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Hillside Select: Napa Vintner Sues Angwin Winery Over Name

Napa Valley vintner Shafer Vineyards recently filed suit against Angwin, California winery owner, Mike Beatty (doing business as Howell Mountains Vineyards) for use of the term Hillside Select on its wine. Shafer Vineyards—who according to the USPTO database registered the mark Hillside Select in January 1990—alleges Mr. Beatty used the Napa Valley vintner’s registered mark Hillside Select on wines produced by the Angwin winery. The complaint was filed in Napa County Superior Court in December and alleges federal and state trademark competition and likelihood to cause confusion, as well as unfair competition.

Shafer Vineyards’ signature wine is a cabernet sauvignon (dubbed Hillside Select) and its 2010 vintage sells for about $250. See Shafer Vineyards 2010 Hillside Select® Cabernet Sauvignon. According to the complaint, defendant was selling a red wine called Hillside Select; plaintiff demands that defendant stop using the name Hillside Select on its wines, as well as pay triple damages suffered by Shafer in addition to attorney fees, interest, and other costs. See Shafer Vineyards Sues Angwin Vintner Over Wine Name.

After searching ShipCompliant’s LabelVision, I found at least two other label approvals with the term “Hillside Select” within the class of wine. While one of those approvals does not currently seem to be used in commerce (if ever), the remaining approval seems to have been used on a previous cabernet sauvignon vintage several years ago. (It is not clear if this latter approval is still being used by the particular COLA owner.)

In this case Howell Mountains Vineyards was not attempting to register “Hillside Select” as a word mark, however the above still illustrates the importance of running a trademark clearance search before attempting to register a mark on the USPTO or state databases. If Howell Mountains Vineyards were seeking to register the mark “Hillside Select,” a trademark clearance search on the federal level would have returned results indicating that such mark was already registered to Shafer Vineyards on the USPTO database. The term “Hillside Select” seems to have been used by Howell Mountains Vineyards more as a fanciful name for the wine, and not necessarily as a brand or vineyard name, however the laws governing trademark still hold strong here. Perhaps it is worth noting that, in the case of wines, a proprietor should consider registering or conducting a clearance search for fanciful names.

For more information on wine or alcohol law, labeling, or trademark, please contact Lindsey Zahn.

Note: On Wednesday, January 21st, Decanter reported that Shafer “reached an amicable settlement” with Howell Mountains Vineyard with respect to “Hillside Select.” See more here

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 January 5, 2015, plaintiff Vignerons de la Méditerranée (“VM”) filed a complaint in the Supreme Court of the State of New York County of Westchester against Harrison-based importer Pasternak Wine Imports (defendant). The complaint names Domaines Barons de Rothschild (“DBR”) as a co-defendant to the complaint. Pasternak was the U.S. importer of the French wine company and in its complaint, VM claims breach of contract with damages of over $600,000. The complaint also alleges several other causes of action including implied covenant of good faith and fair dealing, unjust enrichment, tortious interference, and unfair competition.

VM argues that Pasternak conspired to limit the sales of its Pays d’Oc wines in the U.S. A wine boasting Pays d’Oc IGP is one that is produced completely within the Languedoc-Roussillon region of France and has been approved by the Pays d’Oc Wine Producers Union and meets strict quality criteria. According to the complaint, Pasternak agreed by contract not to market, represent, or sell any French Vin Pays d’Oc in the U.S. that was not supplied by the plaintiff, unless defendant obtained written consent from VM. At some point in time during this relationship—the exact date of which is not made clear by the complaint—the winemaker alleges that Pasternak created a subsidiary, Pasternak Wine Imports, LLC, and transferred all benefits, interests, liabilities, and obligations (including distribution rights) under the original Agreement between the parties to the new sub without the consent of VM. Further, interest was purchased by a competing French wine company, DBR (a direct competitor of the French winemaker). The defendant made the subsidiary the exclusive distributor of the plaintiff’s wines without the consent of the plaintiff (in or around March 2007). 

