Federal Appeals Court Dismisses “Lime-a-Rita” Class Action

David Kistler

In a March 16, 2017 decision, the United States Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative consumer class action against Anheuser-Busch Companies, LLC. In this action, plaintiffs alleged that the labeling on defendant’s “Rita” malt beverages (including Bud Light Lime-a-Rita) was misleading and asserted claims for false advertising, omission, and breach of warranty under California law. Plaintiffs alleged that use of the word “Light” was misleading because the products contained considerably more calories and carbohydrates per ounce than other Budweiser products. The Ninth Circuit was called upon to review the District Court’s dismissal of the action with prejudice under Rule 12(b)(6).

In affirming the District Court, the Ninth Circuit held that “no reasonable consumer would be deceived by the label on the carton into thinking that ‘Bud Light Lime Lime-a-Rita,’ which the label calls a ‘Margarita With a Twist,’ is a low calorie, low carbohydrate beverage, or that it contains fewer calories or carbohydrates than a regular beer.” The Ninth Circuit noted that the label makes clear that the product is “not a normal beer” and that the label picture shows a bright green drink served over ice in a margarita glass. According to the Ninth Circuit, comparable products would include a hypothetical Budweiser Lime-a-Rita product (as opposed to a Bud Light) or a tequila margarita, both of which would contain more calories and carbohydrates than the product at issue. For these reasons, the Ninth Circuit dismissed both the false advertising and omission claims.

While this decision is not binding in New Jersey, New Jersey businesses should take note of the Ninth Circuit’s reasoning regarding what constitutes a comparable product for purposes of consumer deception.

Appellate Division Holds That Consumer Fraud Act Plaintiffs Can Recover Attorneys’ Fees Expended in Defense of Counterclaim

Jaret N. Gronczewski 

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The New Jersey Appellate Division in Garmeaux v. DNV Concepts, Inc. t/a The Bright Acre, No. A-1400-14T1, held that a prevailing plaintiff in a Consumer Fraud Act (“CFA”) case is entitled to recover attorneys’ fees expended to defend an intertwined counterclaim. The opinion, which addressed an issue of first impression for the court, has been approved for publication. The court also reaffirmed that New Jersey law does not impose a proportionality requirement on fee awards.

The plaintiffs in Garmeaux sued Bright Acre in connection with services rendered to replace their gas fireplace in 2010. According to the plaintiffs’ testimony, Bright Acre introduced them to co-defendant James Risa, who was slated to perform the installation services for the new fireplace. At the time, Risa had worked at Bright Acre for approximately 20 years. Risa, however, also owned and operated his own independent company called Professional Fireplace Services. In March 2010, Risa provided a $3,700 estimate to the plaintiffs for installation services. And Bright Acre provided a sales order for $2,450 in August 2010. In September 2010, the plaintiffs made a payment to Professional Fireplace Services toward the $3,700 installation fee. Work began in late October 2010. Continue reading “Appellate Division Holds That Consumer Fraud Act Plaintiffs Can Recover Attorneys’ Fees Expended in Defense of Counterclaim”

Does a CFA Claimant Need to Plead “But for” Causation?

Seth J. Lapidow and Ethan M. Simon

New Jersey courts appear to be trending toward requiring Consumer Fraud Act (CFA) claimants to plead “but for” causation to survive dismissal. On Aug. 23, Judge Anne E. Thompson of the U.S. District Court for the District of New Jersey dismissed a class action CFA claim Rudel Corporation filed against Heartland Payment Systems, a credit and debit processor. See Rudel Corp. v. Heartland Payment Systems, No. 16-2229, 2016 WL 4472944 (D.N.J. Aug. 23, 2016). According to the complaint in Rudel, the plaintiff operated a restaurant and used Heartland to process credit card transactions. In spring 2014, Heartland sent a letter to Rudel and other clients announcing a new program through which Heartland would charge a lower rate on American Express transactions. Several months later, Heartland indicated on Rudel’s monthly account statement that it had incorrectly calculated the rates for the new American Express program and had to adjust the rates. Allegedly, Heartland also retroactively charged the increased rate. Continue reading “Does a CFA Claimant Need to Plead “But for” Causation?”