According to a news source, New Jersey residents have filed a putative class action in state court against the Texas-based company that makes Tito’s Handmade Vodka®, the fourth such action filed within the past two months, alleging that promoting and labeling the product as “handmade” deceives consumers because the vodka is made in an industrial facility and the company sells more than 15 million bottles a year. McBrearty v. Fifth Generation, Inc. The first complaint was filed in California in September 2014 and subsequently removed to federal court, Hofmann v. Fifth Generation, Inc.; the second followed in early October in an Illinois state court, Aliano v. Fifth Dimension, Inc.; the third was filed in a Florida federal court, Pye v. Fifth Generation, Inc.
The complaints variously refer to the company’s Website and a Forbes article purportedly featuring images of old-time pot-still production (“i.e., in a shack containing a pot still cobbled from two Dr. Pepper kegs and a turkey-frying rig to cook bushels of corn”). In essence, the complaints contend that consumers pay a premium for the product, believing that something “handmade” is of higher quality because it is “produced in small batches using little to no machinery or automation.” The Illinois plaintiffs allege that the company refers to itself as a “microdistillery,” while industry standards place the cutoff for this designation “at about 25,000 to 40,000 cases per year. However, Defendant produces around 850,000 cases per year—roughly 30 times the maximum production capacity to be considered a ‘microdistillery.’”
Alleging violations of state consumer protection laws, unjust enrichment, negligence, and breach of warranties, the plaintiffs seek either statewide or nationwide class certification, restitution, disgorgement, injunctive relief, punitive and treble damages, attorney’s fees, and costs.
Fifth Generation owner Tito Beveridge promised a vigorous defense, saying, “All of our labels have gone through the approval process of the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB). After sending a field agent to Austin to review our processes, the TTB has approved our use of ‘Handmade’ on our label. We think our pot still batch distillation is one of the key things that differentiates us from a great majority of other vodkas. We disagree with these claims and will defend ourselves against this misguided attack.” A leading distributor who handles the product questioned what “handmade” means. “It’s not easy to define, as hands obviously are involved throughout the process.” See Shanken News Daily, September 23, 2014; Courthouse News Service, November 10, 2014.