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William Koch -- counterfeit wine

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.


FSMA: What This Acronym Means to the Wine Industry

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.

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.


Wine Law Wrap-Up for the Week of March 18, 2013

Some very exciting wine law news emerged this week, including two stories that top the headlines of many leading publications. In the state of Massachusetts comes a story about direct shipment and a public figure. On the opposite end of the legal spectrum, we have a pending lawsuit brought by Robert Parker’s Wine Advocate against Antonio Galloni. This entry provides, in summary, the details of each.

Drew Bledsoe is advocating a change to the Massachusetts state law on direct shipment. The former New England Patriots quarterback currently operates a winery in Walla Walla, Washington. (See Why Is Dres Bledsoe Tweeting #freethegrapes?.) The current law in Massachusetts effectively bans direct shipment of wine from out-of-state wineries to Massachusetts consumers. Mr. Bledsoe lobbied yesterday in support of House Bill 294, which was introduced last month and is modeled after the direct shipping bill that is currently implemented in several states. His efforts ask the state of Massachusetts to allow residents within the state to have wine shipped to their homes directly from out-of-state wineries. “Bledsoe will make an appearance on Beacon Hill alongside State Representative Ted Speliotis, a democrat from Danvers who sponsored the bill that would uncork the current wine-ordering restrictions.” (Id.) The current state laws of Massachusetts clashes with the ruling from the renowned 2005 SCOTUS case Granholm v. Heald. (See The Shipping News; see also Musings on the Vine: Free the Grapes!.) The state’s law also conflicts with a 2010 ruling from the 1st Circuit Court of Appeals, which held the Massachusetts law to be unconstitutional. (See Massachusetts Direct Shipping Update, explaining that the 1st Circuit found the law to have “a discriminatory effect on interstate commerce because it favors instate interests by preventing direct shipments of nearly all out-of-state wine to Massachusetts consumers . . . .”). Despite this 2010 ruling, the state of Massachusetts has not implemented new legislation to better abide by the requirements stipulated in Granholm.

Finally, Decanter accounts the story of Robert Parker’s Wine Advocate lawsuit filed against Antonio Galloni, alleging fraud, defamation, and breach of contract. (See Robert Parker’s Wine Advocate Sues Antonio Galloni for Fraud and Defamation.) Mr. Galloni, who was employed by Wine Advocate to report on California wines, resigned in early 2013 shortly after Mr. Parker sold the his share to a group of Singaporean investors. Antonio did not deliver a review of Sonoma wines. Although Mr. Galloni was in the middle of completing the report, he explained that he would not be able to finish a comprehensive report of the region in time for Wine Advocate’s February issue. Subsequently, Wine Advocate filed a suit against Antonio Galloni, alleging fraud and breach of contract due to Mr. Galloni’s “intentional and unjustifiable withholding of tasting notes.” In addition, the suit claims Antonio schemed to travel the world, visiting wineries, at the expense of the Plaintiff. For a more detailed report, see Wine Advocate Uncorks Lawsuit at Writer.



Revisiting the Roads to Prohibition: The Maine Laws

One of the most interesting time periods in the American history of alcohol beverage regulation is Prohibition; but the road to Prohibition was not paved overnight. Perhaps the most significant time period is the years prior to the national prohibition on the sale, transportation  or manufacture of alcohol beverages within the United States. Of significant note is a law passed by the state of Maine in 1851 called the Maine Law, or “An Act for the Suppression of Drinking Houses and Tippling-Shops.” (See PapersPast.) The Maine Law, fathered by Portland Mayor Neal Dow, was the first state law that prohibited both the sale and the manufacture of intoxicating liquor (with a few exceptions: alcohol used for medicinal or mechanical purposes and foreign liquor that was imported into the U.S.). While prior state laws (e.g., Maine and Oregon) contemplated the ban of the sale of alcohol, the 1851 Maine Law was the first state law to directly forbid the manufacture of alcohol beverages. The Maine Law introduced the idea of total, nationwide prohibition. By 1855, twelve other states had passed a Maine Law or similar, generally using the text of the Maine Law word-for-word. Shortly thereafter, other states passed similar laws that sought to restrict or prohibit the sale and/or manufacture of alcohol (or certain types of alcohol). (Such laws are collectively dubbed “The Maine Laws.”) In some states, however, the laws were declared unconstitutional.

