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Willamette Valley Vineyards is suing Five Cent Farm, Inc., a neighboring farm. According to Statesman Journal, the lawsuit filed against Five Cent indicates that the Vineyard is claiming more than $400,000 in economic loss from damage to the Vineyard’s pinot noir grapes. The complaint states that Willamette Valley Vineyards has a sole source contract for pinot noir grapes grown at Elton Vineyards, the neighbor to Five Cent Farm. Allegedly, an herbicide drift at the Farm caused the Vineyard a “‘significant loss of high-end commercial pinot noir wine grapes.’” Id. (quoting a representative from the vineyard). The vineyard owner mentioned that Willamette Valley Vineyards has not suffered economic loss from pesticide usage in the past, however the use of pesticides by other parties is an ongoing issue for winery and vineyard owners. Pesticides are capable of drifting, and users of such can have legal obligations to ensure their use does not affect or damage the crops of third parties.

The Department of Agriculture was notified and an inspection was conducted, the completion of which established the occurrence of an herbicide drift, cause on behalf of Five Cent Farm. A full copy of the lawsuit is available at Willamette Valley Vineyards v. Five Center Farm, Inc. The suit, which was filed in the Circuit Court of the State of Oregon for the County of Polk, alleges the following:

  • “Approximately 12.7106 tons of high-end commercial pinot noir grapes were damaged and could not be harvested . . . result[ing] in a total loss of 826 cases of wine, for a total economic loss of $413,780.24.” Id. at 2.
  • The application of herbicides and pesticides constitutes an “abnormally dangerous activity” and results in strict liability damages for damages incurred. Id. at 3. 
  • The Vineyard made four claims of relief: (1) trespass; (2) conversion; (3) negligence; and (4) trespass to chattels.
    • The Farm’s spraying of herbicides that drifted onto the Vineyard is unauthorized entry, which constitutes trespass. Id. 
    • The Farm “wrongfully and intentionally exercised dominion and control” over the Vineyard’s grapes. Id. at 4. 
    • The Farm had a duty to apply the herbicides in a manner that would avoid damage to the Vineyard’s property; the Farm failed to “use reasonably care to avoid risk of foreseeable harm” by allowing the herbicide to drift onto the Vineyard’s property. Id. at 4.
    • The Farm’s action is “unauthorized interference with the interests of personal property . . . which constitutes trespass of chattels.” Id. at 5.

According to Statesman Journal, the owner of the Farm alleges that the Department of Agriculture could not find evidence that the damage to the Vineyard was necessarily the Farm’s fault.

The foregoing suit against Five Center Farm is a cut-and-dry tort suit with cut-and-dry claims, but what makes it interesting is the law’s application to the wine industry. The owner of Willamette Valley Vineyards is correct in saying that an agricultural issue such as an herbicide drift is an ongoing concern for winery and vineyard owners. Not only is there the potential loss of harvest and revenue, but there can be an even greater damages. For example, if the winery claims its wines are organic (or a similar “organic” claim) on its labels, an herbicide drift could certainly present difficult legal issues for the winemaker. Based on the website of the aforementioned vineyard, the terms “organic” do not appear on the labels or website of its wines, however claims such as “certified sustainable” or “made with sustainably grown grapes” or similar are present on labels and the website.

For more information on wine or alcohol law or TTB matters, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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Champagne Alfred Gratien EpernayA few weeks ago, I had the absolute pleasure of spending an afternoon at and touring Alfred Gratien in Épernay. The maison has been producing wine since 1864 and takes pride in stating that its Champagne is hand-crafted. The house uses Chardonnay, Pinot Noir and Pinot Meunier grape varieties, which represent the three types of grape varietals permitted for Champagnes (as locals will tell you, other varietals are used, but the abovementioned varietals are standard for Champagne). The grapes derive from three of Champagne’s regions: Côte des Blancs (Chardonnay), Montagne de Reims (Pinot Noir), and the Marne Valley (Pinot Meunier).

