I am incredibly honored to announce that On Reserve is a finalist for the 2013 Wine Blog Awards in the category “Best Single Subject Wine Blog.” Although I started my blog almost three years ago, this is the first year that On Reserve was nominated for an award and named as a finalist. I am flattered to be part of the industry’s leading blog awards, among many talented and respected wine writers.
Voting for the 2013 awards started today and continues through Friday, May 24th. If you enjoy reading On Reserve, I kindly ask that you consider voting for On Reserve here. (Just press the big, red “VOTE” button.)
Three years passed by and I find myself in love with and amazed by wine law as much as I was when I started On Reserve in June 2010. I am thrilled to pursue wine law not only as the writer of On Reserve, but also in my daily life (as my career). In the years to come, I hope to continue to share insights into legal issues embodying the wine industry as well as my personal journey through the intersections of wine and law.
Finding a bottle of wine with full disclosure of an ingredients list on the label may start to be more common in the U.S. On Reserve recently discussed the idea of full ingredients in a prior post, but recent news indicates that a full ingredients list is starting to appear on several wine labels. California Ridge Vineyards’s 2011 vintage will contain full disclosure of the wine’s ingredients as well as the actions followed to produce the wine. In other words, a food-styled ingredients list is presumed to appear on the labels of Ridge’s 2011 release.
As we discussed several weeks ago, wines containing 7% alcohol by volume or greater are not required to disclose ingredients in full. (However, some disclosure, such as “Contains Sulfites,” is required.) Wines falling into the 7% alcohol by volume category are regulated by TTB, which presently does not require the ingredients list that we see on many FDA-regulated food products (including low volume alcohol wines). Of course, the wine label ingredient list released by Ridge Vineyards contains some differences from what is generally seen on a food label.
While Ridge is not the first winery to release a full ingredients list on its wines, Dave McIntyre speculates that Ridge might have a greater influence over the industry than current full disclosure labels (including those from Bonny Doon, as here and here, and Shinn Estate, as here and here). But maybe instead of focusing on the—intended or unintentional—industry influen
If ingredient lists are to be used on wine labels going forward, perhaps we will start to see some guidance as to when a winemaker can use terms in the ingredient list and exactly what must be disclosed in an ingredients list.
For more information on wine or alcohol law, labeling, FDA or TTB matters, or nutrition fact panels, 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.
This past weekend, I had the pleasure of attending a flag football game on the National Mall here in D.C. We were blessed with some favorable weather on the east coast, allowing me to fully enjoy my spectatorship on the sidelines. In the process, I struck up several conversations with fellow legal scholars, none from which the topic of wine law was absent. One chat in particular paired me with another individual who was familiar with state laws regulating alcohol beverages, and who even wrote a law review article on state laws relating to craft brewers in North Carolina. After our conversation, I started to think fondly about the journey I took some time ago researching my own Note, Australia Corked Its Champagne and So Should We: Enforcing Stricter Protection for Semi-Generic Wines in the United States, covering geographical indications and international wine trade. Perhaps my absolute favorite chapter of my career as a student was researching, drafting, and writing a note exploring the intricacies of the international overtones of wine law and various wine trade agreements. That being said, it is not every day I come across another person who did the same (or similar) during his or her own law school career.
- Justin M. Waggoner, Note, Acquiring a European Taste for Geographical Indications, 33 Brooklyn J. Int’l L. 569 (2008). Justin’s piece is probably one of my favorite showcases of student work related to wine law (and my opinion is not based on the fact that his piece was published by my former law journal). His Note is extremely well written and surveys geographical indications (“GIs”) in relation to food products and alcohol beverages. The piece examines the development of GI protection, the applicable TRIPS provisions, a comparison of the types of GI protection sought by the U.S. and the EU, how the U.S. can benefit from implementing a European system, and the steps to improve or change the current framework.
- Mark Silva, Note, Sour Grapes: The Compromising Effect of the United States’ Failure to Protect Foreign Geographic Indications of Wines, 28 B.C. Int’l & Comp. L. Rev. 197 (2005). Mark’s piece suggests that, despite signing the TRIPS Agreement, the United States is not in compliance with the Agreement. Specifically, Mark argues that the U.S. failed to implement legislation that appropriately protects wine and conforms to the requirements of TRIPS. His piece explores many issues and problems that the current environment may bring about for domestic products in the context of international trade and intellectual property.
- Brian Rose, Comment, No More Whining About Geographical Indications: Assessing the 2005 Agreement Between the United States and the European Community on the Trade in Wine, 29 Hous. J. Int’l L. 731 (2007). Brian’s piece provides a very thorough background of the 2005 bilateral wine trade agreement between the United States and the European Community. The comment explores the implications of the trade agreement between the powers as well as the overarching influence of TRIPS.
