CDC report risks of store, gas station alcohol promos on kids

Price Ads&Alcohol

Consequences of underage drinking fact sheet

Greater risk for our children .Alcohol is number one abused drug in the country, Is the warning label on alcohol clear?

Economic Report-Problem Drinkers, Underage consumption---Good customers for the Alcohol Industry!

NEW Landmark report and call for action by the NAS 9/03 read overview here

Harm to Youth-
It's A Brain Thing!
AMA Report on harm to the Brain of Youth who drink alcohol.

Ongoing harm-Binge


-Below is a copy of the actual court filing of a historic suit against the alcohol industry for marketing to youth and underage drinkers. this 46 page complaint sets a new precedent in getting honest with the alcohol industry for acts that are clearly predatory, as we have cited along with many others in this country.  Young people have demanded and end to the Predatory Marketing of the Alcohol Industry, and the parents requests, have produced no reduction or real effort to end marketing to youth.  Despite health officials, Recovering persons, the AMA, National Researchers, and so many more, all  requests on on deaf ears.  This class action suit offers hope for millions in harms way related to alcohol consumption.  We will continue to update you on the progress of this action that stands to reform unhealthy practices that have made this industry a great deal of profits, while creating a great deal of costs, and suffering to youth and their family across the country.

 

 IN THE SUPERIOR COURT OF THE DISTRICT OF COLUMBIA

CIVIL DIVISION

Ay man R. Hakki 4892 Macarthur Blvd. Washington, DC 20007

on behalf of himself, all others similarly situated and the general public

Plaintiff,


 

v.

ZIMA COMPANY 5151 East Raines Road Memphis, TN 38118

MIKE'S HARD LEMONADE COMPANY Suite 210,1750 West 75th Ave. Vancouver, BC, V6P 6G2

ADOLPH COORS COMPANY 311 10th Street Golden, CO 80401

COORS BREWING COMPANY

31110th Street Golden, CO 80401

MARK ANTHONY GROUP Suite 210,1750 West 75th Ave. Vancouver, BC, V6P 6G2

MARK ANTHONY INTERNATIONAL

Suite 210,1750 West 75th Ave. Vancouver, BC, V6P 6G2

MARK ANTHONY BRANDS, LTD.

Suite 210,1750 West 75th Ave. Vancouver, BC, V6P 6G2

BACARDI USA, INC. 2100 Biscayne Boulevard Miami, FL 33137


 

Civil Action No.
Judge___________


 

BACARDI LIMITED 65 Pitts Bay Road Pembroke, HM 08 Bermuda

BACARDI & COMPANY LIMITED

Box N-7778

Nassau, The Bahamas

BACARDI GROUP 65 Pitts Bay Road Pembroke, HM 08 Bermuda

KOBRAND CORPORATION

134 East 40th Street New York, NY 10016

HEINEKEN, N.V.

Tweede Weteringplantsoen 21

1017 ZD Amsterdam

HEINEKEN USA, INC.

360 Hamilton Avenue, Suite 1103

White Plains, NY 10601

THE BEER INSTITUTE, INC. 122 C Street, NW, Suite 750 Washington, DC 20001

BROWN-FORMAN CORPORATION 850 Dixie Highway Louisville, KY 40210

BROWN-FORMAN BEVERAGES WORLDWIDE 850 Dixie Highway Louisville, KY 40210

DIAGEO PLC

8 Henrietta Place

London, England WIG 0NB


 

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DIAGEO NORTH AMERICA, INC.

750 East Main Street Stamford, CT 06912

PADDINGTON, LTD. 750 East Main Street Stamford, CT 06912

Defendants.

COMPLAINT

Plaintiff Ayman R. Hakki, through his undersigned attorneys;, alleges as follows for his Complaint.

Nature of this Case

1.         This case arises from a long-running, sophisticated, and deceptive scheme by certain alcoholic beverage manufacturers to market alcoholic beverages to children and other underage consumers. The primary purpose and effect of this ongoing scheme is to generate billions of dollars per year in unlawful revenue derived from sales of alcoholic beverages consumed by children and other underage consumers. This lawsuit seeks to disgorge the unlawful profits these companies have made through the illegal sale and use of their products and to stop the abusive marketing practices that contributed to those illegal sales.

2.        This case is not a broad brush attack on the alcohol industry or on the marketing of alcoholic beverages in general. Alcoholic beverage manufacturers produce a legal product that is responsibly and legally enjoyed by millions of Americans.   Many alcoholic beverage companies are good corporate citizens who fairly, legally, and responsibly market their products to the public, taking appropriate care not to induce or encourage the illegal and dangerous use of

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their products.

3.                                         Plaintiff also does not allege that all alcoholic beverages manufactured by even
these defendants are inappropriately marketed to underage consumers. Defendants are among the
biggest-spending and most sophisticated marketers in the world economy and they know exactly
how to target and reach whatever demographic market segment they choose. Defendants can,
and do, market certain alcoholic beverages (such as champagne, red wine and premium scotch) in
a reasonable and narrow adult-oriented way to an essentially adults-only audience. The scope of
this lawsuit is limited to defendants' deliberate, reckless, and illegal targeting of underage
consumers.

4.                                         Nor does plaintiff complain about the incidental exposure of children to alcoholic
beverage advertising that is properly and reasonably directed to adults. It is impossible to
completely shield our Nation's young people from such a pervasive phenomena as alcohol
advertisements; even legal and responsible advertisements directed only at adults will inevitably
be seen by children on occasion. Defendants, however, cannot use this spillover effect as a red
herring to camouflage and excuse their deliberate efforts to market alcoholic beverages designed
to appeal to underage consumers directly to such underage consumers. This lawsuit seeks redress
only for the deliberate and reckless targeting of underage consumers, not for the incidental or
accidental exposure of children to alcoholic beverage advertising.

5.                                         Alcohol use by children and other underage consumers has reached epidemic
proportions in the United States and throughout the world. Children are beginning to drink
alcohol at a younger age than ever before and heavy binge drinking is at an all time high. This
staggering epidemic results in hundreds of thousands of deaths, injuries and illnesses of children


 

and other underage consumers, as well as thousands of deaths and injuries to innocent members of the public at large. Indeed, alcohol use among underage drinkers is the single most significant factor in each of the top three causes of death among young people aged 17-21. Defendants' conduct greatly exacerbates this underage drinking epidemic and directly contributes to numerous human tragedies caused by illegal underage drinking.

6.                                        In addition to the human suffering inflicted on society, defendants' conduct has
caused, and continues to cause, enormous economic injuries to plaintiff and the classes he seeks
to represent. Parents and guardians in the
District of Columbia and throughout the country are
victimized as billions of dollars in family assets are transferred to defendants as part of the far-
reaching illegal trade in alcoholic beverages. And underage drinkers themselves, cynically
manipulated by sophisticated and well-financed advertising and marketing efforts directed at
them, provide defendants with billions of dollars in ill-gotten profits.

7.                                        Defendants' marketing efforts directed at underage drinkers generate a substantial
portion of their revenues and profits and are crucial to their overall corporate strategy. At least

15-20% of all alcoholic beverages sold in the United States is consumed by underage drinkers, resulting in billions of dollars per year in illegal profits for defendants. The Journal of the American Medical Association recently reported that "conservatively, underage drinkers drank 19.7% of the alcohol consumed in the United States in 1999, accounting for $22.5 billion." That amounts to approximately 1 billion alcoholic drinks consumed by underage drinkers every month. Teenagers - who by definition cannot legally drink any form of alcohol in any state in the country - consume approximately 10 billion bottles of beer alone per year.