During my visit, I learned that the maison‘s first fermentation occurs in oak casks, which certainly contributes to the unique style of Alfred Gratien Champagnes. Alfred Gratien is actually one of the last houses in Champagne to age the wine in oak casks during first fermentation—many houses no longer use the oak casts for first fermentation and instead use stainless steel tanks. Further, the maison also does not use malolactic fermentation during Champagne production—the house believes this preserves the quality of the final Champagne and indeed it allows the wines to retain a higher level of acidity and, presumably, allows the wine to age better.   Alfred Gratien Champagne Tasting in Epernay

What I really enjoyed about my visit to Alfred Gratien is that, unlike some of the larger houses in Champagne I’ve visited, you can truly feel the emphasis on handcrafting the Champagne as well as the company’s desire to continually operate as a smaller house, in an effort to underscore quality and control. Indeed, it’s a success for Alfred Gratien: their Champagnes are well balanced and are notably different from other houses, but remain enjoyable with a great potential to age. The house actually produces no more than about 22,000 cases of wine per year, so while significant, the production is still enough to be considered small scale or small batch.

If you are visiting Épernay, I highly suggest stopping by Alfred Gratien if you can, or at least enjoying a bottle of their Champagne. 

Special thanks to Olivier Dupré and Andrea Sartor.

Photographs property of Lindsey Zahn.

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Clos Montmartre Paris Vineyard WineAs many times as I’ve visited Paris, I am actually disheartened to admit that—up until recently—I had never seen the hidden vineyard in Montmartre. After reading an article several weeks ago about Clos Montmartre, or the 1500 square meters of vineyard space covertly tucked behind the Sacré-Cœur, I knew it was a “must” for my next trip to the city. Luckily, work brought me to Reims this summer and I immediately put Clos Montmartre on my bucket list. I was able to make the journey to the vineyard early one morning, which truly could not have been more blissful. After a sweet serenade by a local harpist in front of the Basilica, I wandered the windy streets behind it to be greeted with an exciting surprise: Clos Montmartre.Clos Montmartre Paris Vineyard Winery

According to Paris Info:

This vineyard dates from 1932 and has a surface of 1556 square metres. You can find 27 varieties of wine including 75% of Gamay, 20% of Pinot, some stocks of white Sauvignon, Riesling.

Despite its size, it still bottles wine at harvest season during Fête des Vendanges, which feature labels designed by local artists and is mostly auctioned off for local charities.

Les Vinges Paris Vineyard Close MontmartreIn the U.S., I often see references to “urban wineries” or “city wineries,” and I’ve heard stories of everything from wineries in basements of 500-square foot apartments to a commercial vineyard on the roof of a brownstone. These models are admirable, creative, and innovative, but I am yet to find a hectare of space in New York City dedicated exclusively to vines. Perhaps one day.Clos Montmartre Paris Wine Vineyard

If you’re in Paris and looking for a fun wine adventure, I suggest stopping by Clos Montmartre for a view. You can find it on the corner of Rue des Saules and Rue Saint-Vincent. Depending on the route you take, it will put your map reading skills to the test (no cheating with Google maps). 

For more information, see Paris’s Secret Vineyard.

Images property of Lindsey A. Zahn.

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TTB is accepting comments through August 31, 2015 on a proposed American Viticultural Area (“AVA”) called “Champlain Valley of New York,” as per a proposed rule in the Federal Register on June 30, 2015. The proposed AVA is as follows:

