brewed with Australian ingredients, when, in fact, they are purchasing beer brewed in Fort Worth, Texas, with ingredients from the United States." Id. ¶ 2

Part of this confusion, Plaintiff asserts, comes from MillerCoors's "overall marketing campaign, online and in advertisements," id. ¶ 20, including: (1) the brand slogan "Foster's Australian for Beer," id. ¶ 21; (2) the "How to Speak Australian" television ads "depict[ing] Foster's as being a product from Australia by using Australian accents and scenery," id. ; and (3) the official website for Foster's Beer, which, as of December 2015:

• Noted Foster's Beer is made out of hops that are only grown in three locations in Australia, and that "[t]hese hops and an exclusive Foster's yeast are what give Foster's its bold refreshing taste. The secret yeast doesn't produce sulfur harshness that other beers can exhibit, which means that Foster's taste is never skunky and always Australian," id. ¶ 13;

• Advertised, " ‘Foster's is available in more than 150 countries, making it the largest-selling Australian beer brand in the world,’ "id ; and

• Displayed "an outline of the country of Australia, references to [the beer's] roots and history in Australia, and use of Australian symbols and phrases including ‘How to Speak Australian,’ ‘Foster's—Australian for Beer,’ and a video screen with images of rugby players," id ¶ 22.

Under Plaintiff's theory, MillerCoors engaged in deceptive conduct intending to capitalize on consumers' willingness "to pay a premium for high quality, imported beer." Id. ¶¶ 24–25. Plaintiff alleges that, between January 2012 and January 2015, he "purchased Foster's Beer in reliance on the representations contained on the packaging that the beer was imported from Australia and Foster's history of being an imported beer from Australia"—purchases he would not have made had he understood Foster's is now a domestically brewed and bottled beer. Id. ¶ 28. Plaintiff's alleged injury—economic loss from buying "beer that had less value than what he paid"—was thus "proximately caused by Defendant's misconduct." Id.

On June 3, 2016, Defendant filed its fully briefed motion to dismiss the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Def.'s Mot. to Dismiss ("MTD"), ECF No. 16; see also Def.'s Request for Judicial Notice ("Notice Request"), ECF No. 17; Def.'s Reply ("Reply"), ECF No. 19; Pl.'s Mem. Opp'n ("Opp'n"), ECF No. 18.

LEGAL STANDARD

To survive a motion to dismiss pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A sufficiently pleaded complaint provides "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. Indeed, a complaint that merely offers labels and conclusions, a formulaic recitation of the elements, or " ‘naked assertions' devoid of ‘further factual enhancement,’ " will not survive a motion to dismiss. Id. (quoting Twombly , 550 U.S. at 557, 127 S.Ct. 1955 ). At the motion-to-dismiss stage, this Court accepts all factual allegations in the Amended Complaint as true and draws all reasonable inferences in favor of Plaintiff, the nonmovant. Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009). But the Court need not credit "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Id. at 72 (quoting Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ) (alteration omitted). Rather, legal conclusions must be supported by factual allegations. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

Claims premised on fraud must meet Rule 9(b) of the Federal Rules of Civil Procedure's heightened pleading standard, which requires pleadings to "state with particularity the circumstances constituting the alleged fraud." With respect to Plaintiff's fraud claim, then, the Amended Complaint must "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993).

DISCUSSION

I. Judicial Notice

Because both Plaintiff and MillerCoors attached various documents to their pleadings, the Court first assesses which are appropriate to consider for the purposes of the instant motion.³ At the motion to dismiss stage, courts may...