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 10^th Street Golden, CO 80401

COORS BREWING COMPANY

31110^th 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 40^th 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 10^th Street,
Golden, Colorado and is registered to do business in the District of Columbia. Defendant
Adolph Coors Company is a corporation headquartered at 311 10^th 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 40^th 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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