United States District Court, D. Massachusetts
KIERAN O'HARA, Plaintiff.
DIAGEO-GUINNESS, USA, INC. and DIAGEO NORTH AMERICA, INC., Defendants.
MEMORANDUM AND ORDER
Diageo-Guinness, USA, Inc. and Diageo North America, Inc.
make and market Guinness Extra Stout ("Extra
Stout"), a form of beer, for distribution in the United
States. Plaintiff Kieran O'Hara filed a putative class
complaint alleging that he bought Extra Stout in part because
defendants deceptively advertised that it was brewed at St.
James's Gate brewery, Dublin, Ireland. Plaintiff alleges
that Extra Stout was actually brewed in New Brunswick,
Canada. Plaintiff alleges that he paid more for the beer than
he would have if defendants had disclosed its origin.
Plaintiff subsequently filed an amended complaint with seven
claims, including unjust enrichment, misrepresentation, and
unfair and deceptive practices in violation of Mass. Gen.
Laws Chapter 93A. Defendants have moved to dismiss.
court is denying the motion with respect to Count I, alleging
misrepresentation. It is also denying the motion with respect
to Counts III and IV to the extent that they allege that
statements on defendants' website violated Mass. Gen.
Laws Chapter 93A. The Amended Complaint states plausible
claims that these statements reasonably deceived plaintiff
into buying and paying a price premium for Extra Stout.
the court is dismissing the Chapter 93A claims to the extent
that they are based on the labels affixed to Extra
Stout's bottles and packaging. The labels were approved
by the Alcohol Tobacco Tax and Trade Bureau (the
"TTB") and, therefore, are entitled to safe harbor
protection under Chapter 93A, §3. It is also dismissing
Count II, alleging unjust enrichment, because plaintiff has
adequate remedies at law. In addition, plaintiff has not
alleged any threatened injury to himself that could be
prevented by prospective relief, and his claim for a
declaratory judgment duplicates his claims for damages.
Accordingly, the claims for injunctive and declaratory relief
are also being dismissed.
APPLICABLE LEGAL STANDARDS
Motion to Dismiss
Rule of Civil Procedure 8(a)(2) requires that a complaint
include a "short and plain statement of the claim
showing that the pleader is entitled to relief." This
pleading standard does not require "detailed factual
allegations, " but does require "more than labels
and conclusions, and a formulaic recitation of the elements
of a cause of action will not do." Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007). In
addition, "some allegations, while not stating ultimate
legal conclusions, are nevertheless so threadbare or
speculative that they fail to cross ' the line between
the conclusory and the factual'" and must be
disregarded. Penalbert-Rosa v. Fortuno-Burset, 631
F.3d 592, 595 (1st Cir. 2011) (quoting Twombly, 556
U.S. at 557 n.5).
survive a motion to dismiss under Rule 12(b)(6), the
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 (2009) (quoting Twombly, 550 U.S. at
570). In considering a motion to dismiss under Rule 12(b)(6),
the court must "take all factual allegations as true
and...draw all reasonable inferences in favor of the
plaintiff." Rodriguez-Ortiz v. Marao Caribe,
Inc., 490 F.3d 92, 96 (1st Cir. 2007); Maldonado v.
Fontanes, 568 F.3d 263, 266 (1st Cir. 2009). An
entitlement to relief is "plausible" if the facts
"raise a reasonable expectation that discovery will
reveal evidence" of the alleged misconduct, "even
if it strikes a savvy judge that actual proof of those facts
is improbable, and that recovery is very-remote and
unlikely." Twombly, 550 U.S. at 556; see also
Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 17
(1st Cir. 2011) . Nevertheless, "where a complaint
pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief."
Iqbal, 556 U.S. at 678. "[G]uaging a pleaded
situation's plausibility is a 'context-specific'
job that compels [the court] 'to draw on' [its]
'judicial experience and common sense.'"
