townsend and seils v. templeton rye

7/25/2019 Townsend and Seils v. Templeton Rye

1/9

1N THE

IOWA

ISTRICT COURT

N AND

FOR

POLK

COUNTY

Ryan

Townsend

and

Timothy e i l s ,

on

behalf

of

hemselves and l l persons

i m i l a r l y

s i t u a t e d ,

P l a i n t i f f s ,

v s .

TEMPLETON

RYE

PIRITS,LLC,

Defendant.

Case No.

PETITIONAT

L W

PARTIESANDB CKGROUND

FACTS

1 .

P l a i n t i f f

Ryan

Townsend s and

a t l l

times

m a t e r i a l h e r e t o

has

been a

e s i d e n t

of

Pol k County,

Iowa.

2.

P l a i n t i f f

Timothy

S e i l s

i s and a t

l l

times m a t e r i a l h e r e t o

has

been

a

r e s i d e n t

of

Warren

County,Iowa.

3 .

Defendant Templ eton

Rye

p i r i t s ,

LLC

Templ eton )

s

a

o r p o r a t i o n

organized

under

h e

laws

of

h e s t a t e of owa, i t h

i t s

home

f f i c e

i n

Templeton,

a r r o l l County, owa.

4.

J u r i s d i c t i o n and

venue r e a p p r o p r i a t e i n t h i s county, s

Templ eton does b u s i n e s s

i n Polk

County

and P l a i n t i f f Ryan

Townsend a t a

minimum) urchased

r y e

whiskey

t h a t was

s o l d i n

Polk County.

5 .

Templeton

markets t s rye

whiskey

claiming

h a t i t

i s

produced b y

Templeton Rye

S p i r i t s ,

LLC, empleton,

Iowa.

Templeton's rye

whiskey

l a b e l and

o t h e r

marketing m a t e r i a l s

prominently

e a t u r e

t h e r y e s

PROHIBITIONERA ECIPE . Those l a i m s a r e

l l

made

on

h e

b o t t l e l a b e l

and

i n

o t h e r

marketing m a t e r i a l s of Templeton,

i n c l u d i n g on

i t s

w e b s i t e .

Those

claims

r e

f a l s e .

1


2/9

6 .

Templeton's w e b s i t e c o n t a i n s r e p e a t e d

r e f e r e n c e s t o

t h e above

d e s c r i b e d

f r a u d u l e n t

r e p r e s e n t a t i o n s .

As

an example,

o n Templeton's

TOURS

age,

t h e r e i s a

l i n k t o a

TOUR

VIDEO . That v i d e o

i s

n i n e

m i n u t e s

and f i f t y two seconds i n

l e n g t h .

t

i n d i c a t e s i t

wa s

uploaded

o n

February

25, 2009, and remains o n

t h e

s i t e a s

o f t h e d a t e

o f t h e

f i l i n g

o f

t h i s

P e t i t i o n .

That v i d e o i s s h o t a t t h e Templeton f a c i l i t y

i n Templeton,

Iowa,

and

walks

through

t h e

e n t i r e

p u r p o r t e d

d i s t i l l a t i o n

p r o c e s s

of Templeton

r y e

whiskey a s

t a k i n g

p l a c e

i n

Templeton,

Iowa, w i t h n o

r e f e r e n c e

o r

s u g g e s t i o n

t h a t

any d i s t i l l a t i o n

t a k e s

p l a c e e l s e w h e r e .

T h e

v i d e o

i s

c l e a r l y

d e s i g n e d

t o g i v e

an y

viewer

t h e b e l i e f t h a t

Templeton

r y e whiskey

i s

d i s t i l l e d

b y

Templeton

i t s e l f

a t

t s

Templeton,

Iowa

a c i l i t y .

7 .

T e m p l e t o n

a l s o c l a i m s

o n

t s r y e whiskey

a b e l

and

o t h e r

m a r k e t i n g m a t e r i a l s

t h a t

i t s

r y e i s

a

SMALL BATCH RYE WHISKEY.

hat

term

i s

a l s o

m i s l e a d i n g

g i v e n t h e

a c t u a l

m a s s p r o d u c t i o n

m e t h o d o f h e

whiskey, s

d e s c r i b e d

below.

