"Hand Crafted," but also Mass-Produced

Some words on a whiskey label tell us a lot about what's in the bottle. In the United States, if a whiskey is labeled a "straight" whiskey, then it must meet certain legal requirements, such as at least two years of aging in a barrel. Other words on a label, however, don't tell us much at all. How old is Jefferson's Reserve's "very old" bourbon? Maker's Mark says its bourbon is "handmade" - do its workers really stir the mash by hand? A recent legal case involving Angel's Envy put the spotlight on distillers' use of these vague descriptions. 

Mario Aliano, a restaurant owner, sued Louisville Distilling Company, which owns Angel's Envy, asserting that Louisville Distilling deceptively marketed Angel's Envy's rye whiskey finished in rum casks. Aliano said he purchased the rye whiskey for his restaurant because its label and website implied it was "hand crafted" in small batches in Kentucky. However, Aliano claimed that the rye whiskey was instead mass-produced by MGP Ingredients in Indiana and only finished in rum casks by Louisville Distilling in Kentucky.

The judge allowed Aliano's deceptive practices claim to go forward at a preliminary stage in the case because Aliano adequately alleged that "the label and website caused him to believe the whiskey was distilled, aged, and finished in small batches in Kentucky."

A lot of whiskey enthusiasts know that words like "small batch" and "special reserve" have no set meaning and are often just marketing fluff. But, as this case shows, a consumer may be able to claim that they were deceived by similar descriptions on a label, and cases like this one can create significant financial liabilities for distillers. Indeed, although the parties later agreed to dismiss this case, Louisville Distilling still incurred legal expenses just because of unclear descriptions on a bottle of its whiskey. 

In addition, distillers cannot necessarily avoid liability just because their labels comply with federal regulations. In this case, Louisville Distilling argued that it should not be liable because the label for Angel's Envy's rye whiskey was approved by the Alcohol and Tobacco Tax and Trade Bureau (better known as the TTB). The judge rejected that argument and found that Louisville Distilling's compliance with the TTB's label regulations was "not enough to bar" Aliano's claims. Stated another way, while federal compliance may prevent problems with federal officials, a consumer can still claim a label is deceptive for other reasons.

Of course, it's important to note that these sorts of claims involving deceptive labeling will often depend on the facts in each case. In another recent case, a judge found that it was unreasonable for a consumer to believe that the word "handmade" on the label of Maker's Mark meant that it was made without the use of substantial equipment, particularly in light of the size of the Maker's Mark brand. 

However, the judge in Aliano's case against Louisville Distilling expressly distinguished the case involving Maker's Mark. The judge noted that "the Angel's Envy brand is much smaller than the Maker's Mark brand," so "a consumer could reasonably believe the phrase 'hand crafted' on the finished [Angel's Envy] whiskey label meant it was not mass-produced." In other words, context matters for these sorts of claims.

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Aliano v. Louisville Distilling Company, LLC, 115 F. Supp. 3d 921 (N.D. Ill. 2015)

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