Schatz v. Republican State Leadership Comm., 669
F.3d 50, 55 (1st Cir. 2012)(quoting Iqbal, 556 U.S.
addition, Rule 9(b) requires that "in alleging fraud or
mistake, a party must state with particularity the
circumstances constituting fraud or mistake." This
standard means that a complaint must specify the "time,
place, and content of an alleged false representation, "
including misrepresentations forming the basis of a Chapter
93A claim. Mulder v. Kohl's Pep't Stores,
Inc., 865 F.3d 17');">865 F.3d 17, 22 (1st Cir. 2017).
Rule 12(b)(6), the district court must consider the
complaint, attached exhibits, "documents incorporated by
reference into the complaint, matters of public record, and
facts susceptible to judicial notice." Haley v. City
of Boston, 657 F.3d 39, 46 (1st Cir. 2011); In re
Colonial Mortgage Bankers Corp., 324 F.3d 12, 15 (1st
Cir. 2003). "The court may judicially notice a fact that
is not subject to reasonable dispute because it is generally
known within [the court's] jurisdiction or can be
accurately and readily determined from sources whose accuracy
cannot reasonably be questioned." F.R.E. 201(b). This
includes "documents the authenticity of which [is] not
disputed by the parties, " Watterson v. Page,
987 F.2d 1, 3 (1st Cir. 1993), and "official public
records, " Freeman v. Town of Hudson, 714 F.3d
29, 36-37 (1st Cir. 2013). When such a document contradicts
an allegation in the complaint, the document trumps the
allegation. See Clorox Co. P.R. v. Proctor &
Gamble Consumer Co., 228 F.3d 24, 32 (1st Cir. 2000)
(citing Northern Indiana Gun & Outdoor Shows, Inc. v.
City of South Bend, 163 F.3d 449, 454 (7th Cir.
1998)). These rules derive from "the axiom that a
writing is the best evidence of its contents. . . [and the]
tenant that a court may look to matters of public record in
deciding a Rule 12(b)(6) motion." Colonial
Mortgage Bankers, 324 F.3d at 15-16.
defendant seeks dismissal based upon an affirmative defense,
"the facts establishing the defense must be clear on the
face of the plaintiff»s pleadings." Blackstone
Realty LLC v. FDIC, 244 F.3d 193, 197 (1st Cir. 2001).
"Furthermore, review of the complaint, together with any
other documents appropriately considered under Federal Rule
of Civil Procedure P. 12(b)(6), must leave no doubt' that
the plaintiff's action is barred by the asserted
same standards apply to defendants' challenges to
plaintiff's standing. The plaintiff must support each
element of standing "in the same way as any other matter
on which the plaintiff bears the burden of proof, i.e., with
the manner and degree of evidence required at the successive
stages of the litigation." Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992). Therefore, where, as
here, the factual allegations in the pleadings concerning
jurisdiction are unchallenged, the court "must credit
the plaintiff's well-pleaded factual allegations (usually
taken from the complaint, but sometimes augmented by an
explanatory affidavit or other repository of uncontested
facts), draw all reasonable inferences from them in her
favor, and dispose of the challenge accordingly."
Valentin v. Hospital Bella Vista, 254 F.3d 358, 363
(1st Cir. 2001).
standing to sue under Article III of the Constitution,
plaintiff must have "a personal stake in the outcome of
the controversy." Warth v. Seldin, 422 U.S.
490, 498 (1975)(citing Baker v. Carr, 369 U.S. 186,
204 (1962)). He "must allege and show that [he]
personally ha[s] been injured" or will be injured
without judicial relief, and "not that injury has been
suffered" or will be suffered "by other,
unidentified members of the class to which [he] belong[s] and
which [he] purport[s] to represent." Id. at
502. "Unless [the plaintiff] can thus demonstrate the
requisite case or controversy between [himself] personally
and [defendants], [he] may [not] seek relief on behalf of
[himself] or any other member of the class."
addition, the "plaintiff must demonstrate standing for
each claim he seeks to press and for each form of relief that
is sought." Town of Chester, N.Y. v. Laroe Estates,
Inc., 137 S.Ct. 1645, 1650 (2017) . Therefore, a
plaintiff who has standing to seek damages must also
demonstrate standing to pursue injunctive relief."