What is curious to note is that, effectively, the Maine Law prohibited the sale or production of domestic wines, but allowed foreign wines to be sold. The reasoning is due to Article 1, Section 8, Clause 3 of the Constitution, which allows for the free movement of goods. Under Article 1, Section 8, Clause 3 (otherwise known as “The Commerce Clause”), Congress has the power to regulate trade with other nations and among several states. In 1851, Congress had established that it was legal to import goods from foreign nations, alas Maine could not regulate the alcohol beverages imported into the U.S. from other nations. 

Section 1 of the Maine Law reads:

No person shall be allowed at any time to manufacture or sell, by himself, his clerk, sevant, or agent, directly or indirectly, any spirituous or intoxicating liquors, a part of which is spirituous, or intoxicating, except as hereafter provided.

The text of the Maine Law served as a mold for the 18th Amendment of Prohibition. While the 18th Amendment banned the sale, manufacture, and transportation of an intoxicating liquor within the U.S. (as well as the importation or exportation from the U.S. and its territories), the prohibition of both the sale and manufacture of alcohol beverages stems from the 1851 Maine Laws. The National Prohibition Act also recognized the exemption of alcohol used for mechanical and medicinal purposes, which were carve-out provisions in the original Maine Law of 1851. When thinking about wine and contemporary regulation thereof, it is essential to consider not only the history of regulation in the U.S., but the pathways that lead to regulatory movements like Prohibition. The Maine Laws were one of many factors that lead to Prohibition, and the laws may be one of the strongest influences of what eventually became a national prohibition on the sale, manufacture, and transportation of alcohol beverages.

Photograph property of The Daily.

For more information on wine or alcohol law, direct shipping, or three-tier distribution, 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.


We moved to D.C. in August, and with a transfer from a city like New York to a city like Washington, D.C., comes (perhaps) a greater level of awareness—at least, of governmental regulation. Every day, I am surrounded by the architecture of great minds (and great buildings), and every day I think more about the intersections and the mutual exclusiveness of alcohol beverage and food regulation. After becoming associated with a food and beverage law firm, my daily deductions swerved from wine to an immediate indulgence of food (and beverage).

Washington, D. C. Lincoln MemorialSince starting my work here, I deal a lot with food issues, and I am grateful for the opportunity to do so. Becoming conversant with both food and alcohol regulations means noticing the differences of each—how each are defined and how each are regulated. The Food and Drug Administration (“FDA”) regulates food in the United States and the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulates alcohol beverages in the United States. Plainly put, the aforesaid seems uncomplicated and clear, but in practice, the lines separating alcohol beverages and food can be controversial. 

One of the areas of wine and food law of utmost interest to me is the clear difference in labeling. Very generally speaking, TTB has jurisdiction over the labeling of wine containing 7.0% alcohol by volume or greater (e.g., table wine, dessert wine, etc.) while the FDA has labeling jurisdiction over wines containing less than 7.0% alcohol by volume. (Again, this is a generalization; low-volume alcohols are still required to maintain certain requirements stipulated by TTB, and certain wines, depending on the context, may be required to comply with FDA labeling regulations.)

Perhaps one of the clearest differences between FDA labeling and TTB labeling is the requirement that food labels (as regulated by FDA) contain nutrition fact panels and ingredient statements. Two pieces that remain absent from the labels of most wines are the nutrition facts panel and the ingredients statement. And the question posed by this is simple: why not? With the increased trend of consumer awareness and the desire to know how many calories are present in items consumed, the exact ingredient contents, and various nutrition information, why are nutrition fact panels and ingredient statements not found on the labels of most alcohol? (See Alcohol Industry Grapples with Nutrition Labeling.)

While history suggests that TTB (and its predecessor agency, ATF) contemplated requiring nutrition fact panels on alcohol beverages, no measures in furtherance of securing a nutrition fact panel or ingredients list have occurred. (See TTB Issues Ruling on Use of Caloric and Carbohydrate Claims in Advertising and Labeling in Alcoholic Beverages; see also TTB Proposed “Serving Facts” Label and Alcohol Content Statement on All Beverage Alcohol Labels.) In part, this may be due to lack of consumer interest or concern. More so, the impact on the industry may be extremely costly; for wines, wineries could face the requirement of having every vintage and variety to be analyzed for proper nutrition facts and content. Of course, doing so would increase the cost of producing a wine. Perhaps the alternative is to consider an allowance for a more generalized analysis, as opposed to analyzing every vintage and every variety.