8.             Far from passively receiving an unintended windfall from this illegal and deadly

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trade to underage drinkers, defendants instead engage in active, deliberate, and concerted efforts to maximize their profits by attempting to establish brand loyalty among underage consumers and encouraging them to buy their products. Due to the growing awareness of the tragic consequences of underage drinking and the resulting scrutiny of their marketing practices, defendants have engaged in a highly sophisticated, unfair, and deceptive scheme designed to conceal and disguise their efforts to capture the minds, hearts, and wallets of underage consumers. In pursuit of this scheme, defendants have engaged in numerous unfair and deceptive acts and practices, including representations that their products have characteristics, uses, benefits, and approvals for underage consumers that they do not have. These unfair and deceptive acts and practices include: (a) extensive advertising in youth oriented media; (b) the use of advertising themes that appeal to underage drinkers; (c) web sites designed to generate visits by underage consumers with illusory age restrictions that are readily accessible by minors; (d) extensive market and behavioral research regarding underage consumers; (e) the use of cartoon and other promotional characters designed to appeal to underage consumers; (f) repeated and highly publicized denials that their advertising and marketing efforts are directed at underage drinkers when they were fully aware that those denials are false; (g) "public service" advertisements purportedly discouraging underage drinking but which in truth are designed to have, and in fact do have, precisely the opposite effect; (h) sponsoring promotional events on school campuses and at spring break venues where a large portion of the audience is under the age of 21; (i) the sale and distribution of apparel, toys, and promotional items designed to appeal to underage consumers; (j) the widespread use of advertising themes encouraging rule breaking, juvenile, and risky behavior; (k) the use of code-words to conceal and disguise research and

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marketing efforts directed at children and underage drinkers; (1) conducting secret market research into the drinking habits of underage drinkers; (m) the use of secretive and unconventional marketing and research methods; (n) advertising their products in media that disproportionately are watched and read by underage consumers; (o) public denials that their marketing efforts increase the quantity of marketed products that are sold and consumed by underage consumers; (p) making knowingly false statements that alcoholic beverage advertising does not increase the likelihood that underage consumers will commence drinking or increase the quantity that they drink; (q) the deliberate use of actors and spokespersons whom underage consumers perceive as below the legal drinking age; and (r) advertising in media where teenagers are more likely to view alcohol advertisements than adults over the age of 21.

9.                                        The fundamental objectives of these marketing efforts include: (a) breaking down
underage consumers' resistance to, and natural apprehension about, illegally consuming alcohol;
(b) obtaining a competitive advantage over other alcohol manufacturers by aggressively
establishing brand loyalty for their products at as early an age as possible, often while children
are still in their early teens; (c) establishing in the minds of teenagers the impression that the use
of their products is associated with sexual prowess, physical attractiveness, heightened
confidence, and immunity from the consequences of rule breaking and risky behavior.

10.                                   In its "Bacardi By Night" advertising campaign, defendant Bacardi places
advertisements in Stuff, FHM, and Spin magazines (all of which are disproportionately read by
males under the age of 21) featuring themes that are highly appealing to underage consumers,
including references to video games ("made for extended play"). The Bacardi By Night
campaign also features wild, raucous, irresponsible, and immature behavior by models chosen to

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appeal to underage consumers. In one ad, a scantily clad young woman is standing on a barstool pouring a shot of rum down the front of her chest while a young man licks the rum off of her exposed midriff; the tag line reads: "Vegetarian By Day. Bacardi By Night."

11.             Defendant Bacardi also operates internet web sites designed to appeal to underage
consumers. For example, the Bacardi.com website: (a) offers a selection of arcade games
designed to appeal to underage consumers ("Welcome to the online arcade"), including a
drinking game called "virtual quarters" where cartoons of young people bounce quarters into a
glass while experiencing increasingly blurry vision until they pass out; (b) features cartoon icons
of characters that are intentionally designed to appeal to underage consumers and are perceived
by underage consumers to be under the age of 21; (c) has no "age gatekeeper" and does not take
reasonable steps to limit underage consumers from using the site; (d) advertises alcoholic
beverages using themes and language directed at underage consumers such as "the soul of the
Bacardi brand - youthful, high quality, sociable, sensual, and passionate" and "the ultimate party
rum" that "lives on the wild side" and "especially suitable for nighttime consumption in bars and
clubs by those who enjoy partying until the early hours"; (e) promotes contests designed to
appeal to underage consumers; and (f) features rave music and other entertainment designed to
appeal to underage consumers.

12.            Defendant Bacardi also markets its products to underage consumers on other
companies' web sites. For example, Bacardi counsels visitors to one web site on how to "avoid
any dirty looks from mom as you reach for the Bacardi bottle at
8am." This advertisement
provides a recipe for a "breakfast with a bang" consisting of rum, grapefruit, and sugar that is
particularly well suited for those times when "your mom still persistently nags you about having

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fruit with breakfast." In another internet advertisement, Bacardi advises students: "Next time you have a history project to do, brew up a batch of this historical cocktail. It might not get you an 'A' (actually it might land you in a lot of hot water), but I bet you'll never have a more interesting history class!" Another Bacardi-sponsored internet recipe (the "Screaming White Orgasm") invites students to enjoy a "spring fling with Bacardi" on a "Campus Tour," complete with "a night of Bacchnalian delights with Bacardi and the Tour players." Another advertisement by Bacardi provides "TV/Movie-centered drinking games" that "will surely get you wrecked" which are, of course, "best if used with Bacardi White Rum." One such drinking game is based on the teen coming-of-age movie Ferris Bueller 's Day Off: "Whenever someone in the movie says the words 'Ferris' or 'Bueller' you must take one drink." Another drinking game that is "quickly making its way through college campuses" requires "taking a swig every time" the host of a show says certain words. One drinking game promoted by Bacardi is so shockingly irresponsible the rules deserve to be quoted in full: "Drink every time any person in the movie either says a drug's name or does drugs. Watch out for the beginning ... 'We had 2 bags of grass, 75 pellets of mescaline, 5 sheets of high powered blotter acid . ..' Just keep drinking."

13.                                   Advertisements for defendant Kobrand's Alize brand cognac-based beverage are
likewise designed to appeal to underage consumers and appear in magazines such as Complex
magazine which is disproportionately read by males under the age of 21. Kobrand also utilizes
internet pop-up ads for Alize that are directed at underage consumers such as invitations to "join
their online street team" and "get dope freebies and even a chance to cozy with VIPS at parties
across the country."

14.                                   Defendant Brown-Forman tells readers of Glamour magazine (which is


 

disproportionately read by women and girls under the age of 21) that its sweet wine Fontana Candida is "fresh," "bright," and "great with today's catch." The model in this ad is a young looking female with teenage style bangle bracelets surrounded by a fishing net.

15.                                  Defendant Diageo in its "The Captain was here" advertising campaign for Captain
Morgan Spiced Rum tells readers of
Maxim and Stuff magazines (which are disproportionately
read by males under the age of 21) to "Take your pants off and stay a while." This ad features six
young snowboarders drinking rum drinks. In addition, Diageo's
Captain Morgan Rum website
features cartoon characters, young women named the Morganettes, and video games. The
website also promotes drinking during summer vacation (when schools are out), proclaiming that
"Summer isn't over until the Captain says it is."

16.                                  Defendant Coors also markets its products to underage consumers through joint
marketing efforts with motion picture companies, including in connection with movies whose
primary intended audience is underage consumers. For example, Coors places television
advertisements telling viewers to "look for the Coors Light Twins in the upcoming Scary Movie
3," a motion picture that is heavily marketed to underage consumers and whose intended
audience is primarily underage consumers.

17.                                  Defendant Heineken in an advertisement for its Heineken brand beer shows two
bottles of Heineken beer duct taped to a Nintendo video game controller. The tag line for the ad
reads "It's game day" and "Add two more features to your controller." In another advertisement
for its Amstel Light brand of beer, Defendant Heineken advertises a Mardi Gras sweepstakes in
Stuff magazine (which is disproportionately read by males under the age of 21). The tag line
reads "Mardi Gras and a mansion ON US. Wild women ON YOU."    These advertisements are

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purposely designed to appeal to underage consumers and are placed in publications that have a disproportionately high level of underage readers.

18.              As the World Health Organization has noted, the "large alcohol manufacturers
are trying to establish a habit of drinking alcohol at a very young age" and "our youth are a key
target of the marketing practices of the alcohol industry." In a stunning admission in an
interview with a trade publication, a senior executive of a major beer manufacturer has admitted
that his company's marketing efforts are focused on "making sure that we capture the mind,
heart, and stomach of every new generation of beer drinkers." As defendants well know, and
with devastating effect have put into practice, "capturing the mind" and heart of a new generation
requires reaching that generation before they become adults.

