March 2011

Direct Shipment of Wine Could Soon be Allowed in Maryland

by Lindsey A. Zahn on March 30, 2011

Note: There were several corrections made to this entry post-publication. The author would like to specifically point out that direct shipment is not yet allowed in Maryland, but it appears that direct shipment will soon be available in Maryland in the upcoming months. We apologize for any confusion the original post caused. Monday night, Maryland Senate passed legislation allowing direct shipment of wine from wine producers to the homes of consumers, just two days after the House of Delegates passed the same. (See Direct Wine Shipment Coming Soon to Maryland and House OKs Direct Shipping for Wine.) Several steps still remain to make this bill a law, including the signing by the Governor Martin O’Malley, but there is a strong likelihood that wineries will be able to directly ship to customers in the upcoming months. Whereas this step is a great victory for wineries and connoisseurs, as thirty-six states and the District of Columbia allow direct shipment, it poses a question of compelling interest: does this new law go far enough?  Some concerns from commentators are that the bill only allows 18 direct shipments per year from wineries. Additionally, deference is given to wineries and producers with respect to direct shipment while forgoing the inquiries from state retailers. (It is suggested that allowing retailers to engage in direct shipment would heighten sales for private business and public entities, perhaps especially if Maryland legislators vote to raise sales tax on alcoholic beverages. In the future, Maryland legislators will vote on whether to raise the sales tax on wine, beer, liquor, which is postulated to raise $90 million in state revenue.) Irrespective, this is a large step for Maryland in the direction favorable to the majority of its cohorts. The budding question is as follows: which state is next?

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In Vino Veritas Seminar on Wine Law

by Lindsey A. Zahn on March 24, 2011

Recently, In Vino Veritas, the food and wine society at Harvard Law School, invited Dr. Theo Georgopoulos, director of the Wine and Law Program, to host a seminar on wine law. Dr. Georgopoulos spoke about the professional aspects of studying wine law from an international perspective, as well as discussed the legal issues that are of particular importance to the EU. Edmund Mokhtarian, a 1L at Harvard Law and the author of The Food Buster, recounted his experience as an attendee at the lecture. His musings can be read at In Vino Veritas: Wine Law and Moët. The entry is a splendid description of Dr. Georgopoulos’ seminar and even includes tasting notes of the wines provided at the In Vino Veritas seminar. After reading Edmund’s entry, I am even more excited to study under Dr. Georgopoulos this upcoming summer.

 

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Additional Books on Wine Law

by Lindsey A. Zahn on March 23, 2011

I recently discovered additional reading material relating to wine and law that has more of a political forefront. I am yet to read either of the books in this entry, but from their summaries online, they look like attractive reads for anyone interested in wine law (and they are on my reading list for the summer!).

Wine and War: The French, the Nazis, and the Battle for France’s Greatest Treasure, by Donald and Petie Kladstrup. 53386661 b Additional Books on Wine LawMost of us are familiar with how, in 1940, France fell to the Nazis during World War II — but how many of us are familiar with the successive battles over esteemed French wines? French winemakers have their own story behind World War II, the course of which is resurrected in this piece. “This is the thrilling and harrowing story of the French wine producers who undertook ingenious, daring measures to save their cherished crops and bottles as the Germans closed in on them. Wine and War illuminates a compelling, little-known chapter of history, and stands as a tribute to extraordinary individuals who waged a battle that, in a very real way, saved the spirit of France.” (See Wine and War: The French, the Nazis, and the Battle for France’s Greatest Treasure.)