Id. "Past exposure to illegal conduct does not
in itself show a present case or controversy regarding
injunctive relief...if unaccompanied by any continuing,
present adverse effects." O'Shea v.
Littleton, 414 U.S. 488, 495 (1974).
"irreducible constitutional minimum of standing consists
of three elements." Lujan, 504 U.S. at 560.
First, there must be an "actual or imminent"
"'injury in fact'--an invasion of a legally
protected interest which is concrete and
particularized." Id.; see also Katz v.
Pershing, LLC, 672 F.3d 64, 71-72 (1st Cir. 2012). A
threatened injury confers standing to seek injunctive relief
if it "is 'certainly impending, ' or there is a
'substantial risk' that the harm will occur."
Clapper v. Amnesty Int'l, 133 S.Ct. 1138, 1147,
1150, n. 5 (2013). "Second, there must be a causal
connection between the injury and the conduct complained
of--the injury has to be fairly traceable to the challenged
action of the defendant, and not...the result of the
independent action of some third party not before the
court." Lujan, 504 U.S. at 560. "Third, it
must be likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision."
Id. at 561.
state a claim for intentional misrepresentation, the
complaint must allege that the defendant "  made a
false representation of a material fact  with knowledge of
its falsity  for the purpose of inducing the plaintiff to
act thereon, and  that the plaintiff reasonably relied
upon the representation as true and acted upon it  to
[her] damage." Eureka Broadband Corp. v.
Wentworth Leasing Corp., 400 F.3d 62, 68 (1st Cir.
2005). The element of "damage" requires pecuniary
loss. See Shaulis v. Nordstrom, Inc., 865 F.3d 1, 15
(1st Cir. 2017); Restatement (Second) of Torts §525
(1977) . "A representation stating the truth so far as
it goes but which the maker knows or believes to be
materially misleading because of his failure to state
additional or qualifying matter is a fraudulent
misrepresentation." Id. at §529.
plaintiff may justifiably rely on a representation even if he
would have discovered the truth through an investigation
"without considerable trouble or expense."
Restatement (Second) of Torts at §540; accord
Kuwaiti Danish Computer Co. v. Digital Equip.
Corp., 438 Mass. 459, 467 (2003) .
Nevertheless, "if a mere cursory glance would have
disclosed the falsity of the representation, its falsity is
regarded as obvious, " and reliance on it would not be
justified. Id. Therefore, "although the
recipient of a fraudulent misrepresentation is not barred
from recovery because he could have discovered its falsity if
he had shown his distrust of the maker's honesty by
investigating its truth, he is nonetheless required to use
his senses, and cannot recover if he blindly relies upon a
misrepresentation the falsity of which would be patent to him
if he had utilized his opportunity to make a cursory
examination or investigation." Restatement (Second) of
Torts at §541.
Mass. Gen. Laws Chapter 93A
Gen. Laws Chapter 93A, §2 prohibits "unfair or
deceptive acts or practices" in business and consumer
transactions. Edlow v. RBW, LLC, 688 F.3d 26, 39
(1st Cir. 2012)(quoting Green v. Blue Cross & Blue
Shield of Mass., Inc., 47 Mass.App.Ct. 443 (1999)). A
representation about a product is "deceptive" under
Chapter 93A "when it has the capacity to mislead
consumers, acting reasonably under the circumstances, to act
differently from the way they otherwise would have acted
(i.e., to entice a reasonable consumer to purchase [a]
product) ." Edlow, 688 F.3d at 39 (quoting
Aspinall v. Philip Morris Companies, Inc.,
442 Mass. 381, 394 (2004)). The court decides the
"boundaries of what may qualify for consideration as a
[Chapter] 93A violation, " but within those bounds,
"whether a particular set of acts...is unfair or
deceptive is a question of fact." Milliken & Co.
v. Duro Textiles, LLC, 451 Mass. 547, 563 (2008).