8 .

T e m p l e t o n r y e

i s n o t

d i s t i l l e d o r produced i n Iowa.

9 .

T e m p l e t o n

r y e

i s

n o t

d i s t i l l e d

a c c o r d i n g t o

a

p r o h i b i t i o n

e r a

r e c i p e

1 0 .

Given

t h e

p r o d u c t i o n

m e t ho d

o f

Templeton

r y e ,

a s

s h ow n below,

t

i s

m i s l e a d i n g

t o l a b e l i t

a s a

small

batch

y e whiskey.

1 1 . Templeton

r y e

whiskey i s

d i s t i l l e d

and

aged by

a l a r g e s c a l e

producer o f

whiskeys,

MGP

n g r e d i e n t s ,

I n c . ,

which

o p e r a t e s a d i s t i l l e r y i n

Lawrenceburg,

I n d i a n a ,

(which

o p e r a t i o n

wa s

formerly

o w n e d

a t t i m e s

m a t e r i a l t o

t h i s

P e t i t i o n

by

Lawrenceburg

D i s t i l l e r s

I n d i a n a ,

LLC).

MGP

roduces t h e s a m e r y e whiskey f o r

s a l e

t o m a n y

o t h e r companies,

s o l d

under

a b e l s

d i f f e r e n t from

Templeton's l a b e l .

1 2 .

MGP, s o f

t s m o s t

r e c e n t annual

r e p o r t

(lOk),

l i s t e d 2013

s a l e s

o f d i s t i l l e r y

p r o d u c t s o f

264,098,000.


3/9

1 3 .

MGP s

e b s i t e , a t t h e

homepage

of ~ ~ ~ ~ - ~ r . m

7

i r

r r e < : i i e n t s . c o i ~ i l i s t s

on

t s

h i s t o r y

page a

d e s c r i p t i o n

of

i t s a c q u i s i t i o n of

Lawrenceburg D i s t i l l e r s I n d i a n a ,

LLC

( LDI )

i n

December

of

2011.

t

l i s t s

t h e a s s e t s MGP

c q u i r e d from LDI a s

i n c l u d i n g ,

LDI's


o p e r a t i o n s ,

bulk

b a r r e l

warehousing,

a n k

farm and g r a i n s t o r a g e

f a c i l i t i e s .

1 4 .

I n

i t s

p r o d u c t

l i s t

shown

on

t s

w e b s i t e , a s of

h e time of

i l i n g t h i s s i t

MGP

i s t s

1 9

i f f e r e n t

beverage a l c o h o l s i t p r o d u c e s ,

12

food

g r a d e

i n d u s t r i a l p r o d u c t s ,

and t h a t

MGP l s o

produces u e l

g r a d e

a l c o h o l

a s

a

i s t i l l e r y

co

- p r o d u c t . MGP s e b s i t e ,

under

key a c t s ,

n o t e s

t h a t

i t s food

g r a d e

i n d u s t r i a l a l c o h o l i s s o l d f o r use

i n

m u l t i p l e

a p p l i c a t i o n s ,

i n c l u d i n g

v i n e g a r ,

f l a v o r i n g s ,

hand s a n i t i z e r s ,

o r a l

a n t i s e p t i c s ,

p e r s o n a l

c a r e p r o d u c t s ,

p h a r m a c e u t i c a l

p r o d u c t s

and

household

c l e a n i n g

s o l u t i o n s .

1 5 .

Templeton's r y e whiskey

l a b e l ,

w e b s i t e ,

and

o t h e r marketing

m a t e r i a l s ,

prominently

f e a t u r e

a

s t o r y

of ho w

Templeton

r y e whiskey i s

produced

a c c o r d i n g t o an

o l d

family

r e c i p e

t h a t

s u r v i v e d

because t

was

k nown

t o

an i n d i v i d u a l ,

Mr.