19.            The core of plaintiff s case against these defendants arises out of the following
wholly indisputable facts. First, it is illegal and harmful for underage consumers to purchase and
consume defendants' alcoholic beverage products. Second, defendants receive at least a billion
dollars per year as a result of the illegal and harmful trade in alcoholic beverages to underage
consumers. Third, at least 10 million underage consumers are exposed to defendants' marketing
efforts every day and defendants know this to be true. Fourth, defendants know and intend that
their marketing efforts appeal to underage consumers (particularly older teenagers). Fifth,
defendants' marketing efforts are designed to establish a brand preference for their products and
to promote positive feelings about both the consumption of alcohol in general and the
consumption of defendants' products in particular. Sixth, defendants' revenues and profits
increase in direct proportion to the number of teenagers who have a brand preference for their
products and who have positive feelings about those products. Seventh, defendants know that

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increased advertising expenditures in media with a substantial underage audience will yield increased sales of the product advertised among all demographic groups comprising that audience, including underage consumers.   Eighth, defendants are fully capable of more narrowly focusing their marketing efforts on adults so that substantially fewer underage consumers are exposed to those marketing efforts, but defendants choose not to do so because they believe their revenues and profits would be negatively affected. Ninth, the hundreds of millions of alcohol advertising messages viewed by underage consumers possess absolutely no redeeming social value other than the enrichment of the defendants.

20.           These indisputable facts - even without the numerous other factual allegations
and legal claims contained in this complaint - establish a clear prima facie showing of wrongful,
unjust, and illegal conduct by the defendants. For example, a company is unjustly enriched, at
the very least, when it knowingly and systematically profits from the illegal and harmful trade in
dangerous products to children. A company is also negligent, if not reckless and wanton, when it
fails to take reasonable steps to avoid inducing or encouraging the illegal and harmful purchase
and use of a dangerous product by minors. And a company commits an unfair, deceptive,
unconscionable, and unlawful trade practice when it deliberately engages in sophisticated and
extensive marketing practices with the purpose and effect of substantially increasing the illegal
sales of its dangerous products to children.

Jurisdiction and Venue

21.           Plaintiff brings this action under the District of Columbia Consumer Protection
Procedures Act, D.C. Code Ann. § 28-3901 et seg., and under the common law of the District of
Columbia, to obtain equitable relief and to recover damages and costs of suit for injuries

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sustained as a result of defendants' violations of District of Columbia law.

22.                 Each of the defendants is found and transacts business in the District of Columbia
and derives substantial revenues from the sale of their products in the District of Columbia.

23.                 Plaintiff Ayman R. Hakki is a resident of the District of Columbia and was injured
by defendants' conduct as alleged herein.

24.                 Each of the defendants has sufficient contacts with the District of Columbia such
that it is fair and reasonable to require them to come here to defend this action.

25.                 Without limiting the generality of the foregoing, each of the defendants directly or
through authorized agents acting within the scope of their authority has: (a) caused tortious
damage by acts or omissions committed in the District of Columbia; (b) contracted to supply or
obtain goods or services in the District of Columbia; (c) intentionally availed themselves of the
benefits of doing business in the District of Columbia; (d) manufactured, marketed, promoted,
sold, or distributed their products in the District of Columbia; (e) caused tortious damage in the
District of Columbia by committing acts or omissions outside the District of Columbia while (i)
regularly doing or soliciting business in the District of Columbia or (ii) engaging in other
persistent courses of conduct in the District of Columbia or (iii) deriving substantial revenue
from goods used or consumed or services rendered in the District of Columbia.

26.                 Plaintiff and class members individually claim damages, including punitive, treble
or statutory damages, of less than $75,000 and specifically deny any attempt to state a claim
under federal law.

27.                 Defendant The Beer Institute, Inc. is a District of Columbia corporation and a
resident of the District of Columbia.

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28.           The District of Columbia has a substantial governmental interest in enforcing its
consumer protection laws and ensuring that its residents and those that do business in the District
of Columbia comply with those laws, and the defendants collectively have significant,
substantial, and ongoing contacts with the District of Columbia related to the subject of this
lawsuit.

The Parties

29.                 Plaintiff Ayman R. Hakki is a resident of Washington, D.C.

30.                 Defendant Coors Brewing Co., is a corporation headquartered at 311 10th Street,
Golden, Colorado and is registered to do business in the District of Columbia. Defendant
Adolph Coors Company is a corporation headquartered at 311 10th Street, Golden, Colorado.
Defendant Zima Company is a subsidiary of Defendant Coors Brewing Co. with its principal
place of business at 5151 East Raines Road, Memphis, Tennessee and is also registered to do
business in the District of Columbia. Defendants Coors Brewing Co., Adolph Coors Company,
and Zima Company are collectively referred to herein as the "Coors Defendants" or "Coors".
The Coors Defendants market, sell, and distribute alcoholic beverage products in this judicial
district and throughout the United States, including alcoholic beverage products under the
following brand names: Coors Light Beer, Zima, and Keystone Light.

31.                                    Defendant Bacardi Limited is a privately held company with its principal place of
business at 65 Pitts Bay Road, Pembroke, Hamilton, Bermuda. Defendant Bacardi USA, Inc. is a
corporation with its principal place of business at 2100 Biscayne Boulevard, Miami, Florida and
is registered to do business in the District of Columbia. Defendant Bacardi & Company Limited
is a privately held company with its principal place of business in Nassau, The Bahamas.

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Defendant Bacardi Group is an unincorporated association with its principal place of business in Hamilton, Bermuda, Defendants Bacardi Limited, Bacardi USA, Inc., Bacardi & Company Limited, and Bacardi Group are collectively referred to herein as "Bacardi" or the "Bacardi Defendants". The Bacardi Defendants market, sell, and distribute alcoholic beverage products in this judicial district and throughout the United States, including the alcoholic beverage product

Bacardi Rum.

32.                                     Defendant Kobrand Corporation ("Kobrand") is a corporation with its
headquarters and principal place of business at 134 East 40th Street, New York, New York.
Kobrand markets, sells, and distributes alcoholic beverage products in this judicial district and
throughout the United States, including the alcoholic beverage product Alize.

33.                 Defendant The Beer Institute, Inc. ("The Beer Institute") is a District of Columbia
nonprofit corporation with its residence and principal place of business at 122 C Street, N.W.,
Suite 750, Washington, D.C.

34.                 Defendant Heineken, N.V. is a limited liability entity headquartered in the
Netherlands. Defendant Heineken USA, Inc. is a corporation headquartered at 360 Hamilton
Avenue, White Plains, New York. Defendants Heineken, N.V. and Heineken USA, Inc. are
collectively referred to herein as "Heineken" or the "Heineken Defendants". The Heineken
Defendants market, sell, and distribute alcoholic beverage products in this judicial district and
throughout the United States, including alcoholic beverage products under the following brand
names: Heineken Beer and Amstel Light Beer.

35.                 Defendant Brown-Forman Corporation is a corporation headquartered at 850
Dixie Highway, Louisville, Kentucky. Defendant Brown-Forman Beverages Worldwide is an

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unincorporated association also headquartered at 850 Dixie Highway in Louisville, Kentucky. Defendants Brown-Forman Corporation and Brown-Forman Beverages Worldwide are collectively referred to herein as the "Brown-Forman Defendants" or "Brown-Forman". The Brown-Forman Defendants market, sell, and distribute alcoholic beverage products in this judicial district and throughout the United States, including alcoholic beverage products under the following brand names: Jack Daniels and Fontana Candida Wine,

36.                 Defendant Diageo PLC is a limited liability entity headquartered in London,
England. Defendant Diageo North America, Inc. is a corporation with its principal place of
business at 750 East Main Street, Stamford, Connecticut. Defendant Paddington, Ltd. is a
limited liability entity also located in Stamford, Connecticut. Defendants Diageo PLC, Diageo
North America, Inc., and Paddington, Ltd., are collectively referred to herein as the "Diageo
Defendants" or "Diageo". The Diageo Defendants market, sell, and distribute alcoholic beverage
products in this judicial district and throughout the United States, including alcoholic beverage
products under the following brand names: Smirnoff Ice, Smirnoff Vodka, Jose Cuervo Tequila,
Captain Morgan Rum, Jose Cuervo Pre-Mixed Margarita, and Goldschlager Cinnamon
Schnapps.