Code Mass. Regs. §3.16(3) states that "an act or
practice is a violation of [Chapter 93A] if...it fails to
comply with existing [Massachusetts] statutes, rules,
regulations or laws, meant for the protection of the
public's health, safety, or welfare...intended to provide
[Massachusetts] consumers protection." In Klairmont
v. Gainsboro Rest., Inc., however, the Supreme Judicial
Court held that a violation of such a statute or regulation
constitutes a violation of Chapter 93A "only if the
conduct leading to the violation is...unfair [or] deceptive
and occurs in trade or commerce." 465 Mass. 165, 174
(2013); see also McDermott v. Marcus, Errico, Emmer &
Brooks, P.C., 775 F.3d 109, 116-120 (1st Cir. 2014) . In
Klairmont, for example, the court stated that "not all
building code violations--indeed, very few-will give rise to
violations of Chapter 93A, either because they would lack the
unfairness or deceptiveness present in this case or because
they do not arise in trade or commerce." 465 Mass. at
174. However, because the defendants had "violated the
building code for decades to avoid the expense and
complications of required improvements, and the violations
created a hazardous environment for patrons of the
defendants' business, a danger of which the defendants
were well aware, " the defendants were liable under
Chapter 93A. Id. at 177.
state has authority to seek heavy sanctions on those who
engage in deceptive advertising even without injury" to
any individual consumer. Rule v. Fort Dodge Animal
Health, Inc., 607 F.3d 250, 255 (1st Cir. 2010).
However, Chapter 93A, §9 gives the individual consumer a
right to sue only when he suffers an "objective,
identifiable harm that goes beyond the deception [or
unfairness] itself." Shaulis, 865 F.3d at 10.
Allegations that the deceptive conduct inflated the
product's price, causing the plaintiff to overpay,
suffice. Id. at 10. However, "claims of injury
premised on 'overpayment' for a product, or a loss of
the benefit of the bargain, require an objective measure
against which the plaintiff's allegations may be
evaluated" and may not rest on the plaintiff's
"subjective belief" that he received a less
valuable product than he paid for. Id. "The
complaint must identify a legally required standard that the
[product was] at least implicitly represented as meeting, but
allegedly did not." Iannacchino v. Ford Motor
Co., 451 Mass. 623, 633 (2008) . In addition,
overpayment may not be inferred solely from the fact that a
product was deceptively advertised, since the deception
itself cannot be the requisite injury. Id. at 11.
93A exempts a defendant's conduct from liability if the
conduct is authorized under another statute. Specifically,
Chapter 93A, §3 provides that "nothing in this
chapter shall apply to transactions or action otherwise
permitted under laws as administered by a regulatory board or
officer acting under statutory authority of the commonwealth
or of the United States." The defendant has the burden
of proving that its conduct fell under this "safe
harbor" exemption. See Aspinall, 453 Mass. at
434-35 (2009) . To sustain that burden, it "must show
more than the mere existence of a related or even overlapping
regulatory scheme that covers the transaction. Rather, [the]
defendant must show that such scheme affirmatively permits
the practice which is alleged to be unfair or
deceptive." Bierig v. Everett Sq. Plaza
Assocs., 34 Mass.App.Ct. 354, 367 n. 14 (1993); Greany,
Chapter 93A Right and Remedies §6-4 (1992). In Bierig,
for example, a group of high-income tenants renting units in
a subsidized housing project alleged that their rent
illegally exceeded the maximum "below market rate"
that the landlord could charge under the applicable
regulations. 34 Mass.App.Ct. 354, 367 (1993). The court,
however, held that the challenged rents were entitled to safe
harbor because the "statutory scheme...expressly
permitted rents for [high income] tenants to be above the
'below market rates' and implicitly required it,
" and the Massachusetts Housing Finance
Agency had approved the rates. Id. at 367-68.
applying Bierig, including this court, have held that Chapter
93A claims are precluded when a regulator authorized to
review the defendant's actions has determined that those
actions, in particular, were not unfair or deceptive.