But with products like Skinnygirl, purporting “lower calories” and seemingly attractive to calorie-conscious consumers, on the market, one wonders if the lack of a nutrition facts panel and ingredients statement is proper. On a food label under the jurisdiction of FDA, there are regulations from the agency indicating how and in what contexts certain claims (like “low calories”) can be used. (This is not to indicate that TTB does not have similar–products like Skinnygirl do proclaim calorie count and other nutrient counts like fat, but the format is not of a nutrition facts panel nor do such declarations include all nutrients found on a typical nutrition facts panel.) But forget products like Skinnygirl for a moment–aren’t consumers entitled to know what is in any beverage product, even if no “low calorie” claims are made? Such alcohol beverage products are even less likely to disclose items like calorie count and fat. Is this right? Are we living in a time where there is an increased desire for consumer knowledge on food and beverage products, not excluding alcohol beverage labels?

While the full nutrition facts panel that appears on foods many not be ideal on alcohol beverage labels (for sizing, formatting, cost, and aesthetic reasons), one might still ponder why the TTB is yet to require at least a basic nutrition label and ingredients statement on all products under its jurisdiction. But maybe a more appropriate question is as follows: should the nutrition facts and ingredients be a consideration when a consumer purchases an alcohol beverage (and has such ever really been of concern to most alcohol consumers)?

Photograph property of Lindsey A. Zahn

For more information on wine or alcohol law, labeling, advertising, or FDA 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.


CLE International is hosting an Alcohol Beverage Law Conference in Denver on March 18, 2013 at the Four Seasons Hotel. The conference is co-chaired by Adam P. Stapen and Patrick D. Tooley and will cover Colorado wine, beer, and spirits. The conference will present topics such as Navigating the Agencies, Consumer Promotions, Land Use and Alcohol, Ethics, The Colorado Wine Industry, and Business Valuation. The conference includes up to seven hours of MCLE credit, including one hour of Ethics. To register, please visit www.cle.com/AlcoholBeverage or call (800) 873-7130. A copy of the brochure is available here.

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Some very interesting updates over the last week have occurred for the wine and law community. Below are three of the most interesting, involving a wine storage facility, potential new rules at auction, and calorie labels in the United Kingdom.

East Coast Restaurants Sue WineCare Storage Facility for $2 Million of Wine After Hurricane Sandy—Most of us are familiar with the boisterous Hurricane Sandy that struck the East Coast last fall. In its aftermath, according to New York Restaurants Sue Storage Facility for $2 Million of Wine in Hurricane Limbo, two of Keith McNally’s NYC restaurants—Minetta Tavern and Morandi—filed a lawsuit against WineCare, a storage facility in downtown Manhattan that sustained damages from Hurricane Sandy and filed for bankruptcy on January 30, 2013. Allegedly, the storage facility is yet to allow its customers to gain access to wines held by the facility. In the jointly-filed complaint, plaintiffs allege that WineCare has not allowed its clients to access their wines, despite both requests and demands of the plaintiffs, which are currently held by the defendant without the consent of the plaintiffs. See the rest of the story at New York Restaurants Sue Storage Facility for $2 Million of Wine in Hurricane Limbo. (Article courtesy of Kevin Swersey.)

New York’s Court of Appeals is to review a recent decision that could have some impact on the wine industry at auction sales. According to Lawyers Fight to Keep Auction Sellers Anonymous, the established practice (in New York) of keeping an auction seller’s name anonymous may come to an end if the Court of Appeals affirms the decision by its appellate division. The current ruling does not require sellers to reveal their names publicly, but does state that buyers are entitled to know the name of the sellers (as opposed to the current practice of stating the work is from a “private collection”). If the New York Court of Appeals is to affirm the lower court decision, this could change the practice for wine sold at auction, including auction houses like Christie’s. See the full story at Lawyers Fight to Keep Auction Sellers Anonymous. (Article courtesy of Kevin Swersey.)