37.                                     Defendants Mark Anthony Group, Mark Anthony International, and Mark
Anthony Brands, Ltd. are privately held companies headquartered in Vancouver, British
Columbia, Canada. Defendant Mike's Hard Lemonade Company is an affiliate of Defendants
Mark Anthony Group, Mark Anthony International, and Mark Anthony Brands, Ltd. Defendants
Mark Anthony Group, Mark Anthony International, Mark Anthony Brands, Ltd., and Mike's
Hard Lemonade Company are collectively referred to herein as the "Mark Anthony Defendants"

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or "Mark Anthony". The Mark Anthony Defendants market, sell, and distribute alcoholic beverage products in this judicial district and throughout the United States, including the alcoholic beverage products Mike's Hard Lemonade and Mike's Hard Ice Tea.

Class Action Allegations

3 8.       Plaintiff brings this case individually on behalf of himself and, pursuant to D.C. SCR-Civ. R. 23(b)(3), 23(b)(l)(A), and 23(b)(2), on behalf of the following classes (the "Classes"):

(A)    a Guardian Class consisting of all persons who were or are parents or
guardians of children whose funds were used to purchase alcoholic beverages
marketed by defendants which were consumed without their prior knowledge by
their children under the age of 21 during the period 1982 to the present (the "Class
Period"), excluding defendants and their affiliates, officers, directors, and
employees;

(B)            an Injunctive Class consisting of the parents and guardians of all
children currently under the age of 21.

 

39.                 Although the exact size of the Classes are currently unknown to plaintiff, the total
number of class members exceeds several thousand. Accordingly, each of the Classes is
sufficiently numerous such that joinder of all class members would be impracticable.

40.                 The claims of plaintiff are typical of the claims of the respective Classes. Plaintiff
has no conflicts of interests with any other members of the respective Classes and will fairly and
adequately protect the interests of any absent Class members. Plaintiff has retained competent
legal counsel with extensive experience in class action and consumer protection litigation.

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41.       There exist numerous questions of law and fact common to the Classes, including: (a) whether defendants engaged in a deceptive scheme to market alcoholic beverages to underage consumers; (b) whether the acts alleged herein as being committed by defendants constitute violations of law; (c) whether plaintiff is entitled to injunctive relief; (d) whether defendants purposefully marketed alcoholic beverages to underage consumers; (e) whether defendants negligently or recklessly marketed alcoholic beverages to underage consumers; (f) whether defendants actively concealed the wrongs alleged herein; (g) whether defendants' acts as alleged herein were trade practices; (h) whether defendants' acts and omissions alleged herein were unfair, unconscionable, or deceptive; (i) whether defendants represented that their goods have uses, characteristics, approvals, or benefits that they do not have; (]) whether defendants advertised goods without the intent to sell them as advertised or offered; (k) whether defendants' acts alleged herein were committed in the conduct of trade or commerce; (1) whether defendants' acts as alleged herein have the capacity, tendency, or likelihood to deceive or take advantage of consumers; (m) whether there is a remedy at law to adequately compensate the Classes for defendants' wrongful conduct; (n) whether it would shock the conscience or be manifestly unfair for defendants to retain the revenues and profits they derive from the illegal sale of their products to underage consumers; (o) whether the injuries caused by defendants' wrongful conduct are outweighed by any countervailing benefits to society or competition; (p) whether defendants used reasonable care to avoid inducing or encouraging the illegal and dangerous purchase and use of their products by underage consumers; (q) whether defendants' conduct as alleged herein was unreasonable, immoral, unscrupulous, or unethical; (r) whether defendants placed advertisements in media or at times where the audience consisted of a disproportionately large percentage of

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underage consumers; (s) whether defendants employed advertising themes, methods, and characters that substantially or primarily appeal to underage consumers; and (t) whether defendants took advantage of consumers' inability to reasonably protect their interests because of age. These and other questions of law and fact which are common to the Classes predominate over any questions which affect only individual Class members.

42.                 Class action treatment of this case is the superior, if not the only, method for the
fair and efficient adjudication of this controversy because, among other reasons, such treatment
will permit a large number of similarly situated persons and entities to prosecute their claims
simultaneously and efficiently without the unnecessary duplication of evidence, effort, and
expense that numerous individual cases would engender. In addition, the class action mechanism
is the only method by which certain Class members with small claims could, as a practical
matter, seek redress for the wrongs committed by defendants as alleged in this case. The benefits
of class action treatment for this case substantially outweigh the difficulties, if any, which may
arise in the management of this case as a class action. There are no unusual difficulties which
may arise in the management of this case as a class action.

43.                 The prosecution of separate actions by individual members of the Classes would
create a substantial risk of inconsistent or varying adjudications which would establish
incompatible standards of conduct for defendants. Without limiting the generality of the
foregoing, injunctive relief sought by plaintiff if adjudicated individually would establish
inconsistent or varying standards regarding permissible advertising and marketing practices.

44.                                    With respect to the allegations contained herein, defendants have acted on
grounds which are generally applicable to the Classes. Accordingly, declaratory and injunctive

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relief with respect to the Classes as a whole is appropriate in this case. Without limiting the generality of the foregoing, defendants have engaged in advertising and marketing efforts which are generally applicable to the Classes as a whole.

Factual Background Defendants' Marketing Efforts Directed at Underage Consumers

45.                 Defendants believe that the establishment of a brand preference among consumers
for a particular alcoholic beverage product is essential for that product's success in the
marketplace. Defendants also believe that it is crucial to establish a brand preference at a very
early age. Indeed, defendants understand that by the time a potential consumer reaches the legal
drinking age, that consumer's brand preference for certain alcoholic beverages has already been
well established. To be successful in gaining and holding their all-important market share,
defendants believe that they must reach and persuade underage consumers to embrace their
product. Defendants understand that it is simply too late to wait until a consumer is of a legal
drinking age to start their marketing efforts.

46.                 Establishing a brand preference among teenagers is particularly important for the
types of alcoholic beverages heavily consumed by young adults, such as low and mid-priced beer
and so-called "alcopops" such as Mike's Hard Lemonade, Zima, and Bacardi Silver. The reason
is very simple: adults in their early to mid-twenties drink far, far more alcohol than older adults.
The brand preference 20-year-olds have for alcoholic beverages will stay with them throughout
this "prime drinking age" thereby earning the owner of such brands a vast and steady source of
revenues and profits. This phenomenon is known to defendants as "stickiness." And the more
extensive defendants' marketing efforts directed at teenagers are, the more "sticky" their products

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become in the minds and hearts of young drinkers.

47.                  Defendants employ a wide variety of marketing efforts directed at underage
consumers. These efforts include extensive print and broadcasting advertisements designed to
appeal to underage consumers and the placement of such advertisements in media and at times
designed to disproportionately reach underage consumers.

48.                  Defendants* print and broadcasting advertisements feature themes designed to
appeal to underage drinkers. These themes include the association of sexual prowess and
physical attractiveness with the use of alcoholic beverage products; drinking alcohol makes
people more grown-up and more confident; drinking alcohol makes people part of the hip crowd;
the "top objective" of young drinkers is "to get wild, blitzed and be crazy" (as one defendant's
market planning report put it); the introduction and promotion of drinking rituals as a cool way to
bond with other hip young people and break the ice with the opposite sex; and generally
promoting rule breaking, risky behavior, and excessive alcohol consumption as socially
acceptable, even ideal, norms of behavior. Defendants are fully aware that these themes strongly
appeal to underage drinkers because they and their agents have conducted extensive research into
the drinking habits and marketing preferences of underage drinkers. Teenagers in the United
States are bombarded with billions of advertising messages touting these themes every year,
directly resulting in billions of dollars in increased illegal sales made by defendants.

49.                  Defendants use cartoons, logos, and other marketing props designed to appeal to
children in their alcohol advertising in order to establish brand loyalty and to breakdown
children's resistance to alcohol use. Defendants know that children as young as ten years old
often express a brand preference for beer and other alcoholic beverage products as a result of

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Defendants' use of advertising that appeals to children. Defendants also know that brand preferences established at a young age will endure throughout the teenage years and early adulthood.

50.                 Defendants' advertising often features actors and models engaged in activities that
primarily appeal to underage consumers, such as the playing of video games.

51.                 In order to maximize the effectiveness of their marketing directed at underage
consumers, defendants conduct extensive research concerning underage consumers, including
research regarding the buying habits, drinking habits, and social attitudes of children. For
example, defendants and their agents conduct extensive focus groups and interviews of
consumers who have recently turned 21 years old. These interviews and focus groups reveal, and
are designed to reveal, marketing information concerning underage consumers. Indeed, the
interviewees and focus group participants are explicitly asked questions regarding their attitudes,
brand preferences, and drinking habits they had prior to reaching the age of 21. Knowing that
such research would expose them to heightened scrutiny were it to become public knowledge,
defendants engage in a concerted effort to conceal and disguise these research efforts. These
efforts to conceal and disguise their research concerning underage consumers include using code
words to describe underage market segments; the use of secretive and unconventional marketing
consultants; conducting research in foreign countries; and relying on market research concerning
underage consumers conducted by advertising agencies and others who cannot be directly linked
to defendants.

