Paradise Found: Consumer Not Damaged by Purchasing (and Consuming) Gin Containing Prohibited “Grains of Paradise”

The Eleventh Circuit again had the opportunity to interpret the scope of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), this time applying the Act’s safe-harbor provision for actions otherwise permitted by law. In Marrache v. Bacardi U.S.A., Inc., 17 F.4th 1084 (11th Cir. Nov. 8, 2021), the court affirmed dismissal of a putative class action that had attempted to hold a beverage manufacturer and a supermarket chain liable under the FDUTPA for selling alcohol that included an additive (grains of paradise) prohibited by a Florida statute but specifically allowed under federal law. Although the court concluded that the Florida statute was not preempted by federal law, the FDUTPA claims nevertheless were barred by the safe-harbor provision, and the plaintiff further could not establish any damage from the inclusion of the grains of paradise (an ingredient that was “prominently etched” on the bottle). Merely alleging the purchase of “an illegal product which is worthless”—without more—is not sufficient to state actual damage.

After purchasing Bombay Sapphire Gin from a Florida Winn-Dixie, Mr. Marrache brought a putative class action in Florida state court against Bacardi and Winn-Dixie Supermarkets for violation of the FDUTPA and for unjust enrichment. Marrache’s claims were based on a Florida statute, § 562.455, Florida Statutes, that prohibited grains of paradise from being included in alcoholic beverages manufactured or sold in Florida. (The statute has since been amended to remove grains of paradise from the list of prohibited ingredients.)

Bacardi and Winn-Dixie removed the case to federal court under the Class Action Fairness Act (CAFA) and moved to dismiss the complaint. Marrache filed an amended complaint, which revised the proposed class to “all citizens of the State of Florida … who are consumers of Bombay … in the State of Florida.” The amended complaint alleged that these class members were damaged when they “purchased and consumed” the grains-of-paradise-containing Bombay from Winn-Dixie. On the defendants’ renewed motion, the district court dismissed the amended complaint with prejudice, concluding that any attempt to amend would be futile.

Marrache appealed, and the Eleventh Circuit affirmed the dismissal with prejudice, although on somewhat different grounds from the district court.

The Eleventh Circuit disagreed with the district court on the question of federal preemption. The district court had concluded that § 562.455, Florida Statues, was preempted by the Food Additives Amendment to the Federal Food, Drug, and Cosmetic Act, which has implementing regulations listing food additives that are “generally recognized as safe” (“GRAS”), one of which is grains of paradise. The Eleventh Circuit, however, concluded that the requirements for conflict preemption were not met, because the Florida statute did not frustrate the purposes of federal law, and it would not be impossible to comply with both statutes. As the court explained, “the fact that grains of paradise can be included in alcohol under federal law does not mean that federal law mandates individual states to allow the sale of alcohol containing grains of paradise.”

Although the federal designation of grains of paradise as GRAS did not preempt Florida law, it did preclude a claim under the FDUTPA. The FDUTPA contains a safe-harbor provision, which provides the FDUTPA “does not apply to … [a]n act or practice required or specifically permitted by federal or state law.” § 501.212, Fla. Stat. Grains of paradise being a substance “that is specifically permitted under federal law to be included in alcohol,” this provision clearly applied and barred Marrache’s claims.

The court also concluded that Marrache had not “pled sufficient facts to state a plausible claim for actual damages,” which is a required element for a FDUTPA claim. The only damage alleged in the amended complaint was that that Marrache and other class members suffered actual damages by “purchas[ing] . . . an illegal product which is worthless.” The amended complaint did not allege, for example, that the Bombay was undrinkable (in fact, it alleged that Marrache drank it) or that Marrache had unsuccessfully sought a refund or suffered any side effect, health issue, or harm from consuming the Bombay containing grains of paradise.

The court distinguished its earlier decision in Debernardis v. IQ Formulations, LLC, 942 F.3d 1076 (11th Cir. 2019), in which the court held that alleging economic loss from purchasing an illegal dietary supplement was sufficient to plead Article III standing. Describing the Debernardis holding as “limited,” the court explained that the basis for the supplement having no value in that case was “Congress’s judgment” in banning the adulterated supplement. Here, however, through the implementing regulations, “Congress has judged alcohol containing grains of paradise safe for human consumption.” So, “even if the sale of Bombay containing grains of paradise is illegal under Florida law, Bombay certainly is not ‘worthless’ in other states, as it is permitted to be sold under federal law and is thus not valueless under the benefit-of-the-bargain theory for actual damages under FDUTPA” which “does not provide for the recovery of nominal damages, speculative losses, or compensation for subjective feelings of disappointment.”

The unjust enrichment claim failed for similar reasons. Again, Marrache alleged only that the gin was “worthless”—not undrinkable or harmful in anyway. Moreover, “Marrache and the other class members did in fact receive what they bargained for (and consumed, according to the amended complaint)—a gin that contains grains of paradise—a fact that was plainly and prominently stated on its bottles.”

Finally, the court affirmed the dismissal with prejudice, “[b]ecause any attempt by Marrache to amend the claims in his amended complaint would be futile.”

Posted by Stacey Mohr.

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