IN FOCUS: Attempted Class Action Suit Filed Against Handful of Alcohol Beverage Companies

On November 14, 2003, a DC resident filed an attempted class action lawsuit in DC Superior Ct against a group of alcohol beverage suppliers and one industry trade association. Notably, the defendants included the largest distiller Diageo, but not the two largest brewers, AB or Miller. Many observers compared the suit to early attacks on tobacco advertising, which eventually led to a massive financial settlement in 1998 and severe restrictions on tobacco marketing.

In the alcohol suit, the plaintiff and his high-profile attorneys (including well-known litigator David Boies and his son) aspire to represent two huge classes of parents of underage drinkers that stretch back to 1982. They seek to force the industry to: 1) "disgorge" billions of dollars in "unlawful" revenues/profits (the suit uses both terms) from illegal underage sales; 2) "stop the abusive marketing practices that contributed to those sales." Those practices allegedly include advertising material, promotions, internet sites and placement practices that the plaintiff charges are "wrongful, unjust and illegal conduct," and from which defendants "knowingly and systematically profit." The suit claims not to be a "broad brush" attack on the industry, but it goes on for 45 pages to claim at length that the industry members knowingly and effectively target those below 21, that they fraudulently conceal and lie about their methods, and so on. Most of the particulars could have been culled from any number of reports and public statements from CSPI, CAMY, CASA and other advocacy groups stretching back before 1982.

Responses to the suit varied widely. Industry members of course denied any wrong doing, vowed to vigorously defend themselves and expressed their commitment to responsible marketing and reducing underage consumption. At the other end of the spectrum, CSPI's George Hacker tied the suit to the controversial September 2003 report from the National Academies of Science. He suggested any awards be used to fund programs to address alcohol problems, "including a national media campaign to reduce underage drinking."

The first legal responses to the suit came in late December. Coors filed a notice asking for the case to be moved from DC Superior Court to US District Court. The Beer Institute filed motion to dismiss itself as a defendant. Why should the case be moved? Amounts at stake are far in excess of the $75,000 threshold to move the case, according to Coors. Plus, the defendants except Beer Institute have "diverse citizenship" in various states and countries. What's more, "Beer Institute was "fraudulently joined" in the complaint, argued Coors, since it "does not manufacture, sell, advertise or market any alcohol bev-erage brand or product. As a non-profit association, Beer Institute is not liable under DC Consumer Protection Act, the association argued. There was no "commercial transac-tion" between it and the plaintiff. In fact, BI has no relationship with the plaintiff and no legal duty to "prevent the illegal acts of plaintiff's children." Finally, BI's comments in underage drinking debate are protected by 1st Amendment, and other law, it claims.

Coors and Beer Institute also gave a clue to a broader weakness in the lawsuit. Coors argues: "Plaintiff's complaint thus fails to plead any causal nexus between him and defen-dants' alleged acts….. But such a casual nexus is a fundamental element of all plaintiff's causes of action. Because he has failed to plead this causal element, all his claims must fail." In short, since the plaintiff doesn't even suggest that the suppliers' marketing efforts cause underage drinking, none of the claims stand.

Click below for complete copies of:

1. The attempted class action lawsuit.
2. Coors' notice of removal.
3. Beer Institute's motion to dismiss.