- Kevin C. Quigley, Uncorking Granholm: Extending the Nondiscrimination Principle to all Interstate Commerce in Wine, 52 B.C.L. Rev. 1871 (2011). This is a great piece that discusses many of the post-Granholm issues our wine industry faces. Opening with a reference to Chief Justice John Marshall’s love for Madeira, Kevin’s work paints a vibrant picture of Granholm, the commerce clause, and the 21st Amendment.
As lovers of wine and the law, we all know about the renowned 2005 Supreme Court case Granholm v. Heald, as well as several recent wine lawsuits from the early and mid-2000s involving our precious beverage. In the upcoming weeks, On Reserve seeks to focus on additional cases that shaped the legal world of wine as we know it today. Perhaps one of the least recognized wine cases of the early twentieth century stems from the Prohibition time period in America. During that time period, the Eighteenth Amendment prohibited the sale, manufacture, and transportation of intoxicating liquors for beverage purposes within the United States and its territories. See U.S. Const. amend. XVIII, § 1. The exact text of the amendment, by use of the phrase “for beverage purposes,” suggests that intoxicating liquors had a legal purpose aside from consumption, but the amendment fails to define such purposes in subsequent sections. The Volstead Act, the enabling legislation of the Eighteenth Amendment, carved out specific circumstances under which intoxicating liquors were permitted, which included sacramental and medicinal wines that received a license from the federal government. But what, exactly, were the non-beverage purposes for which intoxicating liquors could be used during the Prohibition time period? The Supreme Court case Dumbra v. United States, 268 U.S. 435 (1925), tackles this exact question.
In 1925, a family known as the Dumbras operated their winery under the “sacramental and medicinal” exception to the national prohibition on intoxicatin liquors. The Dumbras operated two distinct businesses in adjoining buildings in New York City on East 16th Street: a grocery store and a winery. In the grocery store, the family sold traditional dry goods and produce; in the winery next door, the Dumbra family produced wine for sacramental purposes. The latter was done with the permission of the federal government (i.e., through a federal permit allowing the Dumbras to manufacture and sell wines for non-beverage purposes).
However, during the era of Prohibition, undercover agents visited the Dumbras’s grocery store pretending to be customers. The agents learned from an anonymous tip that any customer could buy wine from the grocery store for non-sacramental and non-medicinal purposes (i.e., for beverage purposes). The tip said the Dumbras’s store did not ask if the purchaser was using the liquor for non-beverage (or for beverage) purposes. Agents of the federal government obtained a search warrant and went through the properties of both the grocery store and the winery. The warrant allowed the seizure of any intoxicating liquor possessed at the Dumbras’s stores that was in violation of the National Prohibition Act. The agents seized a total of 74 bottles of wine from the grocery store and 50 barrels of wine from the winery. When the agents requested the warrant, however, it was not noted that the Dumbras in fact held a federal permit that allowed them to sell intoxicating liquors for medicinal or sacramental purposes.
The case made its way to the Supreme Court where the Dumbra family claimed that the actions of the agents were an unreasonable search and seizure without probable cause, thus in violation of the Fourth Amendment to the United States Constitution, and sought to quash the search warrant. In totality, the Fourth Amendment reads:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized. U.S. Const. amend. IV.
The Dumbras argued the warrant was issued erroneously because the Dumbra family held a federal permit allowing the family to produce and sell wine for non-beverage purposes. Additionally, the Dumbras argued that the search warrant was issued to an officer having no authority to receive and execute said warrant. The family asked the Court to quash the warrant for the seizure of the 50 barrels of wine from the winery.
With respect to the authority of the agent to execute the warrant, the Court rejected the Dumbras’s argument. The Court cited Steele v. United States, 267 U.S. 505, reasoning that Steele held that prohibition agents or employees of the United Sates have the power and authority to serve a search warrant with respect to provisions of the Espionage Act and the National Prohibition Act. As a result, the Court reasoned, the warrant for the Dumbras’s store was served by an agent who was authorized to execute said warrant.
The Court next discussed whether the affidavit upon which the search warrant was issued provided sufficient grounds for the warrant to be issued in accordance with the laws of the Constitution and the United States. While the Court recognized that the affidavit did not disclose the fact that the Dumbra family held a federal permit allowing their store to sell wine for non-beverage purposes, the Court questioned whether the permit allowed the Dumbra family to avoid search and seizure of their businesses all together.