Wine Politics: How Governments, Environmentalists, Mobsters, and Critics Influence the Wines We Drink, Tyler Colman. What substance is more regulated by our country than wine (and other alcoholic beverages)? It is simply unfathomable, at times, how politics steer the direction and results of wine legislation. However, there is certainly a direct connection (as evident in many On Reserve entries and from hundreds of court cases), and Wine Politics reveals this. “In this economic history of vino, writer, teacher and blogger Colman explains how the wines we drink-that is to say, the bottles that wind up on the shelves and on our tables-are shaped by politics: ‘not only which grapes grow where, what can be written on the label, which wines are exported or imported, which wines are available in local stores, and how much a wine costs, but, perhaps most importantly… affects the quality of the wine in the bottle.’ Colman focuses on two of the biggest producer nations in the world, France and the United States, comparing the hold each has had on the64127918 b1 Additional Books on Wine Law industry. In France, vines grew abundantly and consumption became a national tradition, but Americans have been trying to grow wine grapes for at least 400 years-and have really been successful only in the past 40. The author also examines the significance of terroir, wine critics and distribution networks, the alcohol laws of different states (some dating back to Prohibition) and other factors complicating the relationship between those who make wine and those who want to drink it.” (See Amazon.com on Wine Politics.)

Richard Mendelson, author of From Demon to Darling: A Legal History of Wine in America, has another book to be published by Aspen Publishers this year. The book, Wine in America: Law and Policy, is available for pre-order from Aspen Publishers here.

(Images courtesy of Borders.com.)

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Upcoming Wine Law Seminar in Denver, CO

by Lindsey A. Zahn on March 22, 2011

An upcoming two, day wine law seminar in Denver, CO is to be held April 11 and 12, 2011 at the Grand Hyatt in Denver. The conference will focus on new regulations, rules, challenges, and practical tips for success and features an impressive line of attendees. For more information, see Wine Law: New Regulations, Rules, Challenges, and Practical Tips for Success.

 

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A New York District Court Judge, Honorable Barbara Jones, granted the motion to dismiss of the auction house Christie’s and dismissed the suit against the acclaimed auction house. William Koch, billionaire and avid wine collector, filed suit against the auction house last year claiming Christie’s “induced” him to buy a fraudulent bottle of 1870 Lafite wine at an auction for $4,200. (See Christie’s Wines Dismissal of Koch’s Counterfeit Wine Suit.) In his complaint, Koch claimed fraud, civil conspiracy, and aiding and abetting — alleging that the London-based auction house has sold counterfeit wine “for many years.” (Id.) Judge Jones, in her ruling, reasoned that while Koch alleged he was injured due to misrepresentation made on behalf of the auction house, Koch placed bids on the wine while he knew it was fake, and could thus not recover for his injury. (See Judge Dismisses Koch Suit Against Christie’s.) “Here the cause of his injuries was not Christie’s’ misleading statements but plaintiff’s desire to gather evidence against Christie’s.” (See Christie’s Wines Dismissal of Koch’s Counterfeit Wine Suit, supra.)

Koch has subsequently claimed that he has been sold counterfeit wine, including bottles produced by Thomas Jefferson that were marked, “Th.J.” Although Koch did not claim in this lawsuit that Christie’s sold fraudulent Thomas Jefferson wine, “he alleged that Christie’s ‘had previously auctioned other Th.J. bottles’ owned by German wine dealer and former pop music manager Hardy Rodenstock. Koch claimed he was ‘induced’ into buying them from Rodenstock because Christie’s had described the wines ‘positively’ in auction catalogues when the wines were sold in the 1980s.” (Read more on the German dealer and the process of inspections at Christie’s Wines Dismissal of Koch’s Counterfeit Wine Suit.)

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Updates from On Reserve

by Lindsey A. Zahn on March 21, 2011

Happy Monday everyone! After an absolutely beautiful weekend in the city, as well as some much-needed time spent updating the blog, I am excited to announce some “housekeeping” details before posting subsequent updates relating to wine and law news. The following demonstrates some big moves for On Reserve, all of which I am so eager to share.

(1) I am proud to announce that I was just recently accepted to the 2011 Wine & Law Program at the Université de Reims Champagne-Ardenne for the summer program on Transnational Wine Trade Law. I am incredibly excited to travel back to Europe for the summer and I am especially thrilled to explore the Champagne region of France, as it is a new wine region for me. (Please feel free to send any travel suggestions to lazahn@winelawonreserve.com if you are familiar with the region!) I am very eager to study under Richard Mendelson and Theodore Georgopoulos and I will be sure to share my learnings through On Reserve posts.