K e r k h o f f ,

and

t h a t t h e

r e c i p e was

used

d u r i n g

t h e

p r o h i b i t i o n

e r a

t o

d i s t i l l r y e

t h a t

was h e

f a v o r i t e of

Al

Capone.

Those

c l a i m s

s u g g e s t i n g


a c c o r d i n g

t o t h a t o l d f a m i l y

r e c i p e

a r e f a l s e .

1 6 . Templeton's

P r e s i d e n t ,

S c o t t

Bush, and

i t s

Chairman,

Vern

Underwood, were

i n t e r v i e w e d

b y

a r e p o r t e r from t h e Des Moines R e g i s t e r , and on

August 29,

2014,

t h e

Des

Moines

R e g i s t e r

p u b l i s h e d

an

a r t i c l e t h a t

i n c l u d e d s t a t e m e n t s

made

b y

Mr. Bush and

Mr.

Underwood.

That a r t i c l e

remains a v a i l a b l e

i n

t h e

a r c h i v e s of

t h e Des

Moines

R e g i s t e r

a t

w w w . d e s m o i n e s r e g i s t e r . c o t n .

1 7 .

Mr. Bush

and

Mr.

Underwood made c e r t a i n

a d m i s s i o n s

r e l e v a n t

t o

t h i s

s u i t

i n c l u d i n g

t h a t

Templeton Rye i s d i s t i l l e d a c c o r d i n g t o

a

s t o c k

r e c i p e

from MGP and

n o t

one

from t h e

o l d

f a m i l y / p r o h i b i t i o n

r e c i p e , a s

r e p r e s e n t e d

i n Templeton's

m a r k e t i n g ,

and t h a t

key t o


4/9

Templeton s marketing

i s

t h e s t o r y

o f t s

c l a i m e d

r e l a t i o n

t o Iowa

and t h e

t o w n o f

Templeton,

r a t h e r

t h a n

t h e

whiskey

i t s e l f T ho s e a d m i s s i o n s m a k e

c l e a r t h e

r e l a t i o n s h i p

between

t h e

f r a u d u l e n t

m i s r e p r e s e n t a t i o n s

and

t h e

a b i l i t y

o f

Templeton

t o

s e l l i t s r y e

whiskey a t t h e

p r i c e s

c h a r g e d .

1 8 .

Templeton s

f r a u d u l e n t m a r k e t i n g

c l a i m s

have

a l l o w e d i t

t o

s e l l

m o r e

r y e

whiskey

o

Io wa e s i d e n t s ,

a t

h i g h e r

p r i c e s

t h a n i t would have

a b s e n t

t h o s e

c l a i m s .

1 9 .

P l a i n t i f f s

r e l i e d

o n

t h e m a r k e t i n g

r e p r e s e n t a t i o n s i d e n t i f i e d

a bove

i n

m a k i n g

t h e i r

d e c i s i o n t o

purchase

Templeton

r y e whiskey.

20.

Templeton s

r y e whiskey

l a b e l s

d o

n o t

i d e n t i f y t h a t t h e whiskey

w a s d i s t i l l e d

i n

I n d i a n a

o r

b y

M P

21.

At l l t i m e s m a t e r i a l

t o t h i s s u i t ,

Templeton

wa s

e q u i r e d ,

p u r s u a n t t o

f e d e r a l

law,

2 7

C.F.R

5.36(d)

e f f e c t i v e

Mar c h 31,

2006),

t o

have

t h e

l a b e l

o n t s

r y e whiskey

i d e n t i f y t h e

s t a t e i n

which

t h e

whiskey

wa s

d i s t i l l e d . Templeton v i o l a t e d

- t h a t

r e q u i r e m e n t

b y

n o t

l i s t i n g

I n d i a n a

a s t h e

s t a t e

o f

i s t i l l a t i o n .

22.