In the majority opinion, Justice Stone reasoned that the issuance of a federal permit for non-beverage purposes did not allow the permittee to possess intoxicating liquors for beverages purposes and thus did not afford protections to permittees who used the liquors in violation of the National Prohibition Act. Justice Stone concluded that, when a permittee intends to use its non-beverage permit for beverage purposes—thus violating the permit’s use—and if a warrant is lawfully issued, search and seizure is not unauthorized or unconstitutional. To this extent, the possession of a federal permit for non-beverage purposes was irrelevant.
Justice Stone recognized that the federal agent should have revealed the existence of the federal permit when requesting the issuance of the warrant; however, the underlying illegal acts on behalf of the Dumbra family nullified the existence of the permit. Finally, the sale of the liquor to the federal agent was sufficient to show probable cause when issuing the warrant. The Court affirmed the order of the District Court, agreeing that the motion to quash the search warrant was properly denied by the lower court.
I am honored to announce that the Université de Reims Champagne-Ardenne’s Wine & Law Program will host its fourth annual summer school program. I attended the summer program two years ago, during the Summer of 2011. The Program was unquestionably the apex of my law school career and fortified my interest in wine and law. I highly recommend the Program to any scholar interested in the area of wine law. The course takes place over a period of two weeks in the city of Reims, France, appropriately in the middle of the Champagne region. The Wine & Law Program covers many aspects of wine and law, from both an international and U.S. perspective, and is perfectly balanced with many outside trips and visits to local maisons. “This year the Program will focus on Comparative Aspects of Import – Export of Wine and Spirits. It will examine different aspects of EU, US and Asutralian Wine Law related to the legal status of domestic and foreign wines.” (Wine & Law in the European Union Summer Course.) Read more about my experience at the 2011 Wine & Law Program at Life After Champagne: Synopsis of the 2011 Wine & Law Summer Program.
This year, Professor Georgopoulos and the Wine & Law Program are offering two scholarships for the summer program to students applying for the program. Please find all relevant details below.
The Wine and Law Program is pleased to announce the allocation of two (2) scholarships for the next Wine and Law Summer School, to be held in Reims from June 17, 2013 to June 28, 2013. The scholarships are offered as a tribute to the International Seminar “Wine Law In Context,” which is devoted to promote research and teaching of wine law worldwide (See Wine Law In Context: International Seminar Hosted by The Wine & Law Program). The scholarships consist of a reduced fee up to 80% of the standard student fee and are open to students under the age of 30. Priority will be given to overseas students. Applications for the summer school and the scholarship should be sent before May 5, 2013. Applicants should follow the usual procedure and apply at Applications for the 2013 Summer School Are Now Open. Applications that have already been submitted will be also taken into consideration.
An article covering perhaps my favorite topic (intellectual property) in wine law emerged this last week. Unfortunately, or fortunately for On Reserve, the topic did not receive much attention amid major wine publications, but its content does not fail to intrigue at all (at least, not in my opinion). With Croatia’s accession to the European Union scheduled to occur this July, requirements such as the EU’s strict appellation rules must be followed by the joining country. Unfortunately—from the perspective of many Croatian winemakers—the beloved wine called Prošek will ceased to be bottled as such starting July 1, 2013. (See EU Prošek Ban Angers Croatian Winemakers – “Vino Dalmato” Replacement Term?) In March, “the [Croatian] agriculture ministry suddenly announced the traditional sweet dessert wine known as Prošek could no longer be sold under its name.” (Croatian Winemakers Upset by EU Label Rules.) Accordingly, in its negotiations, the EU claimed that the Croatian wine named Prošek is too similar to the name of to the effervescent Prosecco produced in Italy’s Veneto and Friuli Venezia Giulia wine regions. Prosecco currently enjoys legal protection under EU rules that govern other wines like Champagne and Port. The battle against Prošek draws a strong correlation to those endless crusades dueled by many Champagne producers: the demand for truth in labeling and place of origin.
While the names of the wines Prošek and Prosecco may linguistically be similar, the onset between these two wines is quite different from those fought by Champagne. Most, if not all, of the Champagne region’s battles seek to discontinue the use of the term “Champagne” on wine products that do not originate from the region. Most significantly, these wines are usually sparkling wines produced outside of Champagne, France and use the term “Champagne” to describe the style of the wine (or, in some cases, to feed off of the name Champagne and the region’s well-established wine products). Similar notions are seen for dessert wines like Port and Sherry. However, what is quite different in Prošek v. Prosecco is the fact that Prošek is actually a sweet dessert wine produced for centuries in Dalmatia and is not an effervescent wine, like Prosecco. (See EU madness hits Croatia: No More Prošek From July 1.) The two wines are also produced by exceptionally different methods, Prošek through the passito method and composed typically of grapes native to Croatia and Prosecco through the Charmat method (which requires a second fermentation).