52.                                    Defendants knowingly and deliberately place their print advertisements in
publications which are disproportionately read by underage consumers. Indeed, many such

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advertisements are read by more underage consumers than consumers of legal drinking age. Incredibly, defendants themselves have stated that magazine advertisements for alcoholic beverages are acceptable and appropriate where only 50% of the magazine's readership is old enough to legally purchase alcoholic beverages.

53.                                   Defendants knowingly and deliberately place their broadcast advertisements on
programs and at times that reach a disproportionately high number of underage consumers.
Indeed, many such advertisements are placed on programs where the majority of viewers are
twelve to twenty years old, even though only 15% of the population (and only 10% of the
television viewing audience) is between the ages of twelve and twenty.

54.                                   Defendants knowingly and deliberately design and operate their web sites to
appeal to underage consumers. Defendants' web sites offer games, contests, graphics, text,
merchandise, and other features that are designed with the purpose and effect of appealing to
underage consumers. Defendants also purposely design and operate their so-called "age
gatekeepers" so that underage consumers can easily access their web sites.

55.                                   Defendants conduct marketing programs on college campuses and at spring break
venues in order to establish brand loyalty and increase the quantity of alcoholic beverages
purchased and consumed by underage drinkers.

56.                                   Defendants knowingly and purposely sell and distribute apparel, toys, and other
logo merchandise designed to appeal to underage consumers.

57.                                   Defendants knowingly and purposely use actors, models, and spokespersons who
appeal to underage consumers and whom underage consumers perceive as being younger than the
legal drinking age.

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58.                 Defendants place alcohol products in films and television programs that appeal to
underage consumers including; (a) "PG" and "PG-13" films featuring animal and coming-of-age
themes; (b) films for which defendants know that the primary target market is under the age of
21; and (c) the majority of the 15 television shows most popular with teenagers.

59.                 Defendants promote, sponsor, and support alcohol-soaked spring break and
summer break "party tours" to foreign countries targeted at U.S. citizens under the age of 21.
These party tours feature: (a) "50 hours of free drinking;" (b) Bacardi "rum showers" where
students stand "open-mouthed under a spray and swallow as much rum as they can;" (c) "party
passes" where students pay $75 for a wrist band that entitles them to "all-you-can-drink"
privileges at bars and night clubs; (d) huge beach parties featuring free or very cheap beer, wet t-
shirt contests, and other activities that appeal to underage consumers.

60.                                     Defendant Bacardi wilfully, intentionally, recklessly and negligently engages in
extensive unfair and deceptive marketing efforts directed at underage consumers, including
marketing efforts that represent that its products have characteristics, uses, benefits, and
approvals for underage consumers that they do not have. These unfair and deceptive marketing
efforts include: (a) radio advertisements with substantial appeal to underage consumers that are
placed on stations and at times that have a disproportionately large underage audience; (b)
magazine advertisements with substantial appeal to underage consumers that are placed in
magazines that have a disproportionately large underage readership; (c) internet marketing with
substantial appeal to underage consumers that is easily accessible by underage consumers and is
in fact viewed by substantial numbers of underage consumers; (d) sponsorship of events where a
disproportionately large portion of participants and the audience are under the age of 21; (e)

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targeted marketing and sponsored promotions of alcoholic beverages to underage U.S. citizens while they are in Mexico or other places outside the United States to encourage or induce them to illegally consume alcoholic beverages upon their return to the United States; and (f) substantial research regarding underage consumers.

61.                Defendant Bacardi has made false, unfair, and deceptive representations that its
advertising and marketing efforts are in compliance with the Distilled Spirits Council of the
United States, Inc's Code of Good Practice for Distilled Spirits Advertising and Marketing (the
"DISCUS Code"). In reality, Bacardi knowingly and repeatedly violates the terms of the
DISCUS Code, including restrictions regarding (a) the portrayal of "objects, images, or cartoon
figures that are popular" with underage consumers; (b) "claims or representations that individuals
can obtain social, professional, educational, or athletic success or status as a result of beverage
alcohol consumption;" (c) advertising and marketing materials that "show a distilled spirits
product being consumed abusively or irresponsibly;" (d) advertising or marketing materials that
are not "dignified, modest, or in good taste;" (e) advertising or marketing materials that "claim or
depict sexual prowess as a result of beverage alcohol consumption;" (f) advertising or marketing
materials that "promote the intoxicating effects of beverage alcohol consumption;" (g)
advertising or marketing materials that "imply illegal activity of any kind;" (h) advertising or
marketing activity "associated with anti-social or dangerous behavior;" (i) advertising or
marketing materials that "degrade the image, form, or status of women, men, or of any ethnic,
minority, sexually-oriented, religious, or other group;" and (j) advertising or marketing materials
that are not "intended for adults of legal purchase age."

62.                 Defendant Kobrand wilfully, intentionally, recklessly and negligently engages in

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extensive unfair and deceptive marketing efforts directed at underage consumers, including marketing efforts that represent that its products have characteristics, uses, benefits, and approvals for underage consumers that they do not have. These unfair and deceptive marketing efforts include: (a) magazine advertisements with substantial appeal to underage consumers that are placed in magazines that have a disproportionately large underage readership; and (b) internet marketing with substantial appeal to underage consumers that is easily accessible by underage consumers and is in fact viewed by substantial numbers of underage consumers.

63.                Defendant Kobrand has made false, unfair, and deceptive representations that its
advertising and marketing efforts are in compliance with the DISCUS Code. In reality, Bacardi
knowingly and repeatedly violates the terms of the DISCUS Code, including restrictions
regarding (a) "claims or representations that individuals can obtain social, professional,
educational, or athletic success or status as a result of beverage alcohol consumption;" (b)
advertising or marketing materials that are not "dignified, modest, or in good taste;" (c)
advertising or marketing materials that "claim or depict sexual prowess as a result of beverage
alcohol consumption;" (d) advertising or marketing materials that "promote the intoxicating
effects of beverage alcohol consumption;" (e) advertising or marketing materials that "imply
illegal activity of any kind;" (f) advertising or marketing activity "associated with anti-social or
dangerous behavior;" (g) advertising or marketing materials that "degrade the image, form, or
status of women, men, or of any ethnic, minority, sexually-oriented, religious, or other group;"
and (h) advertising or marketing materials that are not "intended for adults of legal purchase
age."

64.                                   Defendant Brown-Forman wilfully, intentionally, recklessly and negligently

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engages in extensive unfair and deceptive marketing efforts directed at underage consumers, including marketing efforts that represent that its products have characteristics, uses, benefits, and approvals for underage consumers that they do not have. These unfair and deceptive marketing efforts include: (a) magazine advertisements with substantial appeal to underage consumers that are placed in magazines that have a disproportionately large underage readership; and (b) radio advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience.

65.                 Defendant Brown-Forman has made false, unfair, and deceptive representations
that its advertising and marketing efforts are in compliance with the DISCUS Code. In reality,
Brown-Forman knowingly and repeatedly violates the terms of the DISCUS Code, including
restrictions regarding (a) "claims or representations that individuals can obtain social,
professional, educational, or athletic success or status as a result of beverage alcohol
consumption;" (b) advertising or marketing materials that are not "dignified, modest, or in good
taste;" (c) advertising or marketing materials that "claim or depict sexual prowess as a result of
beverage alcohol consumption;" (d) advertising or marketing materials that "promote the
intoxicating effects of beverage alcohol consumption;" (e) advertising or marketing materials that
"imply illegal activity of any kind;" and (f) advertising or marketing materials that are not
"intended for adults of legal purchase age."

