Kay v. Copper Cane, LLC

Background

Barry N. Kay and Bryan J. Dodge Jr. filed a proposed class action concerning labels for Copper Cane’s Elouan pinot noir. The 2016 and 2017 labels described the wine as an “Oregon Pinot Noir” and referred to Oregon’s coast. The 2017 label also referred to the Willamette, Umpqua, and Rogue Valleys. The labels included text referring to Napa or Acampo, California, and the wine was bottled in California. The federal government later required Copper Cane to change the labels after determining they were misleading.

Kay bought several bottles of the 2016 wine in California. Dodge bought one bottle of the 2017 wine in Louisiana. They alleged that the labels falsely suggested that the wine was an Oregon wine connected to the three Oregon American viticultural areas and that its grapes came from coastal vineyards. They asserted claims under California’s Unfair Competition Law, Consumer Legal Remedies Act, and False Advertising Law, as well as unjust enrichment and breach of express warranty. They also sought injunctive relief and proposed to represent themselves and a similarly situated class.

Court’s analysis

Copper Cane moved to dismiss under Rule 12(b)(6), which tests whether a complaint states a legally sufficient claim. The court accepted the complaint’s factual allegations as true for purposes of the motion.

The court dismissed the California consumer-protection claims to the extent they were based on Dodge’s purchase. Dodge purchased the 2017 wine in Louisiana, and the complaint did not allege enough of a connection between California and the alleged misleading conduct or injury. The court stated that Copper Cane’s California location alone did not overcome the usual presumption that California consumer-protection laws do not apply to events outside California. The court dismissed the UCL claim based on Dodge’s purchase with leave to amend and stated that the same analysis applied to the related Consumer Legal Remedies Act and False Advertising Law claims.

The court rejected Copper Cane’s argument that certificates of label approval issued by the Alcohol and Tobacco Tax and Trade Bureau created a “safe harbor”—a protection from civil liability for conduct permitted by law. It concluded that the label-approval process appeared too informal to establish that the certificates had the force of law. The court also stated that the record did not show whether the agency specifically investigated or ruled on the alleged misrepresentations. It therefore declined to dismiss the consumer-protection claims on that basis.

The court also rejected Copper Cane’s argument that the labels could not mislead reasonable consumers because they referred to California. At the pleading stage, it was too close a question whether the “Vinted & Bottled” language next to “Napa, CA” clearly explained the wine’s origin. The court concluded that references to Oregon and Oregon’s coast could potentially mislead reasonable consumers about the wine’s origin. It therefore did not dismiss the remaining consumer-protection claims, unjust-enrichment claim, or breach-of-warranty claim on the ground that no actionable misrepresentation had been alleged.

The court also declined to dismiss the request for injunctive relief. It accepted the allegations that Kay and Dodge intended to buy the wine in the future if they could rely on truthful labeling. The court concluded that, at this stage, the plaintiffs had preliminarily shown standing to seek an order requiring truthful labeling.

The court granted Copper Cane’s unopposed request for judicial notice of the Elouan labels and three certificates of label approval attached to its motion.

Disposition

The court denied in part and granted in part with leave to amend Copper Cane’s motion to dismiss. Specifically, it dismissed the UCL, Consumer Legal Remedies Act, and False Advertising Law claims based on Dodge’s purchase with leave to amend, while declining to dismiss the remaining claims and the request for injunctive relief. The court also granted Copper Cane’s unopposed request for judicial notice.