Croatia filed an application to protect the term Prošek, but the European Commission requested that the Ministry withdraw said request. Not much is known about the EC’s request or why Croatia’s Ministry of Agriculture failed to explain the EC’s request to Croatian winemakers timely. “Unless Croatia manages to prove the difference and get the ban lifted, the local producers will have to change its name . . . .” (Croatian Winemakers Upset by EU Label Rules.) Unfortunately for Croatia, “[o]nly a few weeks later, Slovenia said Croatia had no right to produce and market teran, a red wine made in the northern tip of the Adriatic, shared by Italy, Slovenia and Croatia.” (Id.)
Photograph property of No More Famous Croatian Prošek From 1 July.
A few months ago, On Reserve posted an article about the two sisters in Arizona seeking to open a winery-brewery establishment. As of last week, the Arizona Governor Jan Brewer signed a bill into law that allows both a winery and a brewery to operate on the same land. The two sisters, Megan Haller and Shannon Zouzoulas, own Arizona Hops and Vines in Sonoita, Arizona. (See Arizona Sisters to Open State’s First Winery-Brewery Combo.) Currently, the sisters are applying for a license to run both a winery and a brewery on the same property. According to New Arizona Law Clears the Way for Sisters to Make Wine, Beer on Same Land, the sisters “had already planted a vineyard and hop field when they discovered that state law prevented the operation of both a brewery and a winery on the same piece of land.”
Before passing this new law, the state of Arizona allowed multiple state licenses to be procured at a single location, but with limitations. For example, an establishment could hold both an active domestic farm winery license and a beer and wine bar license, but could not also hold an active microbrewery license. The bill was introduced to the Arizona Senate in March of this year as SB 1301 and was sponsored by Senator Shooter.
The new law amends Title 4, Chapter 2, Article 1 of the Arizona Revised Statutes and adds Section 4-205.09 titled, “Domestic Microbrewery and Domestic Farm Winery Licneses on the Same Land; Requirements.” The bill was introduced into the Arizona Senate in March and passed by the Senate within a few weeks. While the timing certainly was fast, the success of this law is just one of the many contemporary examples we have that indicate many states in the United States recognize the ever increasing creativity of the industry, and the need for new, accommodating laws and regulations. While the industry constantly faces a theme of antiquated legislation, it is curious to see the progress of several states and the change of laws that govern wine and other alcohol beverages.
Interestingly, the new Arizona law requires that the brewery and winery be in separate buildings and licensed separately, but the tasting room can be shared. Additionally, the licenses of the domestic microbrewery and domestic farm winery must be held by two different persons. Finally, for licensees holding both a microbrewery and winery license on the same premises, they cannot hold any other license that is issued under Title 4 of the Arizona Revised Statutes.
For more information on wine or alcohol law, licensing, 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.
William Koch, billionaire and avid wine collector, is back in court for yet another wine lawsuit—but this one is completely unrelated to our two prior entries discussing Mr. Koch’s lawsuits. In this suit, Mr. Koch is suing Eric Greenberg, a businessman and the alleged seller of counterfeit wine. Koch purchased a number of rare Bordeaux and Burgundy wines from Greenberg in the mid-2000s in the catalogue of New York auctioneer Zachys. Some of the wines are supposedly from the Napoleonic times and the Belle Epoque, and some of the bottles were purchased for at or around $30,000 each. Koch filed a complaint in 2007 in a federal court in New York, after an inspection indicating a number of the wines were fraudulent, and the case just went to trial last week. Purportedly, Greenberg was warned by experts at Sotheby’s around the year 2002 that some of the wines Greenberg sought to sell at auction were counterfeit. See Billionaire Bill Koch Takes on Alleged Wine-Fraudster with Lawsuit.
In his suit, Mr. Koch claims that Greenberg either knew or should have known that the wines were not genuine. The suit started last week before the Honorable J. Paul Oetken of the District Court for the Southern District of New York. According to an article on Decanter, voir dire of the potential jurors became increasingly intense throughout the day, with a librarian who previously read books about wine struck from the jury pool. While the first day at trial dealt primarily with the admissibility of evidence from both parties, the case promises to turn increasingly personal what with Jaime Cortes, a prior employee of Greenberg, testifying against his former employer. See Koch Wine Fraud Case Turns Personal; see also Wine Fraud Lawsuit is a Test of Bottle for Billionaire Bill Koch.
