Settlement in Craft Brew Alliance lawsuit awaits judge’s OK

KAILUA-KONA — A proposed settlement agreement in the lawsuit against the owner of Kona Brewing Co. could mean partial refunds for anybody who’s purchased packs of its bottled or canned beers in the last few years.

The plan still requires the judge’s approval, and a hearing for the motion is scheduled for next Thursday. But if the agreement gets the OK, it would allow those who file a claim without proof of purchase to get up to $10 and up to $20 if they do have proof of purchase.

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“We are pleased to have reached a settlement agreement and are currently awaiting court approval,” Craft Brew Alliance said in a statement. “While we do not admit any wrongdoing, we felt it was important to move forward and avoid the unnecessary distraction and burden of ongoing litigation.”

The agreement would settle a 2017 lawsuit filed in federal court in which the plaintiffs, who were California residents at the time the complaint was filed, alleged that the company’s packaging and advertising misleads customers into believing the beer is brewed here in the state.

Although the company’s Kailua-Kona facility produces about 12,000 barrels of beer every year, its bottled and canned product, as well as its mainland draft, is brewed in breweries located in Oregon, Washington state, Colorado and New Hampshire.

The complaint said that had the plaintiffs known the beer was brewed in the mainland, they either wouldn’t have purchased it “or would have paid significantly less for it.”

At the end of April, the parties in the case told the court they had reached a tentative agreement in the case. Craft Brew Alliance’s counsel told West Hawaii Today the company wasn’t admitting any liability but the agreement helped the company avoid the expense and burden of litigation.

In an April report to investors, the company said it expects to spend $4.7 million to settle the lawsuit, although the exact figure will be based on the number of claims filed. Craft Brew Alliance’s attorney said in addition to including a rough estimate of the payouts, that figure also includes attorney fees for the class counsel and administrative costs.

The class of those eligible to file claims includes any consumers nationwide who since the end of February 2013, bought Kona Brewing Co. beer in cans or bottles packaged in its 4-packs, 6-packs, 12-packs and 24-packs.

Payments range from $1.25 per 4-pack to $2.75 per 24-pack with a maximum payment of $20 per household if proof of purchase is submitted. Otherwise the maximum is $10.

The agreement specifically excludes Kona Brewing Co. beers sold without packaging, such as loose bottles or cans and draft beer.

CPT Group, the proposed settlement administrator, estimated that there exist roughly 7.8 million class members who could file a claim, although both the administrator and counsel for the class believe it “highly unlikely” there will be more than a million claims submitted

Although there isn’t a cap on how many claims Craft Brew Alliance must pay out, the settlement agreement does give the company the option of terminating the settlement if the number of claims exceeds the one-million mark.

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Within 25 days of the judge giving preliminary approval to the settlement, notice of the settlement will go out, including via publication in the media as well as online banner ads.

Claim forms would be submitted by mail or via a settlement website and must be submitted within 90 days from the date banner ads first go online.

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