The complaint sets forth that VM sales in the U.S. decreased significantly and the importer failed to remit payment on invoices from the plaintiff. Further, as alleged by the plaintiff, the subsidiary marketed, represented, and sold competing wines from the Pays d’Oc region in the U.S. wines without the consent of the plaintiff. Alas, VM contends Pasternak and DBR conspired to limit the sales of VM’s Pays d’Oc wine while promoting the sale and distribution of DBR wines. In particular:

DBR conspired with [Pasternak Wine Imports, LLC] to preserve and expand its market for foreclosing access to VM products, business and distribution channels in the United States, Puerto Rico and the U.S. Virgin Islands, and by forcing, enticing and/or compelling [Pasternak Wine Imports, LLC] to market and advertise DBR’s competing wines rather than Plaintiff’s wines. As a result, [Pasternak Wine Imports, LLC] failed to comply with its contractual obligations to Plaintiff by failing to properly promote and market Plaintiff’s wines.

See  Vignerons de la Mediteranee vs. Pasternak and Domaines Barons de Rothschild (Index Number 50102/2015), Page 5.

The Commercial Division of New York Supreme Court, where the complaint was filed, handles complicated commercial cases, so should the case proceed, it is quite possible it may be removed (if diversity jurisdiction is found) and even sent to the court’s Alternative Dispute Resolution Program (“ADR”) if the court thinks the case is resolvable under the ADR process and wants it off of the court’s docket. Additionally, much of the outcome of this particular case may depend on how the contract between the two parties was originally drafted (a copy of the contract was not accessible via the public copy of the summons and complaint). 

See more information at Languedoc Wine Group sues US Importer.

To view a copy of the complaint, please see Vignerons de la Mediteranee vs. Pasternak and Domaines Barons de Rothschild (Index Number 50102/2015).

For more information on wine or alcohol law, direct shipping, licensing, or other legal 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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Trademark Can Last Names Be Confusingly Similar for a wine BartonJoseph Barton, Applicant, sought to register the mark (in standard characters) BARTON FAMILY on the Principal Register in international class 33 “wine; wines.” See In re Thomas Barton, Serial No. 85826787 (Dec. 11, 2014) [not precedential]. The Trademark Examining Attorney refused registration of Applicant’s mark under Section 2(d) of the Trademark Act, 15 U.S.C. § 1052(d), asserting that there was a likelihood to cause confusion with the registered mark THOMAS BARTON for alcohol beverages, namely wine, in International Class 33 and with the registered mark BARTON & GUESTIER in typeset letters for wine in International Class 33. Id. at 1–2. (The two registered marks are owned by the same entity.) Applicant appealed and filed a request for reconsideration, which was denied by the Examining Attorney and thus the appeal resumed.

In its opinion, the Trademark Trial and Appeal Board (“the Board”) noted that the Applicant’s mark was more similar to the mark THOMAS BARTON than to BARTON & GUSTIER because the latter mark contained the term “GUSTIER,” which the Board found to be a more distinctive point of difference. Thus, the Board restricted its analysis to Applicant’s mark in relation to THOMAS BARTON (i.e., if the Board were to find that confusion existed between said marks, the Board recognized there was no need to examine whether the same existed between BARTON FAMILY and BARTON & GUSTIER).

The Board started with a discussion of the du Pont factors, noting that the first factor at issue was the relatedness of the goods, which it based on the the goods as identified in the application and cited in the trademark registration. Without much consideration, the Board easily found that the goods were identical (i.e., “wine”) and thus the second du Pont factor weighed heavily in favor of finding a likelihood of confusion. Because the goods were identical, there was a presumption that the channels of trade and classes of purchasers would be the same as well; Applicant admitted that the channels of trade were the same, thus the third du Pont factor weighed in favor of likelihood of confusion.

In comparing the marks, the Board considered the entireties of the marks as to appearance, sound, connotation and commercial impression, in order to determine the similarity or dissimilarity between the marks at issue. Similarity of any one of these factors can be sufficient to find the marks confusingly similar. Further, since the Board founds the goods to be the same, the grade of similarity required to find likelihood of confusion was lowered. The Board noted that, when comparing the marks, “[t]he proper test is not a side-by-side comparison of the marks, but instead ‘whether the marks are sufficiently similar in terms of their commercial impression’ such that persons who encounter the marks would be likely to assume a connection between the parties.” Id. at 5 (quoting Coach Servs. Inc. v. Triumph Learning LLC, 668 F.3d 1356, 101 USPQ2d 1713, 1721 (Fed. Cir. 2012) (citation omitted)). Instead, the Board mentioned that the focus is on an average customer who will retain a general impression of the mark, as opposed to a specific impression.