At

a l l

t i m e s m a t e r i a l

t o

t h i s

s u i t , p u r s u a n t t o

f e d e r a l law, 2 7

C.F.R

5 . 4 2 ( a ) ( 1 )

( e f f e c t i v e

M a r c h 31,

2006),

t

wa s

a p r o h i b i t e d p r a c t i c e f o r Templeton t o

p l a c e

a

s t a t e m e n t

o n

a

l a b e l

o f

t s

whiskey t h a t

wa s

f a l s e

o r u n t r u e

i n

an y p a r t i c u l a r , o r t h a t ,

i r r e s p e c t i v e o f

a l s i t y ,

d i r e c t l y , o r

b y

a m b i g u i t y ,

o m i s s i o n ,

o r

i n f e r e n c e ,

o r

b y t h e

a d d i t i o n

o f

r r e l e v a n t ,

s c i e n t i f i c o r

t e c h n i c a l

m a t t e r ,

t e n d s

t o c r e a t e

a m i s l e a d i n g

i m p r e s s i o n . Templeton s l a b e l s v i o l a t e

t h a t l aw

f o r

t h e

r e a s o n s

a nd i n t h e

w a y s c i t e d i n

t h e p a r a g r a p h s a b o v e .

23.

Templeton s v i o l a t i o n

o f t h e

above d e s c r i b e d

f e d e r a l laws,

d e m o n s t r a t e s

t h e

l e n g t h s t o which

i t w a s

w i l l i n g

t o g o i n

o r d e r

t o

p e r p e t u a t e t h e

f r a u d u l e n t

m a r k e t i n g

a s s e r t i o n s

c i t e d

above.

T o c o n c e a l t h e t r u e p r o d u c e r

o f Templeton s

r y e

whiskey i s

d e m o n s t r a t i v e

o f


5/9


6/9

g .

Whether t h e


p r o c e s s

o r r e c i p e f o r

Templeton

r y e

whiskey i s

unique n any

w a y o

Templeton

r y e

whiskey;

h . Whether

Templeton s

c l a i m

t h a t i t s

r y e

whiskey

s

produced

by

Templeton

Rye

S p i r i t s , LLC n

Templeton Iowa,

i s f a l s e

and

m i s l e a d i n g

t o

Iowa

r e s i d e n t

p u r c h a s e r s ;

i

Whether

Templeton s c l a i m

t h a t

i t s

r y e

whiskey s

produced

a c c o r d i n g

t o

a

r o h i b i t i o n e r a r e c i p e

i s

f a l s e and

m i s l e a d i n g

t o

Iowa

e s i d e n t

p u r c h a s e r s ;

j . Whether

Templeton s

c l a i m

t h a t i t s

r y e

i s

a s m a l l

b a t c h

whiskey i s

f a l s e

and

m i s l e a d i n g t o Iowa e s i d e n t p u r c h a s e r s ;

k .

Th e d d i t i o n a l

amount p e r

b o t t l e

Templeton

was

and

i s

a b l e t o

c h a r g e

d u e

t o

any

marketing

c l a i m s

m a d e

n

v i o l a t i o n

of

owa s

consumer r a u d s t a t u t e ;

and

1

Whether

Templeton s

marketing

m i s r e p r e s e n t a t i o n s , a s

i d e n t i f i e d

above,

were

m a d e

with

w i l l f u l

and wanton d i s r e g a r d f o r

t h e r i g h t s

of

l a i n t i f f s

and o t h e r C l a s s

Members

l l o w i n g

f o r

enhanced

damages

under Iowa

Co de

e c t i o n

7 1 4 H . 5 ( 4 ) .

30.

T y p i c a l i t y . P l a i n t i f f s

c l a i m s

a r e

t y p i c a l

of h e

C l a s s s c l a i m s ,

a s t h e

P l a i n t i f f s

claims

r e l a t e s t o t h e p u r c h a s e of o t t l e s of

Templeton

r y e whiskey

o l d

w i t h

t h e

s am e

m a r k e t i n g

c l a i m s a s would

be s s o c i a t e d

w i t h

each

b o t t l e

of empleton

r y e

whiskey o l d .

31.