(2) In addition to our new layout (which I believe features higher readability and organization, besides its suave appearance), On Reserve now features a new section called “Suggested Reading” where you can find books, articles, blogs, legal documents and legislation, and other professional websites that focus on wine and the law. After writing a note on wine law last semester, I thought the blog needed a highly organized way of displaying some of the resources I found to be the most helpful and guiding. Alas, it will be updated more thoroughly in the future, but for now there are some great reads on the list and I definitely recommend looking at the new page.

(3) I am looking to feature a guest blogger sporadically within the new few months. The guest blogger can write one article or the blogger may write several articles pertaining to wine and law or politics in the wine industry. Please contact me at lazahn@winelawonreserve.com if you are interested.

(4) We recently partnered with VinVillage, as you might have noticed from our sidebar links, which is a great resource for wine and food lovers. “VinVillage promotes locally based social wine groups and connect them with ‘like-minded’ wine lovers in their home cities and around the U.S. by bringing the membership together with an enhanced local and online ‘wine life-style’ experiences offering unique and exclusive wines, events, products and service.” I had the pleasure of working with Rob Barnett, the CEO and Founder of VinVillage and also part of the American Wine Consumer Coalition (AWCC).


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H.R. 5034 is Now H.R. 1161

by Lindsey A. Zahn on March 20, 2011

The bill many wine lovers feared last year, H.R. 5034 or the Comprehensive Alcohol Regulatory Effectiveness Act (CARE), is now known as H.R. 1161, the Community Alcohol Regulatory Effectiveness Act of 2011. The text of the 2011 Act is identical to the second version of H.R. 5034 introduced to the House last year. “The goal of the CARE Act of 2011 is to recognize and reaffirm that alcohol is different from other consumer products and that it should continue to be regulated by the states . . . [and] would give states unprecedented, unwarranted powers to regulate wine in interstate commerce” (See Alcohol Regulatory Roundup: St. Patrick’s Hangover Edition.) Representative Jason Chaffetz, a Republican Congressman from Utah, is the main sponsor of the 2011 bill.

The new bill already received a strong reaction from Congressman Mike Thompson, who postulated that, “The federal government has no business picking winners and losers in the wine, beer, and distilled spirits industry. Yet the Comprehensive Alcohol Regulatory Effectiveness Act would do just that by banning the direct shipment of wine and other forms of alcohol in the U.S. The impact of this bill would be devastating for brewers, vintners, distillers, importers, and consumers across our country. Specifically, this bill would allow states to replace federal standards with their own, making it harder for out-of-state producers in California and elsewhere to comply with other states’ laws . . .” To read the full reaction statement of Congressman Thompson, visit Congressman Condemns Reintroduction of CARE Act. The press release from the Beer, Wine, Spirits Producer and Importer Associations can be accessed at Beer, Wine and Spirits Producers Urge Congress to Reject the ‘Community Alcohol Regulatory Effectiveness’ Act of 2011.

Some additional articles relative to the new bill are U.S. Congressman Introduces New Act Threatening Direct Shipment and New Wine Bill in Congress Takes Aim at Consumers.

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Schild Estate: Questionable Bottling Practices for 2008 Shiraz

March 17, 2011

This article stems from a tip sent in by Professor Chris Buccafusco, a professor at the Chicago-Kent College of Law. Professor Buccafusco lectured about geographical indications in relation to the wine industry. I posted his video a few months ago, which is a must-view for anyone interested in wine and law. It is available at War on Terroir: Chicago-Kent College of Law.

Recently, Wine Spectator featured an article on the Australian winery Schild Estate, a family-owned winery in the Barossa Valley of Australia. (See Bait and Switch?) Schild Estate produced a 2008 Shiraz that was awarded at one of the Top 10 Wines of the Year in 2010 by Wine Spectator. Shortly thereafter, the family-owned winery found itself with limited supply of the 2008 Shiraz and increasing demand for the bouquet. Its solution? To purchase, blend, and bottle additional wine under the same 2008 Shiraz label from other growers. Apparently, the winery sought an additional 5,000 cases of the 2008 Shiraz, due to the high demand, and sold it to consumers under the same label as the original bottling — without signifying the difference or making distinction between the two bottlings — and still list the American importer on the bottle. (After reporters contacted Schild Estate, the “winery offered to affix an extra label to the recent bottlings, identifying them as a second blend . . . There is an additional way to tell if it’s an old or new bottling. A code engraved on the bottle indicates the bottling date.”)

