Del Rosario v. Sazerac Company, Inc.

Background

Christina Del Rosario sued Sazerac Company, Inc., individually and on behalf of others similarly situated. She alleged that Sazerac’s malt version of Southern Comfort was made to resemble the original Southern Comfort whiskey through its name, colors, themes, fonts, symbols, spacing, and use of the word “Original.” She claimed that this presentation violated New York laws prohibiting deceptive practices and false advertising. She also asserted a claim for unjust enrichment.

Del Rosario specifically challenged the malt beverage’s statement of composition: “Malt Beverage with Natural Whiskey Flavors, Caramel Color and Oak Extract.” She alleged that “Natural Whiskey Flavors” falsely suggested that the beverage contained a meaningful amount of whiskey, and that “Oak Extract” falsely suggested that it had been aged in barrels.

Sazerac’s Motion

Sazerac moved to dismiss Del Rosario’s claims to the extent they were based on “Natural Whiskey Flavors” and “Oak Extract.” It argued that federal regulation required those phrases and therefore preempted the related state-law claims. Sazerac also moved to dismiss the unjust-enrichment claim as duplicative of the statutory claims.

Federal Preemption

The court denied the motion to dismiss the claims relating to the statement of composition. Federal preemption can prevent a state-law claim when complying with both federal and state requirements is physically impossible. But the party asserting preemption bears a heavy burden, and Sazerac did not show at the motion-to-dismiss stage that federal regulation required the precise phrase “Natural Whiskey Flavors.”

The complaint did not establish that “whiskey flavor” was the flavoring material used in the beverage. In addition, even if whiskey flavor had been used, the regulation appeared to allow a producer to identify flavoring materials specifically or to refer to them generally. Sazerac did not explain why it could not have used a general phrase such as “Malt Beverage with Natural Flavors.” The court also found that Sazerac did not explain how federal regulations required the phrase “Oak Extract.”

Unjust Enrichment

The court granted the motion to dismiss the unjust-enrichment claim. Under New York law, unjust enrichment is not a substitute claim when other legal claims provide an adequate remedy. Del Rosario’s theory was that Sazerac’s enrichment was unjust because it obtained her payment through deceptive practices or false advertising.

The court concluded that the unjust-enrichment claim was duplicative if the statutory claims were valid. If those claims failed, Del Rosario had not identified facts showing another basis for treating Sazerac’s retention of her money as unjust. The court also rejected her arguments that she could plead unjust enrichment alternatively or avoid dismissal by seeking recovery under only one theory.

Disposition

Judge Arun Subramanian concluded that Sazerac had not shown that federal law preempted Del Rosario’s claims based on the statement of composition, but that the unjust-enrichment claim could not proceed. The court therefore denied in part and granted in part Sazerac’s motion to dismiss and directed the Clerk of Court to terminate the motion on the docket.