In its discussion, the Board noted that because both marks contained the term “BARTON,” each mark was similar in appearance and pronunciation. The Board indicated that the name “BARTON” would be perceived as a surname and thus suggest that the same family produced the wine. Consumers familiar with THOMAS BARTON wine would likely assume that BARTON FAMILY was a new line of wine produced by the Barton Family. Further, the Board noted that “Barton” dominated Applicant’s mark BARTON FAMILY, leaving consumers with the impression that such wine is produced by a family business whose surname is BARTON. Similarly, “Barton” dominated the mark THOMAS BARTON whereas the term “Thomas” served more as a modifier, emphasizing the “Barton” portion of the mark. Thus, the Board reasoned, it was not unreasonable to give “Barton” more weight in the Applicant’s mark, the result of which provided a finding of confusion with respect to the first du Pont factor.

While Applicant provided six additional registrations containing the term, “Barton,” as an attempt to show that Registrant’s mark existed in a “crowded field and should be afforded a limited scope of protection,” the Board noted that such evidence was of limited probative value because such did not suggest the marks were used on a commercial scale or that the public had become familiar with the marks. Id. at 7–8. Further, only two of the registrations provided by Applicant were registered under Section 1(a) of the Trademark Act, both of which were owned by the same entity and did not include wine (i.e., applied to whisky and distilled spirits). (The remaining registrations provided by Applicants were based on Trademark Act § 66(a), which did not require a claim of use prior to registration of the mark, thus rendering the registrations of no probative value. Id. at 8.)

The Trademark Trial and Appeal Board affirmed the refusal to register on the grounds that BARTON FAMILY for “wine; wines” is likely to cause confusion with registered mark THOMAS BARTON for “alcoholic beverages, namely wine.” The reasons, as discussed above, encompass the identical nature of the goods, the presumption the foods will move in the same trade channels and be sold to the same classes of ordinary purchasers; and that the marks were similar in sight, sound, connotation, and overall commercial impression. Id. at 9. As mentioned previously, because the Board found a likelihood of confusion existed for the term BARTON FAMILY with respect to THOMAS BARON, the Board did not need to consider the Applicant’s mark in relation to BARTON & GUSTIER.

Can I trademark my surname?

For many winery and vineyard owners, the desire to use a surname or a family name as the business name or a brand name can be tempting. Often times, applicants believe they have an absolute right to register their last name or surname as a trademark with the USPTO. Generally speaking, in practice, this belief plays out as a myth but—like many instances in the law—there are exceptions that may allow for the registration of a surname on the Principal Register. The above case is a good example. Ordinarily, marks that are primarily merely surnames (such as “SMITH WINES”) cannot be registered on the Principal Register even if such names are already used as a business name or brand name and even if no one else is currently using the surname. Under the Lanham Act, a mark that is primarily merely a surname generally cannot be protected unless there is proof said mark has acquired distinctiveness (i.e., secondary meaning). In the past, “primarily merely a surname” has been understood to mean a mark whose primary impact or impression on the consumer is that of a surname and not of a trademark. The trademark law is partially designed to protect the interest of the consumer, specially from being deceived or confused by the use of a mark, and it is overwhelmingly understood that if all individuals retained a right to protect his or her own surname, some level of confusion or deception could inevitably evolve (particularly if said marks were obtained in the same class of goods). This attitude is seen in the above opinion discussing Applicant’s mark BARTON FAMILY WINES and the registered THOMAS BARTON within the same international classes (i.e., wine or namely wine). There are, of course, exceptions and multiple layers to trademark registration—and many aspects can depend on the mark itself (i.e., a unique or rare last name; whether the surname has any other recognized meanings aside from a surname; if the surname is used in combination with other words or other surnames; etc.). In the above case, it is unlikely that the mark THOMAS BARTON would be interpreted as “primarily merely a surname” because of the presence of the first name “THOMAS” in combination with the surname. However, if the mark contained only the surname “BARTON,” the result might be different. An interested party should contact his or her legal counsel for more insight.

Image property of Snooth.

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.