66.                                    Defendant The Beer Institute is wholly controlled and directed by defendants and
other alcoholic beverage manufacturers. No governmental or regulatory authority exercises any
oversight or control over the affairs or policies of The Beer Institute. The Beer Institute functions
as a an important facilitator, accomplice, and participant in the alcoholic beverage manufacturers'

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unfair and deceptive scheme to market alcoholic beverages to children and other underage consumers. Without limiting the generality of the foregoing, The Beer Institute (a) assists defendants in making false statements regarding defendants marketing efforts and underage consumers; (b) helps defendants develop and implement strategies and tactics to conceal their marketing efforts directed at underage consumers; (c) actively discourages alcoholic beverage manufacturers from criticizing or calling attention to any other alcoholic beverage manufacturers' marketing efforts directed at underage consumers; (d) makes false statements regarding the marketing efforts and trade practices of defendants; (e) serves as a clearing house and depository for information defendants utilize in developing, implementing, and perpetuating their illegal scheme to unfairly and deceptively market alcoholic beverages to underage consumers; (f) acts as a shield to deflect, obscure, and discourage public complaints about the alcohol industry's marketing practices toward underage consumers; (g) represents that it has a sponsorship, approval, status, affiliation, certification, or connection that it does not have, including passing itself off as a governmental or regulatory body that is independent of the alcoholic beverage manufacturers; and (h) aids and abets the defendant alcoholic beverage manufacturers in violating the District of Columbia Consumer Protection Procedures Act.

67.       Defendant Diageo wilfully, intentionally, recklessly and negligently engages in extensive unfair and deceptive marketing efforts directed at underage consumers, including marketing efforts that represent that its products have characteristics, uses, benefits, and approvals for underage consumers that they do not have. These unfair and deceptive marketing efforts include: (a) radio advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience; (b)

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magazine advertisements with substantial appeal to underage consumers that are placed in magazines that have a disproportionately large underage readership; (c) internet marketing with substantial appeal to underage consumers that is easily accessible by underage consumers and is in fact viewed by substantial numbers of underage consumers; (d) sponsorship of events where a disproportionately large portion of participants and the audience are under the age of 21; (e) television advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience; and (f) substantial research regarding underage consumers.

68.      Defendant Diageo has made false, unfair, and deceptive representations that its advertising and marketing efforts are in compliance with the DISCUS Code. In reality, Diageo knowingly and repeatedly violates the terms of the DISCUS Code, including restrictions regarding (a) the portrayal of "objects, images, or cartoon figures that are popular" with underage consumers; (b) "claims or representations that individuals can obtain social, professional, educational, or athletic success or status as a result of beverage alcohol consumption;" (c) advertising and marketing materials that "show a distilled spirits product being consumed abusively or irresponsibly;" (d) advertising or marketing materials that are not "dignified, modest, or in good taste;" (e) advertising or marketing materials that "claim or depict sexual prowess as a result of beverage alcohol consumption;" (f) advertising or marketing materials that "promote the intoxicating effects of beverage alcohol consumption;" (g) advertising or marketing materials that "imply illegal activity of any kind;" (h) advertising or marketing activity "associated with anti-social or dangerous behavior;" (i) advertising or marketing materials that "degrade the image, form, or status of women, men, or of any ethnic, minority, sexually-oriented,

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religious, or other group;" and (j) advertising or marketing materials that are not "intended for adults of legal purchase age."

69.                 Defendant Heineken wilfully, intentionally, recklessly and negligently engages in
extensive unfair and deceptive marketing efforts directed at underage consumers, including
marketing efforts that represent that its products have characteristics, uses, benefits, and
approvals for underage consumers that they do not have. These unfair and deceptive marketing
efforts include: (a) radio advertisements with substantial appeal to underage consumers that are
placed on stations and at times that have a disproportionately large underage audience; (b)
magazine advertisements with substantial appeal to underage consumers that are placed in
magazines that have a disproportionately large underage readership; (c) internet marketing with
substantial appeal to underage consumers that is easily accessible by underage consumers and is
in fact viewed by substantial numbers of underage consumers; (d) sponsorship of events where a
disproportionately large portion of participants and the audience are under the age of 21; (e)
television advertisements with substantial appeal to underage consumers that are placed on
stations and at times that have a disproportionately large underage audience; and (f) substantial
research regarding underage consumers.

70.                 Defendant Heineken has made false, unfair, and deceptive representations that its
advertising and marketing efforts are in compliance with the Beer Institute Code. In reality,
Heineken knowingly and repeatedly violates the terms of the Beer Institute Code, including
restrictions regarding (a) the use of "any symbol, language, music, gesture, or cartoon character"
that appeals to underage consumers; (b) the use of models and actors that do not reasonably
appear to be over 21 years of age; (c) advertising and marketing materials "placed in magazines,

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on television or on radio" where most of the audience is below the legal drinking age and where more than 30% of the audience is below the legal drinking age; (d) the employment of entertainment figures or groups that appeal to underage consumers; (e) advertising and marketing materials that "portray or imply illegal activity of any kind;" (f) advertising or marketing materials that "depict situations where beer is being consumed excessively, in an irresponsible way, or in any way illegally;" (g) advertising or marketing materials that "portray persons in a state of intoxication or in any way suggest that intoxication is acceptable conduct; (h) advertising or marketing materials that contain "lewd or indecent language or images;" (i) advertising or marketing materials that "portray sexual passion, promiscuity or any other amorous activity as a result of consuming beer;" (j) advertising or marketing materials that "refer to any intoxicating effect that the product may produce;" and (k) advertising or marketing activities that "directly or indirectly degrade studying."

71.       Defendant Coors wilfully, intentionally, recklessly and negligently engages in extensive unfair and deceptive marketing efforts directed at underage consumers, including marketing efforts that represent that its products have characteristics, uses, benefits, and approvals for underage consumers that they do not have. These unfair and deceptive marketing efforts include: (a) radio advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience; (b) magazine advertisements with substantial appeal to underage consumers that are placed in magazines that have a disproportionately large underage readership; (c) internet marketing with substantial appeal to underage consumers that is easily accessible by underage consumers and is in fact viewed by substantial numbers of underage consumers; (d) sponsorship of events where a

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disproportionately large portion of participants and the audience are under the age of 21; (e) television advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience; and (f) substantial research regarding underage consumers.   Defendant Coors routinely and intentionally advertises its alcoholic beverage products in publications read by a disproportionately large percentage of underage consumers using themes designed to appeal to underage consumers. Defendant Coors' television and radio advertisements appear on programs and at times which are viewed by a disproportionately large percentage of underage consumers. For example, underage consumers are more likely than adults to hear radio advertisements for Coors Light brand beer.   These advertisements are purposely designed to appeal to underage consumers and are placed in media that have a disproportionately high level of underage viewers.

72.      Defendant Coors has made false, unfair, and deceptive representations that its advertising and marketing efforts are in compliance with the Beer Institute Code. In reality, Coors knowingly and repeatedly violates the terms of the Beer Institute Code, including restrictions regarding (a) the use of "any symbol, language, music, gesture, or cartoon character" that appeals to underage consumers; (b) the use of models and actors that do not reasonably appear to be over 21 years of age; (c) advertising and marketing materials "placed in magazines, on television or on radio" where most of the audience is below the legal drinking age and where more than 30% of the audience is below the legal drinking age; (d) the employment of entertainment figures or groups that appeal to underage consumers; (e) advertising and marketing materials that "portray or imply illegal activity of any kind;" (f) advertising or marketing materials that "depict situations where beer is being consumed excessively, in an irresponsible

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way, or in any way illegally;" (g) advertising or marketing materials that "portray persons in a state of intoxication or in any way suggest that intoxication is acceptable conduct; (h) advertising or marketing materials that contain "lewd or indecent language or images;" (i) advertising or marketing materials that "portray sexual passion, promiscuity or any other amorous activity as a result of consuming beer;" (j) advertising or marketing materials that "refer to any intoxicating effect that the product may produce;" and (k) advertising or marketing activities that "directly or indirectly degrade studying."

73.       Defendant Mark Anthony wilfully, intentionally, recklessly and negligently engages in extensive unfair and deceptive marketing efforts directed at underage consumers, including marketing efforts that represent that its products have characteristics, uses, benefits, and approvals for underage consumers that they do not have. These unfair and deceptive marketing efforts include: (a) radio advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience; (b) magazine advertisements with substantial appeal to underage consumers that are placed in magazines that have a disproportionately large underage readership; (c) internet marketing with substantial appeal to underage consumers that is easily accessible by underage consumers and is in fact viewed by substantial numbers of underage consumers; (d) sponsorship of events where a disproportionately large portion of participants and the audience are under the age of 21; (e) television advertisements with substantial appeal to underage consumers that are placed on stations and at times that have a disproportionately large underage audience; and (f) substantial research regarding underage consumers.