Finally, what I find to be incredibly interesting and relevant to my field of work in wine and food law, recent news maintains that the United Kingdom is considering calorie labels for beer, wines, and spirits. This consideration stems from the UK’s desire to reduce or discourage binge drinking. The government feels that, by adding a calorie count to alcohol beverages, the calorie count could encourage individuals monitoring their weight to drink less. See Calorie Labels for Beer, Wine and Spirits Considered by UK Government. No such requirement exists in the United States, at least not for wines that are at or above 7% alcohol by volume or greater. (Wines with less than 7% alcohol by volume are regulated by FDA and are generally required to have a nutrition facts panel, which includes a calorie count, but there can be exceptions.)


I read the article outlining the complaint filed by Duckhorn Wine Co. of St. Helena against Duck Walk Vineyards, and I feel particularly compelled to blog about the complaint by means of both legal interest and personal significance. (I spent some of my childhood summers on the eastern end of Long Island, and I am somewhat familiar with Duck Walk Vineyards, but I am especially interested in the area of intellectual property.) According to Duckhorn asks N.Y. Winery to Modify Label and Sales, Duckhorn Wine Co. filed a complaint against Duck Walk Vineyards on January 15, 2013 in Napa County Superior Court. The complaint alleges breach of contract (specifically relating to trademark), which required Duck Walk Vineyard to mention its geographical indication on the front of its labels. Furthermore, the complaint alleges the failure of Duck Walk Vineyards to provide the location of the vineyard on its wine labels lead to consumer confusion. Duckhorn demands Duck Walk Vineyards alter its labels and halt sales of 50% of its wines outside of New York, New Jersey, and Connecticut. Id. 

Duckhorn’s lawyer stated that Duck Walk Vineyards did not follow a 2003 court settlement in which Duck Walk agreed to several constraints, including placing the vineyard’s place of origin on the front label. “Under the settlement, Duck Walk also agreed not to produce and/or bottle more than 84,000 gallons of wine with the word ‘Duck’ or pictures of ducks on the label unless they’re part of the corporate name ‘Duck Walk Vineyards Inc.'” See Duckhorn asks N.Y. Winery to Modify Label and Sales. The lawyers for Duck Walk argue that Duckhorn does not own the word “Duck.”

It is true that Duckhorn and Duck Walk Vineyards both sell wine in the United States, at especially different price points, but to the extent that their products are “similar” to cause even remote disorientation among consumers is a rather weighty argument. A quick search of the TTB COLA database, restricting results to wine and fortified wine labels, indicates that there are over 400 labels since February of 2007 that use the word “DUCK” on either the fanciful name or brand name of the label. (Editor’s note: the aforementioned results are of labels that, to a greater percentage, are from Duckhorn Vineyards; additionally, not all labels from other vineyards with the word “DUCK” also include images of a duck or ducks on the label, but most of the labels do.) 

Finally, the word “DUCK” is what trademark attorneys would say is a generic term—meaning, the word “DUCK” is of common use (a word one would find in a dictionary). And, because I think it is necessary, a closer look at some of the labels at issue: a Duckhorn label and a Duck Walk label. To what extent do these labels look like they originated from the same producer? And some other vineyards that use the term “DUCK” on their labels, just to confirm the presence of “DUCK” on multiple labels: Duck PondButterducks, and Diving Duck. To what degree do any of these labels promote consumer confusion?

For more information on wine or alcohol law, labeling, or trademark, 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.


Two Sisters Battle Winery-Brewery Law in Arizona

One of the unique aspects of the alcohol beverage industry is the clear and continual regulatory separation of different facets of the industry. For example, in the United States, laws known as tied house laws heavily regulate any form of vertical integration in the alcohol beverage industry. Generally speaking, tied house laws help to divide the basic three tier system—the interests of manufacturers, wholesalers, and retailers are separate and distinct. Essentially, the name “tied house” speaks for itself: houses of different tiers that are tied together by means of ownership (i.e., not separate nor distinct) are generally illegal in the United States. And while tied house laws have populated our federal and state laws as post-Prohibition anti-segregation measures, perhaps the more curious inner-industry regulations are those that separate ownership of one type of alcohol beverage producer from another.

