Diageo defeats false labeling lawsuit over '100% agave' tequilas

By Mike Scarcella

WASHINGTON, Oct 1 (Reuters) - Diageo DGE.L has persuaded a federal judge to dismiss a proposed class action alleging the spirits maker duped consumers by falsely labeling its Casamigos and Don Julio tequilas as "100% agave."

US District Judge LaShann DeArcy Hall in Brooklyn said on Wednesday that the plaintiffs, a group of individual tequila buyers and restaurants, failed to show how they had been harmed. In their lawsuit, the plaintiffs claimed they paid higher prices for deceptively marketed tequila.

The judge faulted the scope of evidence the plaintiffs included in their lawsuit. Hall said “the court struggles to find how it could find that a study that looks at five samples would allow a court to reasonably infer that a defendant was engaging in ubiquitous, systemic mislabeling."

A Diageo spokesperson said the company is “gratified that the court rejected plaintiffs’ adulteration allegations in their entirety.”

Steve Berman, a lawyer for the plaintiffs, in a statement said the ruling "gets the record wrong" and that they may ask the court to reconsider its decision.

"Consumers pay a premium for tequila labeled '100% agave,' and they deserve to get what they pay for," the plaintiffs' statement said. "Independent laboratory testing of Diageo tequilas found none came close to being made entirely from 100% agave."

The lawsuit, filed last year, claimed buyers would have purchased another brand of tequila, or paid less for Diageo products, had they known Diageo’s labels were false.

An attorney for the plaintiffs said in a prior statement that the lawsuit was filed to “demand truthful marketing of one of Mexico’s cherished products.”

The judge had paused several related lawsuits against Diageo in federal court in Brooklyn while awaiting Wednesday's decision in the first-filed case.

The case is Avi Pusateri et al v. Diageo North America, US District Court, Eastern District of New York, No. 1:25-cv-02482-LDH-CHK.

For plaintiffs: Steve Berman and Nathaniel Tarnor of Hagens Berman; David Fernandes of Baron Budd

For defendant: Timothy Martin, Ellen Holloman and Christopher Le Coney of Kaplan Martin