  • The petition proposing the new AVA was sent to TTB by Colin Read, owner of North Star Vineyard, on behalf of the Lake Champlain Grape Growers Association. The proposed AVA of Champlain Valley of New York is “a long, narrow valley on the western shore of Lake Champlain and is approximately 82 miles long and approximately 20 miles wide at its widest point” and incorporates about 500 square miles, six bonded wineries, and eleven commercial vineyards and covers a total of 15.47 acres. Docket No. TTB-2015-0010-0001.
  • The petition noted that the AVA’s distinguishing features are its short growing season (“conducive for growing cold-hardy North American hybrid varieties of grapes . . . but not Vitis vinifera“) and included data, indicating a later-last frost date and an earlier first-frost date, to support such claim. Id. However, as highlighted by TTB, the petition did not include a discussion on the viticultural significance of the proposed AVA’s precipitation, topography, soils, etc., thus TTB does not consider such features to be distinguishing features of the proposed AVA. 
  • The name “Champlain Valley of New York” comes from Lake Champlain, which is found on the border of upstate New York as well as Vermont and parts of Quebec. TTB noted that because “Champlain Valley” applies to both Vermont and Canada, the proposed AVA name of “Champlain Valley of New York” is more accurate for this particular region. Indeed, several prior label approvals for wines indicate that some wineries in both New York State and Vermont use “Champlain Valley” or “Lake Champlain Valley” to describe the origin of their grapes. See, e.g., La Garagista Red Table Wine and Vesco Ridge Vineyards White Table Wine. (In the proposed rule, TTB notes that “Champlain Valley” by itself should not have viticultural significance, thus specifying only the full name “Champlain Valley of New York” would be recognized as viticulturally significant.)

To read TTB’s press release, see Proposed Establishment of the “Champlain Valley of New York” Viticultural Area.

For more information on wine or alcohol law, AVAs, or TTB matters, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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CLE International Wine Beer Spirits Law, Louisville Kentucky 2015 ConferenceCLE International will host its annual wine, beer, and spirits law conference in Louisville, Kentucky this September 17th and 18th. This year is the program’s 20th anniversary of the wine, beer, and spirits conference and, from its lineup, it promises to have some interesting topics in beverage law. Topics include the following:

  • TTB Update
  • Evaluating Labeling and Marketing Programs: False Advertising, Class Actions & a Holistic Approach to Marketing Compliance
  • The Evolution of Brown Spirits: Legal and Industry Perspectives; Demystifying the Federal Label Rules for Spirits and Other Important Issues
  • Arsenic in Wine? Oh, My!: A Discussion of the Pending Litigation
  • Legal and Building Code Requirements: Issues Related to the Premises of Various Facilities
  • State Regulators Panel: Perspectives from Around the Country
  • Appellations: The Next Frontier
  • Cider: Complex Legal Issues
  • Producer Wholesaling and Retailing: Perspectives
  • Trademark Issues: In the Alcohol Industry

and several others.

The conference will take place at the Seelbach Hilton Hotel in Louisville and the brochure mentions that up to 14 hours of MCLE credits can be obtained (including one hour of ethics). Further, the conference falls on the same dates as the renowned Kentucky Bourbon Festival.

I attended last year’s conference and it was a great experience. This year’s lineup promises what sound like exceptionally interesting and current industry topics, as well as some great speakers.

For more information or to register, see CLE International website’s 20th Anniversary National Conference Wine Beer & Spirits Law.

Image property of CLE International.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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In recent news, the Assembly and Senate of New York both passed a bill to amend the state’s tax law. The bill proposed a change to the current law which would significantly help small wineries within the state. The summary of the bill provides that it “[e]xempts certain wineries from the requirement to file annual information returns” and is known as S04668 in the Senate and A06724 in the Assembly. Specifically, the bill amends Chapter 108 of the Laws of 2012 and exempts non-farm wineries that produce under 150,000 gallons of wine per year from filing annual information returns for transactions with sales tax vendors.

The justification is as follows (in pertinent part):

The 2009-10 Revenue Budget Bill (Chapter 57 of the Laws of 2009) enacted various tax compliance initiatives. One of the initiatives mandates the filing of annual information returns by certain third parties that do business with sales tax vendors . . . . In order to complete these information returns, valuable time and resources will be needed to compile and submit it on time. In 2012, farm wineries were exempted from this requirement but non-farm wineries are still burdened by this section of law. This bill would give small non-farm wineries the same exemption from filing.