Compare Cablevision of Boston, Inc. v. Public
Imp. Com'n of City of Boston, 38 F.Supp.2d 46, 60-61
(D. Mass. 1999)(holding that defendants were likely to prove
that municipal agency's approval of defendant's
allegedly unfair and deceptive act, the conversion of
telecommunications conduits to new uses, precluded Chapter
93A claim), aff'd 184 F.3d 88 (1st Cir. 1999); Rogers
v. Comcast Corp, 55 F.Supp.3d 711, 721 (E.D. Pa.
2014)(holding that allegedly anti-competitive transaction
could not premise Chapter 93A liability because it was
approved by the FTC) with Aspinall, 453 Mass. at 434-35
(holding that FTC's failure to prosecute defendant for
describing cigarettes as "light" was not
"affirmative permission" to use the descriptor,
even though an FTC consent decree authorized another
cigarette manufacturer to use a similar term). Courts
applying comparable state statutes have reached the same
conclusion. See Kuenzig v. Hormel Foods Corp., 505
Fed.App'x 937, 939 (11th Cir. 2013)(applying Florida
law); Cruz v. Anheuser-Busch, LLC, 2015 WL 3561536,
at *3-4 (CD. Cal. 2015)(applying California law). So
interpreted, §3 enables a defendant to rely on
regulators' authoritative and particularized
determination that its product or conduct is not unfair or
TTB Regulatory Framework
Federal Alcohol Administration Act (the "FAAA"), 27
U.S.C. §§201-219, regulates the sale of alcohol
beverages, including beer, in interstate commerce. The FAAA
"was designed as a comprehensive statute to deal with
practices within the alcohol beverage industry that Congress
had judged to be unfair and deceptive, resulting in harm to
both competitors and consumers." Adolph Coors Co. v.
Brady, 944 F.2d 1543, 1547 (10th Cir. 1991).
Specifically, the statute requires alcoholic beverages to be
"bottled, packaged, and labeled in conformity
with...regulations, to be prescribed by the Secretary of the
Treasury." 27 U.S.C. §205(e). Those
regulations must "prohibit deception of the consumer
with respect to such products" and "provide the
consumer with adequate information as to the identity and
quality of the product." Id.
Secretary's duties to enforce the FAAA have been
delegated to the TTB, which has enacted regulations
specifically addressing the labeling of malt beverages,
including beer. Before releasing a beer product, bottlers
and distributors must first apply for and obtain a
Certificate of Label Approval (a "COLA") from the
TTB. See 27 C.F.R. §§7.41, 25.142(e). The TTB may
not issue a COLA unless the product's labelling
"complies with applicable laws and regulations." 27
C.F.R. §13.21(a); see also §7.20 ("No person
engaged in business as a brewer, wholesaler, or importer of
malt beverages...shall sell, ship, or deliver for sale or
shipment...in interstate or foreign commerce commerce...any
malt beverages in containers unless the malt beverages are
packaged, and the packages are marked, branded, and labelled
in conformity with this subpart.").
applicable regulations require, among other things, that:
Each bottle of beer...show by label or otherwise the name or
trade name of the brewer, the net contents of the bottle, the
nature of the product such as beer, ale, porter, stout, etc.,
and the place of production (city and, when necessary for
27 C.F.R. §25.142(a)(emphasis added). They also prohibit
placing on any label "any statement that is false or
untrue in any particular, or that, irrespective of falsity,
directly or by ambiguity, omission, or inference, or by the
addition of irrelevant, scientific or technical matter, tends
to create a misleading impression." 27 C.F.R.
§§7.29(a)(1). More specifically, §7.23(b)
No label shall contain any brand name,  which, standing
alone, or in association with other printed or graphic
matter, creates any impression or inference as to the age,
origin, or other characteristics of the product unless the
appropriate TTB officer finds that such brand name... conveys
no erroneous impressions as to the age, origin, or other
characteristics of the product.
Id. (emphasis added). These regulations apply to
labels on bottles as well as "any carton, case, or other
covering of the container." Id. at §7.21.
the TTB may not issue a COLA if the label creates a
misleading impression as to the characteristics ...