KAILUA-KONA — A federal judge in California ruled at the beginning of this month that a lawsuit alleging violations of consumer protection laws and misrepresentation by the owner of Kona Brewing Co. could move forward.
The lawsuit accuses Craft Brew Alliance and others of misleading customers into believing the Kona Brewing Co. beer they are purchasing is brewed in Hawaii through the use of images and phrases associated with the Aloha State.
The company’s facility here in Kailua-Kona produces more than 12,000 barrels of beer annually, according to its website, but its bottled beer and mainland draft is produced at facilities on the mainland.
Labels on Kona Brewing Co. beers list Kona and the locations of the company’s mainland facilities, such as Portland and Memphis.
Craft Brew Alliance had asked that the lawsuit be dismissed, but U.S. District Judge Beth Labson Freeman denied its motion, allowing the case to proceed.
Jenny McLean, spokesperson for Craft Brew Alliance, said the ruling is “normal par for course in the litigation process” and that they don’t see the ruling as negative.
“While we will not discuss the specifics of ongoing litigation, we look forward to future proceedings and continue to be optimistic about the final outcome,” she said in a statement. “Looking ahead, we are excited to continue work on our new brewery in Kona and remain passionate and proud of our beers, brand and strong commitment to the Hawaiian community.”
In their lawsuit, plaintiffs alleged “specific, misleading Hawaii-origin representations” on Kona Brewing Co. products, according to the initial complaint.
The complaint referenced examples like the phrase “Liquid Aloha” and packaging and labeling imagery, such as surf-related images on Longboard Island Lager.
In her ruling, the judge agreed that some of those terms and images aren’t enough to bring a lawsuit.
“If the Consolidated Complaint solely alleged pictures of surfboards and the vague phrase ‘Liquid Aloha’ on the beer packaging, the case would end there,” she wrote.
She said the phrase “Liquid Aloha,” for example, was akin to Red Stripe Beer’s “The Taste of Jamaica,” referencing a case in which Red Stripe was accused of misleading customers into believing that beer was produced in Jamaica. The case was ultimately dismissed.
“In addition,” she wrote, “merely referencing Hawaii and its culture on the packaging is not enough on its own to confuse a reasonable consumer regarding the origin of the beer.”
But, the judge said, there were some issues that could potentially fool customers into thinking the beer they’re drinking comes from Hawaii.
Specifically, she referenced the inclusion of a map of Hawaii that identified the Kona brewery, the brewery’s address and an invitation to customers “to visit our brewery and pubs whenever you are in Hawaii.”
Those representations, the judge concluded, “do more than evoke the ‘spirit’ of Hawaii or indicate that the beer is ‘Hawaiian-style.’”
Considered together, she said, those statements and images “amount to specific and measurable representations” that could fool customers into thinking the beer they’re purchasing is made in Kona at the location depicted on the packages.
And the list of brewery locations, she said, don’t amount to an explicit reference to where the beer is brewed or packaged and there is no way to tell from the label which brewery made the beer the customer is purchasing.
“From the vantage point of the reasonable consumer reading the label with the disclaimer, the beer is just as likely to be brewed in Kona, Hawaii as it is to be brewed in Memphis, Tennessee.”
As a result, the judge denied Craft Brew Alliance’s motion to dismiss most of the allegations in the complaint.
The judge did, however, decline to grant an injunction in the case, which is a court order for a party to cease a certain act — in this instance to halt the alleged misrepresentation — while a case is being litigated.
The judge wrote that because the plaintiffs are now aware that the beer isn’t brewed in Hawaii, they can’t demonstrate that they risked harm without an injunction.
“Now that plaintiffs are aware of the reality of Kona’s production process, there is simply no likelihood that plaintiffs will be deceived into purchasing Kona beer again under the assumption that it is imported from Hawaii.”
In an order filed at the beginning of August, the judge scheduled a trial to begin at the end of August 2020.