The Wine Spectator article muses that, whereas this is technically legal under Australian wine laws and regulations, so long as the label properly designates the type and origin of the wines, the actions pursued by Schild Estate create uncertainty as to “the winery’s integrity and philosophical issues of what defines a wine’s identity.” Great point. More so, this practice seems to be standard for lower-priced or commodity wines, but raises skepticism for wines like the 2008 Shiraz that established high significance within the wine industry and received prestigious awards.

Furthermore, this raises an issue of legal deception. Is it deceptive for a wine producer, after receiving such high praise and awards that distinguishes a particular vintage, to bottle subsequent wine under the same acclaimed label that contains or is composed of grapes not grown from its own vineyard, not to mention grapes absent from the first bottling when the wine received such status? This is particularly questionable for a product that received such strong press, especially considering that many consumers who bought the subsequent bottles may have reasonably relied on the prestige of the original bottling.

What do you think?

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Wine Law Online

March 14, 2011

It has come to my recent attention that there are several new blogs and informative websites covering the  legal issues of the wine industry. This week, I will share them with you.

1. Alcohol Law Review: Moderated by NBWA Senior Vice President, Industry Affairs and General Counsel Paul Pisano, the Alcohol Law Review is “intended to facilitate dialogue about current alcohol law cases, legal challenges and issues around the country.” Focusing on alcoholic beverage issues, the Alcohol Law Review is a comprehensive discussion board on many aspects of the alcohol industry at large.

2. Winelawyer.com Law Offices of Matthew T. Allen:  Mr. Allen practices in Santa Ynez Valley and represents wineries and vineyards with respect to land use, real estate, development, licensing and compliance. His blog, from what is posted, is relatively new but his posts are comprehensive and great resources for any reader with an interest in wine and the law.

3. Lex Vini: Lex Vini is one of the newest wine law blogs and is an incredible collection of contemporary legal information on the wine industry. The blog, hosted by the law offices of Dickenson, Peatman & Fogarty in Napa and Sonoma, features articles relevant to the California wine industry and beyond. Its posts are incredibly well researched and cover a detailed collection of pertinent legal issues in the wine industry. Congratulations!

4. Terroirist: Terroirist blog is a daily wine blog that covers “everything” from politics to different viticultural and vinicultural techniques in the wine industry — daily. It is a great and interesting read, by far. Although not all of its articles are related to legal issues, some of them are. And, those articles that do discuss the legal aspects of the wine industry, are very enjoyable.

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Breaking News: SCOTUS Decides Not to Hear Wine Retailers Case

March 7, 2011

BREAKING NEWS! Today, the Supreme Court decided not to examine the case brought by a group of wine retailers asking to review the case of Wine Country Gift Baskets v. Steen decided by the Fifth Circuit. The justices announced today that they will not give further consideration to whether the Texas law is too restrictive with respect to direct shipment. Wine retailer petitioners believe the Texas law, which allows in-state retailers to directly ship wine to consumers but prohibits direct shipment by out-of-state retailers, discriminated against out-of-state retailers and subsequently violated the Commerce Clause. The Specialty Wine Retailers that petitioned to SCOTUS argued that the Fifth Circuit incorrectly interpreted the 2005 SCOTUS case Granholm v. Heald, which held that a state may not discriminate against out-of-state wine producers with respect to its direct shipment laws. The Fifth Circuit, from which the wine retailers appealed, interpreted the Granholm decision to allow discrimination against interstate wine retailers.

Limited information is available at this time with respect to the recent decision of the justices. The justices did not explain why they refused to consider the appeal by the retailers. When more information is available, additional entries will be posted by On Reserve. (See Supreme Court Justices Beg Off From Hearing Texas Wine Case.)

If you have additional information on this matter, please contact me at lazahn@winelawonreserve.com.

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