Diageo Seeks to Dismiss Tequila Lawsuit That Claims Casamigos, Don Julio Aren’t 100% Agave

This Dec. 25, 2018, photo shows bottles of Don Julio tequila at the Back Bowl bowling alley in Eagle, Colo. (AP Photo/Jenny Kane)

Diageo, the international beverage company, is seeking to dismiss a class action lawsuit accusing it of falsely labeling products under its as “100% agave.” In a court filing submitted Monday, the company argued the plaintiffs’ complaint lacks factual support and relies on vague claims and unverified testing.

The case — Pusateri, et al. v. Diageo North America, Inc. — was filed earlier this year in the U.S. District Court for the Eastern District of New York. Two other class-action lawsuits alleging similar claims, filed in California and Florida, make similar allegations about Diageo’s tequila brands.

Diageo: Claims “Wholly Without Merit”

In a four-page pre-motion letter to U.S. District Judge LaShann DeArcy Hall, Diageo argued that the complaint fails to provide any factual allegations that its tequilas are not made from 100% Blue Weber agave, as stated on product labels. The company says Casamigos and Don Julio tequilas undergo “a rigorous production and independent, multi-step certification process” in compliance with Mexican and U.S. regulatory standards.

“Plaintiffs offer a scattershot narrative based entirely on unsupported and unverified speculation quoted in blogs and media reports,” the filing states, arguing that the complaint doesn’t cite any specified testing of Diageo’s products, let alone evidence of non-compliance with labeling rules set by Mexico’s Tequila Regulatory Council (CRT).

Background: 3 Lawsuits Challenge “100% Agave” Claims

The Pusateri case is part of a broader legal challenge against Diageo, with two other class actions filed in San Francisco and Miami-Dade County. All three lawsuits claim Don Julio and Casamigos products contain alcohol derived from sources other than agave, such as sugarcane, which would render them “mixto” tequilas — not 100% agave.

The California suit, filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act, cites lab results alleging that several Diageo tequilas contained less than 51% agave-derived ethanol. It is the only case to include lab data, though Diageo has yet to formally respond to that complaint in court.

In contrast, the New York filing at issue in Diageo’s motion offers no lab results, product sourcing details or manufacturing information.

Diageo: No Products Tested, No Misrepresentation Made

According to Diageo’s filing, the plaintiffs do not allege that any specific Don Julio or Casamigos product was tested. The company asserts that the claims are based on a general “investigation” not linked to Diageo or its manufacturing processes, and says the plaintiffs misrepresented quotes from sources to support their allegations.

Diageo says plaintiffs cited a blog post discussing Nuclear Magnetic Resonance testing, omitting the qualifier that such testing could “potentially” identify cane-derived alcohol. The company also notes that the plaintiffs failed to identify who conducted the testing, what tequila was analyzed or how it was sourced.

Diageo calls the assertion that Diageo’s tequilas are not 100% agave “a conclusion that is asserted without a single factual allegation about  Diageo’s ingredients, sourcing, or production.”

Diageo further contends that the plaintiffs lack standing to sue because they do not demonstrate they were misled or harmed. The complaint claims the plaintiffs paid a “premium price” for what they believed to be 100% agave tequila, but Diageo says that alone is insufficient to establish economic harm under New York or New Jersey consumer protection laws.

The company also argues that its labeling complies with CRT certification requirements — standards that are recognized by U.S. regulators — which may offer a “safe harbor” from liability under both state laws cited in the complaint.

Additionally, Diageo says the unjust enrichment claim is redundant and that the plaintiffs’ request for injunctive relief should be dismissed, as they have no plans to repurchase the products and therefore are not at risk of future deception.

What’s Next?

Diageo has requested a pre-motion conference, a procedural step before formally filing a motion to dismiss under Federal Rule 12(b)(6). The court will determine whether to grant that request and allow Diageo to proceed with its motion.

Meanwhile, the lawsuits in Florida and California remain active, with the California case likely to draw closer scrutiny due to the inclusion of testing data and the elevated stakes of RICO allegations.