What will the outcome be? Will Mr. Koch have better luck in court this year? Irrespective of what is in store for Mr. Koch’s lawsuit, there is no doubt that the man stands for one thing: the fight against counterfeit wines will continue.
Two years ago, we wrote about Koch’s suit against the renowned auction house Christie’s, where Koch alleged that Christie’s induced him to buy a fraudulent bottle of 1870 Chateau Lafite. Honorable Barbara Jones of the District Court for the Southern District of New York dismissed the case, noting that Koch placed bids on wine he knew was fake and could thus not recover for his injury. The Judge reasoned that, “[h]ere 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. In October of last year, Koch appealed to the Second Circuit Court of Appeals and argued that the District Court erred in its application of the legal standard of doctrine of inquiry notice (among other points) with respect to his purchase in the 1980s from Christie’s of wine bottles allegedly belonging to Thomas Jefferson. The Second Circuit rejected Koch’s argument, but for on the grounds that the statute of limitations expired. The wines were purchased in the 1980s and Koch did not file suit until 2011, thus barring his claim.
Photograph property of Bloomberg.
A four letter acronym was buzzing around the food and beverage industries for several months, the excitement of which has mostly subsided but the importance of which still remains active. FSMA, or the Food Safety Modernization Act, changed a lot for the food industry and is probably one of the most significant changes to U.S. food law in decades. The act was signed into law in January 2011 by President Obama and amended sections of the Food, Drug, and Cosmetic Act (“FD&C Act”). FSMA aims to stop foodborne illness breakouts before adulterated or misbranded food items are released into interstate commerce for sale or consumption.
Some of the new requirements established by the act include updating facility registrations every two years (otherwise known as biennial renewal, the first of which concluded on January 31, 2013), mandating e-mail certain addresses on food facility registrations, and requiring that food facilities establish preventative control measures (or, essentially, a HACCP plan). Additionally, FSMA bestows the FDA with considerable power: the ability to suspend a food facility’s FDA registration should the agency determine the facility’s food has a reasonable probability of causing death or serious illness to humans or animals. FDA first used its suspension powers in November of 2012 when the agency suspended the FDA registration of New Mexico-based peanut butter producer Sunland, Inc.
While it is undeniable that FSMA has many layers, through my experiences thus far, I think FSMA is a great example of how food and alcohol beverages interact in the legal world. Alcohol beverage facilities are not exempt from FSMA, although they are excused from certain provisions of the law (provided they are required to have a permit or register with the Department of Treasury as per the Federal Alcohol Administration Act and are also required to register with FDA). FSMA and related provisions consider alcohol beverage facilities to be food facilities. In general, both domestic and foreign facilities that manufacture, process, package, or hold alcohol beverages for human consumption within the U.S. are required to register with FDA. (And those previously registered were required to renew their registrations by January 31, 2013.) The registration requirement is not new–alcohol beverage facilities have been required to register with FDA since the 2002 Bioterrorism Act.
In addition, wineries and other alcohol beverage facilities are subject to FDA inspections. While this rule is not new either, pre-FSMA winery inspections were not very common. In fact, Wine Spectator reports that, during the 2009-2010 fiscal year, FDA only conducted 132 winery inspections in the U.S. However, this number is growing what with inspection frequency mandates established by FSMA. See Food and Drug Administration: Inspection & Compliance. As 2013 progresses, we are starting to hear about a number of winery inspections by FDA (or state agencies). (Note that a foreign facility is not exempt from FDA inspection assuming that said facility manufactures, processes, packages, or holds food for human or animal consumption within the U.S.) While FDA inspections may be new to a winery, an establishment that is alert, maintained, and informed should not fear an inspection.
While non-alcohol food facilities are held to more onerous standards, FSMA created specific carve out provisions for alcohol beverage facilities. Furthermore, thanks to the assistance of many wine trade associations, some subsequent proposed rules by FDA do not apply in entirety to wineries. In particular, wineries are not required to implement preventative control measures that are required of other food facilities. This is a particularly significant requirement from which wineries are exempted. Wineries, however, should still be aware that they are required to register with FDA (if wines are for human consumption in the U.S.), that the registration must be updated biennially, and that they are subject to FDA inspections (which can be conducted by a state agency). In addition, wineries should understand that they are required to maintain records of the source and destination of their wines and additives and will be held to current good manufacturing procedures.
* Note wineries are still subject to certain provisions of FSMA, such as registration, mandatory recall, and prior notice (for foreign facilities). The applicable sections to alcohol beverage facilities are noted in Section 116 of the Act.
For more information on wine or alcohol law, FSMA, FDA and wine, or federal alcohol law, please contact Lindsey Zahn.