Dan Churney Oct. 1, 2015, 8:43am

A suburban restaurant owner's class-action suit against a Texas distillery has dried up, after a Chicago federal judge found there were no grounds to allege the distillery falsely advertised its vodka as handcrafted.

Mario Aliano, owner of Batavia-based restaurant business, Due Fratelli Inc., had filed a class action suit in October 2014 in Cook County Circuit Court against Fifth Generation Inc., which makes Tito’s Handmade Vodka. Fifth Generation is based in Austin, Texas. The case was moved, at Fifth Generation’s request, two months later to federal court in Chicago.

Aliano claimed Fifth Generation’s marketing and advertising for its vodka was misleading. Specifically, Aliano alleged the company inaccurately described its product as “handmade” and “crafted in an old fashioned pot still.” Further, Aliano claimed Fifth Generation misleadingly referred to itself as a “microdistillery” that makes a “high-quality, low-volume alternative to mass produced liquors.” Aliano said, in reality, the vodka was mass-produced.

According to Aliano, this false advertising “deceived” him into paying more for Tito’s than he otherwise would have been willing to spend.

Aliano’s four-count suit claimed violations of the Texas Deceptive Trade Practices Act, the Illinois Consumer Fraud Act and the Illinois Uniform Deceptive Trade Practices Act, as well as a count of unjust enrichment.

Fifth Generation countered with a motion to dismiss all counts, which U.S. District Judge Samuel Der-Yeghiayan addressed.

The parties had no conflict over the count based on the Texas Deceptive Trade Practices Act, as Fifth Generation said the Act is directed at Texas consumers and did not apply to the Illinois plaintiffs. The plaintiffs conceded the point and the judge tossed the count.

Judge Der-Yeghiayan also found the claim under the Illinois Deceptive Trade Act miscarried, because Aliano needed to demonstrate he would suffer future harm as a result of Fifth Generation's alleged false marketing. Instead, Aliano only speculated he would lose the business of customers who liked that particular vodka, if he stopped serving Tito’s. On the other hand, if he kept serving the drink, he would lose the business of customers who object to his sale of Tito’s at a premium price when it is not a premium product. Speculation was not enough in the judge’s eyes.

Aliano’s Illinois Consumer Fraud Act claim also died under Judge Der-Yeghiayan’s examination. The judge said Aliano’s allegations were “too general” to satisfy the Act’s requirements, coming up short of answering “who, what, when, where, or how.”

Claims under the Deceptive Trade Act and the Consumer Fraud Act both further failed, because the U.S. Alcohol and Tobacco Tax and Trade Bureau approved Tito’s label as “truthful and appropriate,” the judge noted. As a consequence, Tito’s is immunized from liability, because its conduct is authorized by a federal regulatory body.

Mopping up, the judge dropped the final unjust enrichment count, because the three other counts had crumbled, leaving the unjust enrichment allegation without support. Der-Yeghiayan cited a 2011 Seventh Circuit Court of Appeals decision that unjust enrichment claims “stand or fall” with related claims in a case.

Der-Yeghiayan delivered his ruling, which dismissed the case, on Sept. 24.

Zimmerman Law Offices represented Aliano and his restaurant, with Greenberg Traurig defending Fifth Generation. Both firms are of Chicago.

Aliano has also pursued similar legal actions against other liquor makers and distributors, including Louisville Distributing Co., Proximo Spirits Inc., Whistlepig LLC and GoAmericaGo Beverages LLC.

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Organizations in this Story

Due Fratelli Inc.
90 North Island Avenue
Batavia, IL 60510

Fifth Generation Inc
12101 Moore Road
Austin, TX 78719

Zimmerman Law Offices, P. C.
100 W Monroe St, Suite 1300
Chicago, IL 60603

Greenberg Traurig, LLP
77 W Upper Wacker Dr
Chicago, IL 60601

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