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Templeton Rye Hit With Consumer Fraud Lawsuit

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By Brett Snider, Esq. on October 01, 2014 9:20 AM

Whiskey maker Templeton Rye is officially going to have to ward off a consumer fraud lawsuit after the complaint was approved by Iowa's attorney general.

The lawsuit alleges that Templeton misled consumers by claiming that its rye whiskey is created using a Prohibition-era recipe handed down through the founder's family on a scrap of paper. The recipe was attributed to famous Iowan Alphonse Kerkhoff in Templeton's marketing materials, but angry consumers claim that the whiskey is actually just a "stock" whiskey brewed in Indiana. And according to USA Today, Iowa's attorney general is allowing the lawsuit to proceed.

Did Templeton illegally mislead consumers?

Source of the Product

Templeton has been releasing its whiskey since 2006, and since then the company has woven a tale in its marketing about its bootlegging origins. Here's the problem: The Des Moines Register reports that federal regulations prevent Templeton from actually using Kerkhoff's Prohibition-era recipe.

Why is this a big deal? Because it tends to be very important to consumers how a brand and/or product came to be.

In fact, plaintiff Christopher McNair says he purchased more than a dozen bottles of Templeton's booze, paying "extra" for a whiskey which he believed had its craft distillation process and roots in small-town Iowa. Maybe McNair believed in Templeton's Iowa origin myth because of promotional and marketing materials released by the company. The Register reports that the company allegedly released shirts reading "Templeton Rye: Made in Iowa" and flyers declaring its product as a "small-batch rye whiskey made in the tiny town of Templeton."

Unfortunately for Templeton, states like Iowa have consumer protection laws that hold companies accountable for less-than-honest advertising practices. These laws also require the attorney general to "sign off" on class-action suits against companies for fraud, which happened for disgruntled Templeton customers this week.

Class Action Woes

Although Templeton plans to release new labels clarifying that the whiskey is distilled in Indiana and only bottled in Iowa, the suit marches on. While they may be legion, the plaintiffs suing Templeton have not yet been certified as a class, which will require a judge's ruling. Templeton will likely try to fight class certification, which may increase the damages owed by the company if it's found liable.

Meantime, the Register reports that Iowa-made Templeton Rye may be available by 2020 or 2021. Here's hoping.

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