This is certainly another step in a good direction for New York State, and state wineries will strongly benefit from this change. While New York recognizes a class of wineries called “farm wineries,” there are still many “small” wineries within the state that may not fall within the definition of a farm winery under New York law. For example, New York law requires that a farm winery to produce not more than 250,000 gallons per year and (generally speaking) requires farm wineries to manufacture and sell wine produced exclusively from grapes grown or produced in New York (or other fruits or other agricultural products grown or produced in New York). See, e.g.N.Y. ABC LAW § 76-a 5(a), 8(a). Not all “small” wineries would fall within New York’s carve outs for a “farm winery,” especially if said “small” winery does not use grapes exclusively grown and produced in New York. It seems that the law is starting to recognize that the needs of “small” wineries may be quite similar to those that fall within the traditional definition of “farm winery.”

The upcoming change in the law is just one of several significant changes that New York’s wine, beer, and spirits industry has undergone in the last few months. To learn more, read my most recent article in the Hudson Valley Wine Magazine (Summer 2015 edition).

For more information on New York State wine or alcohol law, direct shipping, or establishing a New York beverage business, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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On July 16, 2015 at 10:00 AM ET, I will be presenting a CLE on beer, wine, and distilled spirits law. The CLE, titled “Beer, Wine & Distilled Spirits Law: Federal Regulation 101″ will have a live broadcast and will also be available on demand. A summary is below:

Beer, Wine, Distilled Spirits Law: Federal Regluation 101When a consumer pops open a bottle of wine or sips his favorite scotch, rarely does one consider the level of regulation the beverage has passed through in order to find its way to market and on the dinner table. Alcohol beverages, however, are subject to a web of federal, state, and even local regulations that are often arcane, unclear, and reflective of Prohibition-era attitudes. This seminar will start with a discussion of the history of alcohol beverage regulation, along with an overview of the federal agency that has primary jurisdiction to regulate alcohol beverages. Then we’ll examine the types of licenses required for industry members and classification of products, along with formulation requirements for beer, wine, and spirits. Finally, we will discuss labeling, advertising, and “hot topics” including trademark, class action lawsuits, and direct shipping to consumers.

Key topics to be discussed:

  • Introduction
  • Licensing (Federal Permits)
  • Classification of Products
  • Labeling
  • Advertising
  • Hot Topics in Beer, Wine and Distilled Spirits Law

To sign up or learn more, please see myLawCLE: Beer, Wine & Distilled Spirits Law: Federal Regulation 101.

For more information on wine or alcohol law, AVAs, or TTB matters, please contact Lindsey Zahn.

Image property of myLawCLE.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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TTB is accepting comments through August 17, 2015 on a proposed American Viticultural Area (“AVA”), as per a proposed rule in the Federal Register on June 18, 2015. The proposed AVA is as follows:

  1. Loess Hills District Viticultural Area (Notice No. 153, Docket No. TTB-2015-0009): The proposed AVA of “Loess Hills District” comprises of a  12,897-square mile (8,254,151-acre) viticultural area in western Iowa and northwestern Missouri, but is not located within and does not contain any other AVAs. The agency received a petition from  Shirley Frederiksen, on behalf of the Golden Hills Resource Conservation and Development Inc. and the Western Iowa Grape Growers, that proposed the establishment of the new AVA. According to TTB’s notice in the Federal Register, the proposed AVA contains 66 commercial vineyards that encompass 112 acres and 13 bonded wineries. Distinguishing features include soil, topography, and climate. Interestingly, there are several wineries currently using the word “Loess” on their labels—one of which is the Loess Hills Vineyard and Winery, which appears  to be located within the proposed AVA—but several labels refer to  wineries located outside. One label even suggests that loess means “unconsolidated, wind deposited sediment composed largely of silt-sized quartz particles showing little or no stratification” (consistent with its dictionary definition) and occurs “widely” in central U.S. In theory, it is possible TTB will find “Loess Hills” viticulturally significant but not the term “Loess” by itself.  