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The Effects of Defendants' Wrongful Conduct

74.                 The purpose and effect of defendants' marketing efforts directed at underage
consumers is to: (a) increase defendants' revenues and profits derived from the sale of alcoholic
beverages purchased or consumed by underage drinkers; (b) establish brand loyalty among
underage consumers so that they will be loyal customers when they reach legal drinking age; (c)
increase the likelihood that young people will commence the consumption of alcoholic beverages
prior to the legal drinking age; and (d) increase the quantity of alcoholic beverages consumed by
the society at large, thereby ensuring a steady revenue and profit stream years and decades into
the future. Defendants' marketing efforts directed at underage consumers have been astoundingly
successful on all four counts.

75.                 The revenues and profits derived from alcoholic beverages consumed by underage
drinkers are enormous. At least 15-20% of all alcoholic beverages sold in the United States are
consumed by underage drinkers. The profits earned by defendants from this illegal trade greatly
exceed $1 billion per year. Defendants view these profits and revenues as crucial to their overall
financial success.

76.                 Defendants' marketing efforts directed at underage consumers have also been very
successful at establishing brand preferences among children and young adults too young to
legally consume alcohol. By the time a young adult reaches the age of 21, he or she typically
already has a brand preference for alcoholic beverages. Indeed, a majority of young people in the
16-20 age group have a brand preference for beer and other alcoholic beverages. Even more
troubling, significant percentages of children in the 12-15 age group (and even many children as
young as eight years old) have a favorite brand of beer or other alcoholic beverage. The

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establishment of these brand preferences among underage consumers is a direct consequence of defendants' deliberate marketing efforts targeting those consumers.

77.                 Defendants' marketing efforts directed at underage consumers have also been very
successful at increasing the likelihood that young people will begin drinking alcoholic beverages
before they reach the legal drinking age.

78.                 Defendants' marketing efforts directed at underage consumers have also been
highly effective at increasing the quantity of alcoholic beverages consumed by underage drinkers
as well as the society as a whole over time. Contrary to defendants' loud public assertions, there
is a direct correlation between the number of advertising messages viewed and the quantity of
alcohol consumed, particularly among teenagers. Defendants' assertions that the billions of
dollars spent on marketing and advertising alcoholic beverages in the United States affects only
brand preferences but has absolutely no effect on the quantity of alcohol consumed are patently
false. Independent studies, marketing and advertising text books, and experts from numerous
fields clearly reject these assertions. Indeed, some of the studies conducted by the alcoholic
beverage industry itself show that advertising and marketing expenditures increase the total
quantity of alcoholic beverages consumed, not just the quantity of the particular brand being
advertised and marketed.

79.                 It is undeniable that young people are attracted to and pay attention to defendants'
alcoholic beverage advertising. It is also undeniable that defendants' carpet bombing of
alcoholic beverage advertisements on audiences filled with underage consumers increases the
attractiveness of alcohol use among reasonable young people and therefore increases the
likelihood that they will become alcohol users prior to adulthood. Moreover, it is clear that the

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extensive and persistent exposure of young people to defendants' messages encouraging alcohol consumption contradict and interfere with the implementation of the District of Columbia's public policy of discouraging underage drinking.

80.                                   The human suffering underage drinking causes is enormous and undeniable.
Alcohol consumption by teenagers causes physical damage to the brain; interferes with mental,
emotional, and social development; degrades academic performance; and increases the incidence
of risky sexual behavior, teenage pregnancy, juvenile delinquency and violent crime.
Approximately 25% of all teenagers admitted to hospital emergency rooms in the United States
have alcohol in their bloodstream.   Defendants' marketing practices increase the number of
underage drinkers in the United States and increase the quantity of alcohol consumed by those
underage drinkers. Defendants' marketing practices increase the amount of human suffering
caused by underage drinking.

81.                                   The initiation of alcohol use occurs at a younger age than ever before. The
percentage of children who began drinking in eighth grade or earlier has increased 33% in the
last 25 years. Individuals who start drinking alcohol before fifteen years of age are over 400%
more likely to become alcohol dependent than those who begin drinking after age 21.

82.                                   The economic costs associated with underage drinking are also devastating.
Defendants' marketing practices increase the economic costs associated with underage drinking
in the United States.

83.                                   The clear, direct, and foreseeable effects of defendants' conduct as alleged herein
include (a) an increase in the illegal sales of defendants' products to underage consumers; (b) the
establishment of brand preferences for alcoholic beverages among consumers who are too young

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to legally consume those alcoholic beverages; (c) an increase in the quantity of alcoholic beverages consumed by underage drinkers; (d) an overall increase in the quantity of alcoholic beverages consumed by the society as a whole; (e) an increase in the revenues and profits of defendants; (f) an increase in injuries and illnesses among teenagers; (g) an increase in injuries among the general population; (h) billions of dollars in economic injuries sustained by class members through the illegal trade in alcoholic beverages; and (i) billions of dollars in economic losses sustained by society as a whole.

Causes of Action First Cause of Action: Unfair and Deceptive Trade Practices

84.                 The allegations contained in all other paragraphs of this Complaint which are not
inconsistent with this cause of action are by this reference re-alleged and incorporated herein as if
fully set forth in this paragraph.

85.                                    Defendants' behavior as alleged in this Complaint is unfair, deceptive,
unreasonable, immoral, unconscionable, unscrupulous, unethical, and offensive to established
public policy. Without limiting the generality of the foregoing, defendants' conduct as alleged
herein is unfair, deceptive, unreasonable, immoral, unconscionable, unscrupulous, unethical, and
offensive to established public policy because the defendants intentionally, recklessly,
negligently, or wilfully (a) induced or encouraged the illegal use of a product through marketing
and advertising; (b) induced or encouraged the illegal use of an unusually dangerous product
through advertising and marketing; (c) targeted underage drinkers with marketing and advertising
for alcoholic beverages; (d) employed advertising themes, methods, characters, and media that
substantially appeal to consumers who cannot legally use the product advertised; (e) promoted or

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encouraged the dangerous, destructive, illegal, irresponsible, and harmful use of a product; (f) placed advertisements in media primarily or disproportionately viewed by consumers who cannot legally use the product advertised; (g) encouraged or induced children to use alcoholic beverages; (h) represented that their goods have characteristics, uses, or benefits that they do not have; (i) taken advantage of consumers' inability to reasonably protect their interests by reason of age, ignorance, or similar factors; (j) advertised or offered goods without the intent to sell them as advertised or offered; and (k) advertised their products in youth oriented media knowing that the placement of such advertisements would increase the illegal sales of their products to underage consumers.

86.                 Defendants' conduct as alleged herein constitutes unfair, deceptive, and
unconscionable trade practices.

87.                 Defendants know that the direct consequence of an advertising campaign in
magazines with a disproportionately high concentration of underage readers is a significant
increase in the illegal sales of their products to underage consumers. Defendants also know that
the direct consequence of television and radio advertising campaigns on stations and at times
that have a disproportionately high concentration of underage viewers is a significant increase in
the illegal sales of their products to underage consumers.

88.                 As a proximate result of defendant's conduct as alleged herein, the plaintiff
classes have been injured in their business or property. The injuries suffered by the plaintiff
classes as a result of defendants' conduct was not reasonably avoidable by consumers.

89.                 The acts and practices alleged herein were committed by each of the defendants in
the course of engaging in business and commerce in the District of Columbia.

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90.                 The acts and practices alleged herein have the capacity and tendency to, and are
likely to, deceive the members of the plaintiff classes and the public at large.

91.                 The acts and practices alleged herein are directed to children and other underage
consumers, who are unusually unsophisticated, vulnerable, impressionable, and susceptible to
well orchestrated marketing campaigns.

92.                 The acts and practices alleged herein cause substantial injury to consumers which
is outweighed by any countervailing benefits to consumers or competition that the acts or
practices may provide.

93.                 The prosecution of this lawsuit is strongly in the public interest. Without limiting
the generality of the foregoing, the prosecution of this lawsuit is strongly in the public interest
because: (a) defendants' acts and practices as alleged herein violate specific legislative,
regulatory, and judicial declarations of public interest, including declarations of public interest
regarding the sale and consumption of alcoholic beverages by minors and (b) defendants' acts
and practices as alleged herein constitute part of a pattern or general course of conduct that has a
substantial likelihood of repetition.

