Here comes a wave of lawsuits. Guess the Liability Lawyers are running short on cash flow.
Lawsuits target alcohol industry
By Richard Willing, USA TODAY
Consumers' attorneys across the nation have begun to target the alcoholic beverage industry, filing lawsuits that claim that some leading brewers and distillers are using slick advertising to sell products to underage drinkers.
Lawsuits filed since November in Ohio, California, North Carolina, Colorado and Washington, D.C., appear modeled after cases that were brought against the tobacco industry beginning in the mid-1980s. Those suits focused on youth-oriented ads and sought huge damages for tens of thousands of underage smokers and their parents. The tobacco lawsuits led to a settlement in 1998 in which tobacco companies agreed to pay $246 billion to state governments to cover health care costs and other smoking-related expenses.
Some legal analysts say the alcohol lawsuits seem less likely to succeed because of generally positive public attitudes about alcohol and because research has raised doubts about a link between ads and underage drinking.
The lawsuits must also buck what some see as a recent backlash against using the courts to regulate consumer products such as guns and fast food. Claims against makers of those products largely have been unsuccessful, in part because of the difficulty in showing companies' culpability for products that can be used safely.
"Alcohol isn't tobacco ... in the law or in the popular mind," says Jack Calfee, research scholar at the American Enterprise Institute, a business-friendly think tank in Washington. "They're going to have trouble showing a (cause-and-effect) connection" between alcohol ads and underage drinking.
In November, attorneys led by David Boies III of Fairfax, Va., filed suit in state court in Charlotte against brewers Coors and Heineken, distillers Diageo and Bacardi and the makers of Zima and Mike's Hard Lemonade, two flavored alcoholic beverages, or "alcopops." The suit, and nearly identical actions filed later in Cleveland, Denver and Washington, accuse the companies of using a "long-running, sophisticated and deceptive scheme ... to market alcoholic beverages to children and other underage consumers."
A fifth lawsuit, filed in Los Angeles in February, targets major brewers Miller and Anheuser-Busch. The plaintiffs' attorney in that case, Steve Berman, represented Washington state in the tobacco settlement. Berman says his alcohol lawsuit "wholeheartedly" borrows reasoning used in tobacco cases.
Boies' lawsuits allege that alcohol companies place ads in magazines such as Stuff, FHM and Spin that appeal to males under age 21, or in Glamour, which is oriented toward females of similar ages. "In one (Bacardi) ad, a scantily clad young woman is standing on a bar stool pouring a shot of rum down the front of her chest while a young man licks the rum off her exposed midriff," say court papers filed in the Denver case. "The tag line reads, 'Vegetarian By Day. Bacardi By Night.' "
Court papers in the Los Angeles case include copies of six similar alcoholic beverage ads. All are designed to push people younger than 21 to obtain alcohol illegally, the lawsuit claims. The lawsuits also say alcohol companies encourage underage drinking by posting rules for drinking games on company Web sites, and by placing their products in movies aimed at those under 21.
"This is extremely sophisticated marketing that's making an awful lot of money," said Boies, the son of lawyer David Boies II, who represented Al Gore in the dispute over the 2000 presidential election.
The Denver suit cites a Journal of the American Medical Association estimate that underage drinkers in America consumed $22.5 billion worth of alcohol in 1999, or 20% of the U.S. market. The suits were brought on behalf of parents of underage drinkers — or, in the Los Angeles case, by Reed and Lynne Goodwin, whose 20-year-old daughter, Casey, was a passenger killed in a car crash in which the driver was an underage drinker. The suits seek class-action damages for thousands of parents whose kids bought alcohol illegally.
The alcohol companies are fighting back. They are trying to have the cases moved from state courts to federal courts. The companies believe federal rules improve their chances by, among other things, making it more difficult for class-action cases to succeed.
Last month in the Charlotte case, the companies cited nine legal bases for dismissing the suit. Among them: The companies said the lawsuit establishes no link between alcohol ads and any drinking by the teenage son of the plaintiffs, Ronald and Andrea Wilson. The ads, the companies say, are commercial free speech protected by the Constitution's First Amendment.
"This lawsuit is a tactic in a social campaign rather than a valid claim for legal relief," argues the companies' attorney, Wood Fay of Charlotte.
The companies note that in a study last year of the relationship between advertising and underage drinking, the Federal Trade Commission found "no evidence of intent to target minors."
The companies say they have spent hundreds of millions of dollars to encourage parents to talk to children about drinking and to train retailers to recognize underage customers. The problem, Miller spokesman Mike Hennick says, is how teens get alcohol — through parents, friends or by using fake IDs. "Lawsuits like this obfuscate the real underlying issues," he says.
Those opposing alcohol companies cite a study by the Center on Alcohol Marketing and Youth, a non-profit interest group in Washington, D.C. The center has found that TV shows popular with teens in 2002 were "filled with alcohol advertising." The number of alcohol ads on TV — 298,381 — rose 39% from 2001, the center says.
Legal specialists say the First Amendment might not protect advertisers if their messages strike judges as deceptive. "You can't predict how lower court judges are going to react," says John Walsh, a New York attorney who has defended corporations sued over ads. "They've often ruled on a gut reaction."
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