Adequacy. P u r s u a n t t o

I . R . C . P . 1 . 2 6 2 ( 2 ) (c ) and

1 . 2 6 3 ( 2 ) ,

P l a i n t i f f s

and

t h e

u n d e r s i g n e d c o u n s e l

meet

t h e

r e q u i r e m e n t of

adequacy,

a s

t h e

P l a i n t i f f s

w i l l

f a i r l y and

a d e q u a t e l y

p r o t e c t t h e i n t e r e s t s of t h e C l a s s ,

and

t h e

u n d e r s i g n e d

c o u n s e l

a r e q u a l i f i e d ,

e x p e r i e n c e d and a b l e t o r e p r e s e n t P l a i n t i f f and t h e C l a s s .

32. Predominance.

P u r s u a n t t o

I . R . C . P . 1 . 2 6 3 ( 1 ) ( e ) ,

q u e s t i o n s

of aw o r f a c t

common

t o

t h e

C l a s s

Members predominate

over any q u e s t i o n s

a f f e c t i n g only

i n d i v i d u a l

members.

T he

marketing

claims a s s o c i a t e d

w i t h

each b o t t l e

of

Templeton

r y e

whiskey

c a r r y

f a c t u a l and

l e g a l

i s s u e s

common o

a l l

C l a s s Members.

33.

S u p e r i o r i ~ . P u r s u a n t t o

I . R . C . P . 1 . 2 6 2 ( 2 ) ( b ) and

1 . 2 6 3 ( 1 ) , a c l a s s

a c t i o n i s

s u p e r i o r

t o a l l

o t h e r

a v a i l a b l e

methods f o r

t h e f a i r and

e f f i c i e n t

a d j u d i c a t i o n of h i s

c o n t r o v e r s y .

Th e

f a c t u a l and l e g a l

i s s u e s a r e

common

c r o s s a l l

C l a s s

Members,

numbering

l i k e l y i n

e x c e s s


7/9

of

0,000

Class

Members, i t h each b o t t l e a t i s s u e

c o s t i n g

on average e s s

than $40,

which

does

not

o n s t i t u t e a u f f i c i e n t amount o r claims o be d j u d i c a t e d

i n d i v i d u a l l y .

34. I n d i v i d u a l

C o n t r o l . The n t e r e s t s of n d i v i d u a l

C l a s s

Members

r e b e s t

s e r v e d by

a

l a s s

a c t i o n .

Class Members' n d i v i d u a l a c t u a l dama ges due t o

t h e i n f l a t e d

p r i c e s p a i d

f o r

each

b o t t l e

of

Templeton

rye whiskey

would

not

u s t i f y t h e c o s t

t h a t

would be

i n c u r r e d

i n

p r o s e c u t i n g

a n

a c t i o n

r e l a t i n g

t o

t h a t

p u r c h a s e .

I n

t h e absence

of

a

c l a s s

a c t i o n

i n d i v i d u a l Class

Members

would l i k e l y

be

unable

t o s u c c e s s f u l l y a d j u d i c a t e claims

r e l a t i n g t o

t h e

f r a u d u l e n t marketing

c l a i m s .

35.

This Court w i l l not

e x p e r i e n c e

any m a t e r i a l d i f f i c u l t i e s

i n t s

a d m i n i s t r a t i o n

of

t h i s a c t i o n

as

a

c l a s s a c t i o n . The Class c o n s i s t s of a d i s c r e t e

group

of

h o s e Iowa

r e s i d e n t s

who,

s i n c e July 1,

2009, ave purchased

one

or

more o t t l e s

of

Templeton

rye whiskey,

nd t h a t

group

maybe dequately

reached by u b l i c a t i o n n o t i c e o r o t h e r w i s e

a s

t

r e l a t e s t o t h i s

a c t i o n .

IOWA S PRIVATE

RIGHT

OF CTIONFOR ONSUMER

FRAUDS ACT

36.

P l a i n t i f f

r e

- a l l e g e s and

i n c o r p o r a t e s

by t h i s

r e f e r e n c e

t h e

s t a t e m e n t s c o n t a i n e d

i n

paragraphs 1-35 above.

