Lawsuits Take Aim at Ads for Alcohol

Casey Goodwin knew all too well the dangers of drinking and driving.

For years, her mother, Lynne, had run programs to fight teen alcohol use in the Tulare County schools. At her high school in the Central Valley town of Exeter, Casey had been involved in student campaigns against underage drinking.

On March 13, 2003, as 20-year-old Casey was headed home from college in San Luis Obispo to celebrate her mom’s birthday, a plastered 18-year-old doing 90 miles an hour plowed into her Honda Civic. She died a short time later.

The driver was sentenced to 10 years in prison for vehicular manslaughter.

Then Lynne Goodwin and her husband, Reed, turned their anger on the alcohol industry. They signed on as lead plaintiffs in a class-action suit accusing Anheuser-Busch Cos. and Miller Brewing Co. of aggressively marketing to kids.

Lynne said she didn’t care whose booze Casey’s killer had been drinking. She didn’t hold the beer makers directly responsible but said they were logical proxies for an industry that she believed goaded kids to drink.

Filed last February in Los Angeles County Superior Court, the Goodwin case is one of five pending class actions that assail the marketing practices of the beverage industry. The others have been filed over the last 14 months in Ohio, Colorado, North Carolina and Washington.

The cases have drawn comparisons to the legal assault on cigarette makers, which have also been accused of marketing to kids.

Beverage makers deny targeting teens and say the claims are groundless.

The suits accuse them of unleashing a flood of provocative, even raunchy, ads to exploit the raging hormones of adolescents. They say teens are disproportionately exposed to such ads through magazines and TV shows with large youth audiences.

For example, a Bacardi ad cited in some of the suits depicts a young woman in a halter top pouring a shot onto her belly while a man licks the rum out of her navel. “Vegetarian by day. Bacardi by night,” the tagline says.

The suits also take aim at the industry’s heavy promotion of flavored malt beverages, called “malternatives” by the industry and “alcopops” by critics. Plaintiffs say these sweet-tasting beverages with brand names such as Smirnoff Ice, Skyy Blue and Mike’s Hard Lemonade, are “gateway” drinks designed to lure teens who are put off by the taste of alcohol.

The suits seek court-ordered limits on beverage promotion, such as restricting ads on TV shows and publications with large youth audiences. They also seek damages for parents or kids who paid for alcohol illegally consumed by minors.

Although Anheuser-Busch and Miller are sole targets of the Goodwin suit, most of the industry’s biggest names are defendants in one or more of the other cases. Among them are Coors Brewing Co., Heineken USA Inc., Labatt Brewing Co., Samuel Adams Brewing Co., Bacardi USA Inc. and Diageo, marketer of Smirnoff Vodka, Jose Cuervo Tequila, Captain Morgan Rum and Guinness beer.

The companies insist that they do not encourage illegal drinking and that they are trying to reach adult consumers. They say they adhere to a voluntary code that restricts their ads to media in which at least 70% of the audience is 21 or older.

Beverage companies also say they have spent tens of millions of dollars in recent years to promote responsible drinking, train retailers to spot fake IDs and educate parents on ways to combat drinking.

The suits, they contend, are an attempt to muzzle legitimate commercial speech. And they say paying damages to people who illegally purchased or consumed alcohol is the wrong way to fight underage drinking.

“These cases seek to reward underage drinkers, or their parents, for breaking the law,” said Edward M. Crane, a lawyer for Anheuser-Busch. “That would send an undesirable message to teens -- namely that underage drinking is OK and might even be profitable.”

Whatever the role of advertising, underage drinking contributes significantly to beverage makers’ bottom lines. A U.S. government report in 2002 estimated that 12-to-20-year-olds accounted for 11.4% of alcohol consumed. A study in the Journal of the American Medical Assn. put the number higher, estimating that underage drinking in 1999 was responsible for 19.7%, or $22.5 billion, of total U.S. alcohol sales of $116.2 billion.

The suits come at a time of growing worry over problems linked to underage drinking -- including teen pregnancy, sexual assault and other crimes, traffic deaths and low academic performance. Some research suggests that the earlier kids start drinking, the more likely they are to be alcoholics as adults.

Although the industry has acknowledged the problem, its outreach programs are “public relations baloney to keep legislators and litigators off their backs,” said George Hacker, director of the alcohol policies project at the Center for Science in the Public Interest, a Washington-based consumer advocacy group.

He hailed the lawsuits as “the beginnings of a new weapon ... to confront the marketing of the alcoholic beverage industry.”

This approach has parallels to the legal campaign waged against the cigarette makers. Indeed, the alcohol suits have enlisted some veterans of the tobacco wars. The lawyer who filed the Goodwin class-action suit, Steve W. Berman of Seattle, represented several attorneys general in their anti-tobacco cases.

