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Eleventh Circuit Court Of Appeals Dismissed FDUTPA Claim, Clarifies Federal Preemption


On November 8th, 2021, the United States Court of Appeals for the Eleventh Circuit dismissed a Florida Deceptive and Unfair Trade Practice Act (FDUTPA) claim filed against Bermuda based rum  and gin maker Bacardi. In doing so, the federal appeals courts clarified the preemption standard for deceptive and unfair trade practices cases. Here, our West Palm Beach deceptive & unfair trade practices lawyers provide an analysis of the decision.

Appeals Court Case Review: Marrache v. Bacardi U.S.A., Inc. 

Originally arising out of South Florida, the case of Marrache v. Bacardi U.S.A., Inc., centered around allegations that Bacardi made material misrepresentations to consumers regarding the “quality” of its rum. Bacardi uses an African spice called “grains of paradise” to make its popular product.

Florida has an old, long-enforced law on the books that prohibits spirit makers from improperly adulterating their products with certain types of additives, including grains of paradise. The plaintiff in this case argued that Bacardi violated the FDUTPA by using an ingredient banned by Florida law.

FDUTPA Claim Dismissed: Federal Preemption  

As noted above, the specific statute being pointed to by the plaintiffs dates back to the middle of the nineteenth century. It has long been unenforced in Florida—though it technically remains on the “books.” A more recent federal law—the Federal Food, Drug and Cosmetic Act (FDCA) which was passed in the 1930s—listed the additive (grains of paradise) as a safe ingredient. The class action FDUTPA claim was originally dismissed on the grounds that the claim is preempted by federal law.

Under the American legal system, federal preemption is the concept that a federal law will automatically invalidate a conflicting state law. Upon review, the Eleventh Circuit Court of Appeals has upheld the initial decision—finding that federal preemption does apply in this case. Notably, the appeals court dismissed the plaintiff’s FDUTPA claim with prejudice.

FDUTPA Dismissal: Prejudice vs. No Prejudice 

When a court dismisses a lawsuit, it can do so with prejudice or without prejudice. It is an important distinction. A claim that is dismissed with prejudice cannot be amended. In other words, the plaintiffs cannot file the same claim in the same court. They lose their right to do so. On the other hand, a claim dismissed without prejudice can be amended and re-filed to address a potential defect.

A dismissal with prejudice is considered to be an adjudication on the merits. It means that the court believes that it has all of the information needed to come to a final decision. A claim could be dismissed without prejudice on procedural grounds without any ruling on the actual merits of the case. When this occurs, the case can potentially be revived.

Do You Have Questions About the FDUTPA?

We can help. At Pike & Lustig, LLP, our Palm Beach County deceptive and unfair trade practices lawyers are focused on protecting the rights and interests of our clients. Give us a call now to arrange a strictly confidential initial consultation. We handle FDUTPA claims in West Palm Beach and throughout the surrounding areas in Southeastern Florida.

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