37.

P l a i n t i f f s a r e consumers w i t h i n t h e

meaning

of S e c t i o n

714H.2(3) of h e Iowa

Code, and

Templeton rye whiskey

i s consumer

merchandise

w i t h i n t h e

meaning of

S e c t i o n

714H.2(4).

38.

Defendant

has engaged

i n

a c t s

and p r a c t i c e s t h a t were

l i k e l y

t o mislead a

s u b s t a n t i a l

number of onsumers s

t o

m a t e r i a l

f a c t s

r e l a t i n g

t o

t h e

whiskey

39.

P l a i n t i f f s

a s

consumers,

have u f f e r e d

a n a s c e r t a i n a b l e

l o s s

of

money

r p r o p e r t y

as

h e

r e s u l t

of efendant's

r o h i b i t e d p r a c t i c e s and a c t s

i n

v i o l a t i o n

of hapter

7 1 4H .


8/9

40.

P l a i n t i f f s

and

t h e C l a s s a r e

e n t i t l e d

t o

r e c o v e r

a c t u a l

damages a s a

r e s u l t

of

Defendant s

v i o l a t i o n

of

hapter

714H,

s p r o v i d e d

i n

S e c t i o n

7 1 4 H . 5 ( 1 ) .

41.

P l a i n t i f f s

and

t h e C l a s s

a r e

e n t i t l e d

t o

r e a s o n a b l e

a t t o r n e y s f e e s

a s a

r e s u l t of

Defendant s

v i o l a t i o n

of hapter

714H,

s p r o v i d e d

i n

S e c t i o n 7 1 4 H . 5 ( 2 ) .

42.

D e f e n d a n t s

v i o l a t i o n of

Chapter

714H

was

i n

w i l l f u l

and

wanton

d i s r e g a r d

f o r

t h e

r i g h t s of

P l a i n t i f f s

and

l l

C l a s s

Members, e n t i t l i n g

P l a i n t i f f

and

t h e

C l a s s

t o s t a t u t o r y

damages of

up

o

t h r e e t i m e s t h e amount of

c t u a l

damages,

s

p r o v i d e d

i n S e c t i o n

7 1 4 H . 5 ( 4 ) .

43.

P u r s u a n t t o Iowa

Co de S e c t i o n

714H.7,

l a i n t i f f s

have

r e c e i v e d

a p p r o v a l f o r

t h e

f i l i n g

of

h i s p et i t i o n from t h e o f f i c e of h e Iowa A t t o r n e y

G e n e r a l .

WHEREFORE

l a i n t i f f s

and t h e

C l a s s s e e k

r e c o v e r y

of

l l

damages a l l o w a b l e

under

Iowa

C ode Chapter

714H, o g e t h e r

w i t h

l l

i n t e r e s t

and

a t t o r n e y s

f e e s

allowed

t h e r e u n d e r , and

l l o t h e r

r e l i e f a s t h e Court deems p p r o p r i a t e .

BRADY

PRESTON

BROWN C

/ s / Brad J .

B r ady

B r a d J.

Brady,

AT0001138

BBrady@BradyPrestonBrown. om

/ s /

Matthew

L. r e s t o n

M a t t h ew

L . reston,

AT0006314

2735

l

s Avenue

SE

Cedar

R a p i d s ,

IA

52402

Phone: 319/866-9277

Fax:

319/866-9280

MPreston@BradyPrestonBrown. om

PEDDICORD WHARTON

PENCER

HOOK

ARRON

EGMAN

LP

/ s /

R andv

.

W i l h a r b e r

R a n d y .

Wilharber AT0008505

Randy.

[email protected]

Adam

.

Bates

AT0010677

Adam.Bates@Peddicord-law. om


9/9

6800

Lake Drive

u i t e

125

West D es

Moines IA

50266

Phone:

515/243-2100

Fax:

515/243-2132

Randy.

ilharber@Peddicord-law. om

TTORNEYS

FOR

LAINTIFFS

townsend and seils v. templeton rye

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