94.                 Defendants' acts, practices, and omissions as alleged in this Complaint violate the
District of Columbia Consumer Protection Procedures Act, D.C. Code Ann. § 28-3901 et seq.
Second Cause of Action: Unjust Enrichment

95.                 The allegations contained in all other paragraphs of this Complaint which are not
inconsistent with this cause of action are by this reference re-alleged and incorporated herein as if
fully set forth in this paragraph.

96.                 Defendants have engaged in wrongful conduct resulting in substantial financial

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losses incurred by the plaintiff classes.

97.                 The defendants have been unjustly enriched at the expense of the plaintiff classes.

98.                 It would shock the conscience and be manifestly unjust for defendants to retain
the revenues and profits derived from the illegal consumption of alcoholic beverages by minors.

99.                 There is no adequate remedy at law to compensate the Classes for defendants'
wrongful conduct.

Third Cause of Action: Negligence

100.                               The allegations contained in all other paragraphs of this Complaint which are not
inconsistent with this cause of action are by this reference re-alleged and incorporated herein as if
fully set forth in this paragraph.

101.                               As manufacturers and distributors of unusually dangerous products which are a
well established cause of numerous injuries, illnesses, and deaths, defendants have heightened
duties to the Classes to ensure that their products are not used illegally. These duties include: (a)
the duty to use defendants' reasonable best efforts to avoid extensively exposing children and
other underage consumers to alcohol advertisements; (b) the duty to ensure that defendants'
marketing efforts do not unreasonably induce or encourage underage consumers to purchase their
products; and (c) the duty to use their reasonable best efforts to ensure that minors do not begin
to drink alcoholic beverages as a result of defendants' marketing efforts.

102.                               Defendants have breached each of their duties to the Classes by, among other
things: (a) unreasonably saturating underage consumers with extensive advertisements for
alcoholic beverages; (b) refusing to take reasonable steps to avoid inducing underage consumers
to buy their products; and (c) refusing to take reasonable steps to ensure that their marketing

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efforts do not encourage children and other underage consumers to begin drinking alcoholic beverages at an illegal age.

103.                             It is reasonably foreseeable that many underage consumers would be induced to
illegally consume defendants' alcoholic beverages as a result of defendants' marketing efforts
and that the Classes would be injured thereby.

104.                             As a proximate result of defendants' breaches of their duties to the Classes, the
classes suffered damages in an amount to be established at trial.

Fourth Cattse of Action: Recision

105.                             The allegations contained in all other paragraphs of this Complaint which are not
inconsistent with this cause of action are by this reference re-alleged and incorporated herein as if
fully set forth in this paragraph.

106.                             The transactions whereby underage consumers obtain defendants' products ought
to be rescinded on the grounds that: (a) the objects of the transactions are illegal in the hands of
the purchaser; (b) the defendants wrongfully induced underage consumers to obtain and consume
their products; (c) one or more parties to the transactions were minors under the age of 18; and
(d) the transactions are contrary to the strong public policy against underage drinking.

107.                             The revenues derived from defendants' illegal trade in alcoholic beverage
products should be returned to the Class.

Fraudulent Concealment

108.                             The allegations contained in all other paragraphs of this Complaint are by this
reference re-alleged and incorporated herein as if fully set forth in this paragraph.

109.                             Until recently, plaintiff did not discover, and could not discover through the

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exercise of reasonable diligence, the existence of the claims asserted in this Complaint because defendants actively, intentionally, and fraudulently concealed their scheme to market alcoholic beverages to underage consumers.

110.                              Without limiting the generality of the foregoing, defendants' efforts at concealing
their marketing of alcoholic beverages to underage drinkers include: (a) the use of code-words to
describe underage market segments; (b) highly publicized and strident false public statements
regarding their marketing efforts and their effects on children and other underage consumers; (c)
failing to provide government agencies with information requested regarding past and present
marketing and research efforts, including marketing and research efforts conducted in foreign
countries; (d) using highly publicized industry marketing guidelines to deceptively shield,
disguise, and protect marketing efforts which are in fact in violation of such guidelines; and (e)
falsely representing that their marketing efforts are in compliance with industry marketing codes
and guidelines.

111.                              The Beer Institute Advertising & Marketing Code is a sham "self-regulatory"
construct heavily touted by the Beer Institute's members, including defendants, as a strong and
effective bar to underage marketing that each member is "committed to compliance with." In
truth, defendants routinely, egregiously, and with impunity violate the express terms of their own,
rather lax, advertising code because, unlike legitimate self regulatory regimes in other industries,
there is absolutely no enforcement mechanism for violations of the Code. Instead, complaints are
simply referred to the offending company "for its review and action"; there is no appeal or review
or even so much as a letter of reprimand. There is no independent assessment of the complaint,
there are no follow-up procedures, and there is not even a requirement that the company respond

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t

to the complaining party or notify the Beer Institute of its decision. When defendants do respond

to complaints from the public, it is usually in a form letter simply stating that the company complies with applicable standards and that there is no evidence that advertising affects children's drinking decisions. Moreover, complaints are not made public and defendants have agreed among themselves not to file complaints against each other or to publicize other defendants' violations of the Code. In short, the Beer Institute guidelines as observed by defendants are nothing more than a fig leaf to divert and diffuse criticism of defendants' marketing practices and conceal the true nature of those marketing practices. As the General Counsel of the Beer Institute has admitted publicly, enforcing the code "is not our job". The self regulation regimes in the wine and spirits industries also lack the characteristics of genuine self regulation and serve only to protect their members instead of complainants, potential victims, or the public.

Prayer for Relief

For the reasons stated herein, plaintiff respectfully prays for judgment against all defendants and request that this Court:

1.         Certify this case to proceed as a class action pursuant to D.C. SCR-Civ. R. 23(b)(2), 23(b)(l)(a), and 23(b)(2) on behalf of the following classes:

(A) a Guardian Class consisting of all persons who were or are parents or guardians of children whose funds were used to purchase alcoholic beverages marketed by defendants which were consumed without their prior knowledge by their children under the age of 21 during the period 1982 to the present (the Class Period"), excluding defendants and their

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affiliates, officers, directors, and employees;

(B) an Injunctive Class consisting of the parents and guardians of

all children currently under the age of 21.

2.                                         Adjudge and decree that each of the defendants unlawfully engaged in a deceptive
scheme to market alcoholic beverages to minors in violation of the District of
Columbia Consumer Protection Procedures Act;

3.                                         Declare that the conduct alleged herein resulted in the unjust enrichment of the
defendants and that defendants must each disgorge to plaintiff and the Classes all
amounts by which they have been unjustly enriched, plus costs and interest;

4.                                         Rescind the transactions whereby defendants obtained revenues from the illegal
sale of alcoholic beverages to underage consumers and order defendants to pay
such monies to the Classes;

5.                                         Enjoin defendants from engaging in any marketing of alcoholic beverages to
underage persons;

6.                                         Assess all defendants jointly and severally for all actual damages sustained by the
Plaintiff Classes plus treble damages or $1500 per violation, whichever is greater,
punitive damages, and attorneys fees, costs of suit, and interest; and

7.                                         Grant such other and further relief as the Court deems proper and appropriate
under the circumstances.

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Dated: November 14, 2003


 

Respectfully Submitted,


 

 


 

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David Boies (III)

Timothy D. Battin

Ian Otto

STRAUS & BOIES, LLP

10513 Braddock Road

Fairfax, Virginia 22032

Dboies(g),straus-boies.com

Tbattin@straus-boies.com

lottofgjstraus-boies.com

703.764.8700 telephone

703.764.8704 facsimile

William Isaacson (D.C. Bar No. 414788) Tanya Chutkan    (D.C. Bar No. 420478) BOIES, SCHILLER & FLEXNER, LLP 5301 Wisconsin Avenue, Suite 800 Washington, DC 20015 Wisaacson@bsfllp.com Tchiitkaii@bsfllp.com 202.237.2727 telephone 202.237.6131 facsimile

Michael Straus STRAUS & BOIES, LLP

1130 22nd Street South Birmingham, Alabama 35205 Mstrausstraus-boies.com Mschirmer@straus-boies.com 202.324.3800 telephone 205.324.3996 facsimile

 


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