The suits also have drawn heavily on research by the Center for Alcohol Marketing and Youth at Georgetown University, headed by Jim O’Hara. In the Clinton administration, O’Hara was associate commissioner and chief spokesman for David A. Kessler, the Food and Drug Administration commissioner who sought to regulate the tobacco industry.

The alcohol side has heavyweight corporate defender Dan Webb of Winston & Strawn, currently lead trial counsel for Philip Morris in the Justice Department’s fraud and racketeering case against the tobacco industry. Top tobacco law firms Shook, Hardy & Bacon and Jones Day also are defending beverage industry clients.

And in an effort to head off state lawsuits, the companies have enlisted the aid of former state attorneys general, including some who once tormented the cigarette makers. Although no state suits against the liquor industry appear imminent, at least four former attorneys general are now consulting with beer and spirits companies. They are critiquing the companies’ programs to curb underage drinking and touting their efforts to current attorneys general, who have created a task force to examine the problem of youth access to alcohol.

Heading the list is former Mississippi Atty. Gen. Mike Moore, who has been retained by Anheuser-Busch. Moore became an instant hero of the anti-smoking movement when he filed the first state suit against cigarette makers in 1994. He then wheedled and harassed fellow attorneys general until dozens more jumped in, turning an improbable crusade into a juggernaut. In a settlement reached in 1998, tobacco companies pledged to pay the states $246 billion and to refrain from directly or indirectly targeting kids -- the same issue now facing the alcohol industry.

Moore said that he was comfortable in his new role and that Anheuser-Busch was adamantly opposed to underage drinking.

Another top soldier of the tobacco wars, former Arizona Atty. Gen. Grant Woods, is advising Diageo, the global beverage giant. Former New York Atty. Gen. Robert Abrams has been retained by Anheuser-Busch and former Nevada Atty. Gen. Frankie Sue Del Papa was hired by Brown-Forman Corp. of Louisville, Ky., marketer of Jack Daniel’s Tennessee Whiskey and Korbel sparkling wine.

“Clearly, it’s ironic,” said Georgetown University’s O’Hara. “I just hope they remember the lessons that they learned in tobacco about what it really takes to protect” kids.

As with tobacco, success for plaintiffs isn’t likely to come quickly, if ever, analysts say.

Cigarette makers flicked away decades of lawsuits and weren’t seriously threatened until the 1990s, when the states entered the fray.

And recent decisions by the U.S. Supreme Court affirming protections for commercial speech may be a boon to the alcohol industry.

Moreover, California Atty. Gen. Bill Lockyer said, “compelling evidence that the tobacco companies hid evidence of consumer harm” was key to turning the tide. Similar evidence may not exist in the alcohol cases.

“My best guess is it’s not going to evolve into a tobacco-like, multibillion-dollar outcome,” Lockyer said.

Even some fans of the lawsuits are guarded about the plaintiffs’ chances.

“The courts may well say that the advertising is constitutionally protected unless you can show that there was intent to get kids to drink,” said James F. Mosher of the Pacific Institute for Research and Evaluation, a think tank in Felton, Calif., concerned with science and health issues. “Without having evidence of fraud, moving forward on the alcohol side is going to be very hard.”

If proof exists of targeting kids, it will typically emerge in pretrial discovery, when lawsuit opponents are required to share relevant reports, memos and other documents.

“It wouldn’t be at all surprising if some of these big firms have some incredibly damaging documents in their files,” showing that they were aware that their ads could be appealing to kids, said Stephen McG. Bundy, a professor at Boalt Hall school of law at UC Berkeley.

But there’s no guarantee the cases will survive dismissal motions and reach the discovery phase.

One part of the Goodwin case has already been thrown out. The suit had alleged that the beer companies violated California’s Unfair Competition Law, which until recently allowed people such as the Goodwins to act as private attorneys general on behalf of the general public in seeking to halt deceptive practices. But Californians on Nov. 2 passed Proposition 64, which restricts such filings to law enforcement agencies and citizens who can show actual losses of money or property as a result of the alleged wrongdoing.

The multimillion-dollar pro-Proposition 64 campaign included $325,000 from the Goodwin defendants and their affiliates. Anheuser-Busch and Miller put up $100,000 and $25,000, respectively, according to campaign reports filed with the state. An additional $200,000 came from Philip Morris, a unit of Altria Group Inc., which holds a big stake in the parent of Miller.

In December, Los Angeles County Superior Court Judge Peter D. Lichtman dismissed the unfair-competition claim, ruling that the beer makers’ alleged misconduct had not caused financial loss to the Goodwins or two other named plaintiffs.

Lichtman is scheduled today to hear arguments on whether to dismiss the remaining claims.

Win or lose, Lynne Goodwin said she expected the case to encourage greater scrutiny of marketing practices.

“Hopefully, the alcohol industry is paying attention,” she said. “This movement is larger than they realize.”