AVAs exist to allow vintners to better designate their wines as viticultural areas have distinct profiles and can often relay significant information to a consumer about a wine. In a proposed rule, TTB summarizes evidence received from petitions detailing the name, boundaries, and distinguishing features of each proposed AVA. Evidence often includes the meso-climactic, geological, and historical information of each individual AVA. 

TTB is also accepting comments through August 17, 2015 on the proposed expansion of the currently-established AVA Willamette Valley. The AVA is presently about 5,360-square miles, and the proposal seeks to expand the AVA by 29 square miles. See Proposed Expansion of the Willamette Valley Viticultural Area (Notice No. 152, Docket No. TTB-2015-0008)

For more information on wine or alcohol law, AVAs, or TTB matters, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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Empire Wine Bill Passes in New York State Senate

New York Senate Passes Empire Wine BillIn case yesterday’s news wasn’t good enough for industry members, today we are here to repot something even better: the acclaimed Empire Wine bill passed today in New York’s Senate. That’s quite a successful move for a bill that was only introduced a day ago. The bill now awaits Governor Cuomo’s signature.

The passing of this bill in the Senate comes months after the New York State Liquor Authority originally cited the retailer for shipping wine directly to consumers in states where retailer direct shipping is currently prohibited. See Retailer Empire Wine Sues New York State Liquor Authority: Direct Shippingsee also Bill Introduced to New York State Assembly Supports Empire Wine. Yesterday, the Assembly’s version of the bill passed 90-6. See Empire Wine Bill Passes in New York State Assembly.

I think this is, perhaps, one of the greatest reflections of our industry and the unity of its members in recent years—not to mention, highly demonstrative of the law at work. More so, a rewarding accomplishment for a local retailer who took initiative against the enforcement of a regulation that seemed arbitrary, unjust, and anti-business. New York’s wine, beer, and spirits industry has experienced a true renaissance in the last few years and curtailing its development now would only undermine the local movement’s bona fide destiny to continually grow and prosper. The movement in the last two days supports that New York is, once again, open for business. 

For more information on New York State wine or alcohol law, direct shipping, or establishing a New York beverage business, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

 

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Empire Wine Bill Passes in New York State Assembly

Empire Wine Bill Passes New York AssemblyIn promising news for industry members, the much talked-about “Empire wine bill” pending in both New York’s Assembly and Senate passed in the Assembly on Monday, June 15, 2015. See A05920 Summary. Its sister bill, S04446A, is currently still pending in the state’s Senate and, according to Capitol Confidential, “has advanced to the third reading — one of the final stops for legislation before coming to the floor for a vote. It has yet to be placed on the active list, though.” See Bill rooted in Empire Wine case clears Assembly. Also reported by Capitol Confidential, the bill passed in the Assembly by 90-6.

The passing of this bill comes months after the New York State Liquor Authority originally cited the retailer for shipping wine directly to consumers in states where retailer direct shipping is currently prohibited. See Retailer Empire Wine Sues New York State Liquor Authority: Direct Shippingsee also Bill Introduced to New York State Assembly Supports Empire Wine.

The Assembly’s approval is a strong step for the industry, as well as for Empire Wine. Even though the original citations were limited to one retailer, the Authority’s exercise of its regulatory power produced significant questions from industry members and had the potential to adversely impact New York’s business environment. While the Senate bill remains outstanding, it seems probable it will reach a similar fate in due time.

For more information on New York State wine or alcohol law, direct shipping, or establishing a New York beverage business, please contact Lindsey Zahn.

DISCLAIMER: This blog post is for general information purposes only, is not intended to constitute legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

 

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