A classic example recently came to news in a heartfelt battle against the law by two Arizona state sisters. The two siblings sought to establish a winery-brewery in Arizona, but were inevitably halted by a strict provision of the law: Title 4, Chapter of Arizona Revised Statutes prohibits a winery from brewing beer on the same property. (See Sisters Fighting Law to Open Arizona Winery-Brewery.) And while other states permit the operation of a winery-brewery, there seems to be no indication why the Arizona statutes explicitly forbid the dual operation. (See, e.g., Sneak Peek at Winery and Brewery in Downtown JacksonVirginia’s First Winery-Brewery Expands this Fall.) Despite the faithful attempt of the sisters to question the Arizona law, the prohibition currently remains in tact.

The above story seems rather curious, as lawmakers—at some point in time—proactively sought to prohibit a winery and brewery from operating under one roof. But the question is why? And is this law destined to change? The answer to the latter is simply this: Perhaps. As has been a recurrent pattern in the wine world, change is often necessary—but how quickly changes in the law are executed remains unknown.

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.

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The last week presented three very different stories in the context of wine the law, ranging from criminal law to constitutional law issues. The most pertinent are summarized below. On the wine law docket for the week of January 14, 2013:

  • Chateaux Commence Legal Action Against St. Emilion Classification: This week, several chateaux filed a complaint against the classification of the eponymous St. Emilion classification, griping over the selection process. The three châteaux, Château Croque-Michotte, Château La Tour du Pin Figeac and Château Corbin-Michotte, joined together to dispute the recently published classification for Saint Emilion. Last September, the Institut National de l’Origine et de la Qualité  (“INAO”) published a new classification for Saint Emilion, to the discontent of several chateaux. (See generallyOnly Three Chateaux Dropped in new St Emilion ClassificationSt Emilion Classification: First Rumblings of Discontent.) The three chateaux claim there were errors in the selection procedures that decided classification status, such as at the tastings. The grievances will be heard before an administrative tribunal in Bordeaux, and Frank Bicard, director of the Conseil des Vins de Saint Emilion, relayed that the Conseil plans to defend the selection process. However, some feel the revision of a classification should provoke questioning as to the interest best served and as for what purposes such classification systems are upheld. Since the first article was published, Decanter posted an update that ascertains the owner of Château Croque-Michotte will seek compensation damages if a judgment is rendered in favor of the three châteaux.
  • Massachusetts residents still cannot receive direct shipment of wine from out-of-state wineries:  Three years ago, Judge Rya Zobel of the U.S. 1st Circuit Court of Appeals ruled a 2006 Massachusetts law unconstitutional and directed the Massachusetts legislature to correct the law. In its current form, the law bans direct shipments from wineries to consumers for wineries producing more than 30,000 gallons per year and who retain Massachusetts wholesalers. The type of exclusion currently allowed under Massachusetts law is the type of exclusion that was ruled unconstitutional by the 2005 Supreme Court case Granholm v. Heald. The original case, Family Winemakers of California v. Jenkins, was filed September 18, 2006, “stating that current Massachusetts law violated the nondiscrimination principle of the Commerce Clause, which prohibits ‘laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state businesses.'” (See Not Improving With Age: Three Years After Court Ruling, Legislative Inaction Stymies Wine Direct Shipping, quoting U.S. Supreme Court, Granholm v. Heald, May 2005.)
  • Finally, in the news of criminal law and wine, a federal judge ruled that FBI agents acted properly when agents searched the home of an accused wine counterfeiter, Rudy Kurniawan, after his arrest last year. Kurniawan’s attorneys originally moved to exclude evidence from admission at trial. The attorneys argued that the search conducted by FBI agents was warrantless–and therefore violated Kurniawan’s Fourth Amendment rights. The government attorneys argued that, while the search may have been conducted without a warrant, there was enough probable cause given the situation to make the search reasonable. “The government lawyers noted that Kurniawan “on multiple occasions” had received shipments of empty bottles of very expensive wine which he had requested from a Manhattan restaurant and a New York collector and that last February he had tried to sell homemade counterfeit wine through a third party at a London auction.” (See Kurniawan Loses Bid to Exclude Counterfeiting Evidence.) Additionally, the government attorneys argued that the FBI agents feared destruction of the evidence by Kurniawan’s mother before the agents could obtain a search warrant from a magistrate. However, District Court Judge Berman disagreed with the arguments posed by Kurniawan’s attorneys. Siding with the arguments posed by the government attorneys, Judge Berman reasoned that, even if the search was conducted without a warrant, there was enough probable cause at the time the search was conducted to render the search reasonable.