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Aliano v. Louisville Distilling Co., LLC

United States District Court, N.D. Illinois, Eastern Division

July 20, 2015

MARIO ALIANO, and DUE FRATELLI, INC., individually, and on behalf of all others similarly situated, Plaintiffs,
v.
LOUISVILLE DISTILLING COMPANY, LLC, Defendant

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For Mario Aliano, Due Fratelli, Inc., Plaintiffs: Matthew C. De Re, Thomas A. Zimmerman, Jr., Zimmerman Law Offices, P.c., Chicago, IL.

For Louisville Distilling Company, LLC, Defendant: Francis A Citera, LEAD ATTORNEY, Brian D Straw, Thomas E. Dutton, Greenberg Traurig, LLP, Chicago, IL.

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MEMORANDUM OPINION AND ORDER

Honorable Marvin E. Aspen, United States District Judge.

Plaintiff Mario Aliano (" Aliano" ) is the owner and president of Plaintiff Due Fratelli, Inc. (" Fratelli" ), a restaurant. They bring suit on behalf of themselves and those similarly situated against Defendant Louisville Distilling Company, LLC (" Louisville" ), arguing that it used deceptive trade practices in marketing and advertising its Angel's Envy Rye Whiskey Finished in Caribbean Rum Casks (" Angel's Envy finished whiskey" ).[1] Louisville brings this motion to dismiss all four counts of the complaint. For the reasons discussed below, the motion is granted as to Counts I and III, but denied as to Counts II and IV.

BACKGROUND

The facts described herein are taken from the complaint and accepted as true for the purposes of this motion.

Defendant Louisville is a limited liability company established and headquartered in Kentucky. (Compl. ¶ 16.) Louisville owns the Angel's Envy brand and creates and sells Angel's Envy finished whiskey. ( Id. ¶ ¶ 2, 37-38.) It also controls what statements appear on the product label and webpage. ( Id. ¶ 55.) Plaintiff Aliano is the owner and president of Plaintiff Fratelli, a restaurant that serves alcohol. ( Id. ¶ 36.) Aliano decides which alcohol Fratelli will purchase to offer its patrons. ( Id. ¶ 37.) In October 2014, Aliano reviewed the website and product label for Angel's Envy finished whiskey. ( Id. ¶ ¶ 37-38.) Aliano alleges that he purchased the product for himself and the restaurant based on the website and label statements. ( Id. ¶ 38.)

MGP Ingredients, Inc. (" MGP" ) creates industrial-sized quantities of alcohol, including the whiskey used in Angel's Envy, at a factory in Lawrenceburg, Indiana. ( Id. ¶ 9.) Louisville purchases the distilled rye whiskey from MGP and pays it to age the whiskey in barrels. ( Id. ¶ 30.) MGP then transports the distilled and aged whiskey to Louisville's facility in Kentucky, where Louisville transfers the whiskey to rum barrels. ( Id. ¶ ¶ 9, 30.) Once Louisville finishes the whiskey, it bottles the final product at its facility in Bardstown, Kentucky. ( Id. ¶ 9.)

According to the complaint, this process is very different from the impression Aliano received from the Angel's Envy website and label. ( Id. ¶ ¶ 11, 33, 37-39.) The label describes the product as " hand crafted"

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by Louisville. ( Id. ¶ 4.) The website includes a chart depicting the process of making Angel's Envy, including the distilling phase. ( Id. ¶ ¶ 6, 27.) On the website, Louisville claims that the taste profile of " our rye whiskey" is perfect for finishing in rum casks. ( Id. ¶ 5.) The website also includes a blog titled " Tales from the Still." ( Id. ¶ 25.) A still is an apparatus used to distill alcohol. In addition, Louisville's advertising materials refer to Angel's Envy as " Kentucky Rye" and " small batch." ( Id. ¶ ¶ 19, 22.)

Aliano claims that he believed Angel's Envy was a premium product because the label and website implied it was distilled, aged, and finished in small batches in Kentucky using a unique recipe. ( Id. ¶ ¶ 33, 38-39.) He further claims that he would not have purchased Angel's Envy finished whiskey for himself or for Fratelli if he had known that Louisville purchased rye whiskey that was distilled and aged as part of MGP's mass-production in Indiana. ( Id. ¶ ¶ 9, 30, 39-40.) In addition, he alleges that the deceptive marketing artificially inflated the price he paid for the finished whiskey, so the product he received was worth less than the price he paid. ( Id. ¶ ¶ 77, 91, 94.)

Aliano and Fratelli filed suit against Louisville. Aliano brings Count I under the Kentucky Consumer Protection Act (" KCPA" ) on behalf of himself and the entire class. Aliano brings Count II under the Illinois Consumer Fraud and Deceptive Trade Practices Act (" ILCFA" ) on behalf of himself and subclass A. Fratelli brings Count III under the Illinois Uniform Deceptive Trade Practices Act (" ILDTPA" ) on behalf of itself and subclass B. Aliano and Fratelli bring Count IV on behalf of themselves and the entire class, alleging unjust enrichment. They allege damages including the full or partial retail price paid. ( Id. ¶ 54.) They suggest that the damages will not exceed $5,000,000, but Louisville has filed a declaration suggesting the damages could exceed that amount. ( Id. ¶ 13; Decl. of Kevin Sachs (Dkt. No. 1-1 at Ex. B.) ¶ ¶ 6-7, 9.)

Louisville now moves to dismiss the complaint in its entirety for failure to state a claim under Rule 12(b)(6). It additionally moves to dismiss Counts II and III on the basis that it is protected from liability by " safe harbor" provisions in the ILCFA and the ILDTPA.

JURISDICTION

Before addressing the merits of Louisville's motion, we note disagreement between the complaint and Louisville's removal notice regarding the amount in controversy. Because this discrepancy concerns our subject matter jurisdiction, we raise the issue sua sponte. Indeed, we are obligated to assure ourselves " that [we] possess[] jurisdiction over the subject matter of an action before [we] can proceed to take any action respecting the merits of the action." Scott AFB Props., LLC v. County of St. Clair, Ill., 548 F.3d 516, 520 (7th Cir. 2008) (quoting Cook v. Winfrey, 141 F.3d 322, 325 (7th Cir. 1998)); Int'l Union of Operating Eng'rs, Local 150 v. Ward, 563 F.3d 276, 282 (7th Cir. 2009).

Louisville removed this case to federal court under the Class Action Fairness Act of 2005 (" CAFA" ). Under CAFA, a federal district court has original jurisdiction in class action cases when more than $5,000,000 is at stake and at least one plaintiff is not a citizen of the same state as any defendant.[2] 28 U.S.C. § 1332(d)(2). A plaintiff does not automatically defeat a court's jurisdiction under CAFA by alleging the amount in controversy is below the jurisdictional requirement. Johnson v. Pushpin Holdings, LLC,

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748 F.3d 769, 772 (7th Cir. 2014); Standard Fire Ins. Co. v. Knowles, __U.S. __, 133 S.Ct. 1345, 1348-50, 185 L.Ed.2d 439 (2013). Instead, if the defendant can show the damages could plausibly total more than $5,000,000, the court has jurisdiction unless those damages are legally impossible. Johnson, 748 ...


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