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As many wine and direct shipping advocates are aware, the new year marks a step forward for Massachusetts: the legalization of direct to consumer shipping for U.S. wineries shipping to Massachusetts customers. In 2013 and 2014, former NFL quarterback Drew Bledsoe lobbied to pass a Massachusetts law in favor of direct to consumer shipping of wine because he could not ship wine from his Washington state winery to consumers in the Commonwealth. See, e.g.Massachusetts Legalizes Winery Direct Shipping, but Questions Remainsee also Wine Connoisseurs, Vineyards Eagerly Await New Direct Shipping Rules. And, while on its face, this new law sounds like a triumphant victory for a state that previously enacted legislation disfavoring the wine industry (e.g., Granholm v. Heald and Family Winemakers of California v. Jenkins), such news, unfortunately, has not come without additional concerns for industry members.

The new Massachusetts direct shipping law reportedly “accidentally delete[s]” a provision that previously allowed farm wineries to self distribute within the state. See As Deadline Looms, Farmer-Wineries Still Await Fix Promised by LegislatorsIn effect, this means that farm wineries cannot sell directly to retailers, a privilege that was previously allowed by Massachusetts law, and must instead make use of the state’s three tier distribution system and sell their wine to wholesale distributors before it can reach liquor stores and restaurants. For the thirty-four small wine and hard cider producers meeting Massachusetts’ “farm” definition, this change means each could opt to work with a wholesaler to distribute their wine to retail locations. Unfortunately, most of the Massachusetts farm wineries do not produce enough product to attract larger wholesalers and, even if they were to contract with distributors, doing so could cut a large portion of their profit margin. This is essentially why the Massachusetts law previously worked so well for lower volume producers: the freedom to bypass the wholesale distribution model and sell directly to Massachusetts retailers and avoid added costs or cuts in profit. It is reported that the removal of the farm winery’s ability to self distribute was not discussed nor mentioned when the new direct shipping to consumer law was drafted. According to Tom Wark at Fermentation, “The issue of self distribution was never debated in 2014 in Massachusetts. Whether wineries or cideries should be allowed to continued to sell direct to retailers was never at issue.” See Something Sneaky Happened On the Way to Direct Wine Shipping in Massachusetts. Mr. Wark reasons that “special interest” played a part in the removal of a provision Massachusetts farm wineries possess for many years.

In early December, Massachusetts legislators promised the wine community that the new law with the deleted provision would be corrected before it went into effect on January 1, 2015. As of December 31, 2014, however, The Boston Globe reported that winemakers were still awaiting confirmation that their self distribution privilege would be reenacted. Id. Accordingly, the Massachusetts House of Representatives adopted a revision to the new law that would include the age-old self distribution privilege for farm wineries. The revision was approved by the Senate and is awaiting signage by Governor Deval Patrick (as of December 31st). See Senate Backs Fix In Farmer-Winery Law.

Update January 5, 2015: After speaking with Kyle Schmitt at Homestead Hard Cider of Attleboro, Massachusetts this afternoon, it wast mentioned that the question of accountability for the deletion of a privilege farm wineries exhibited for 40 years still remains unanswered.

Update January 5, 2015: As reported by Massachusetts Live, the Massachusetts Governor did actually sign the fix into law. See Massachusetts Wine and Hard Cider Makers, Threatened by ABCC Advisory, Live to See Another Day. An “eleventh hour” new law was signed by the Governor on December 31, 2014 just in time for the new year, and carves out an exemption for state producers meeting the Massachusetts farm winery and cider definition, allowing such to self distribute to retailers. At the same time, the state will still allow direct to consumer shipping provided that the producer meets and follows the state’s laws.

To read a copy of the signed bill, see Massachusetts Farm Wineries Bill. For more information on Massachusetts’ Session Law on direct shipping, see An Act Authorizing the Direct Shipping of Wine.

For more information on wine or alcohol law, direct shipping, licensing, or other legal 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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Is CENTURY Confusingly Similar with SECOLO for Wine?

The Biltmore Company, Applicant, sought to register the mark CENTURY (in standard characters) for wine in International Class 33. See In re The Biltmore Company, Serial No. 85561663 (Nov. 21, 2014) [Not precedential]. Originally, the Trademark Examining Attorney refused registration under Section 2(d) of the Trademark Act, 15 U.S.C. § 1052(d), on the grounds the Applicant’s use of its mark was likely to cause confusion with registered mark SECOLO for table wine in International Class 33. In its decision, the Board noted that the word, “Secolo” it Italian for “Century.” Upon refusal, Applicant appealed and filed a request for reconsideration; the Trademark Examining Attorney denied the request for reconsideration and the appeal resumed.

Upon examination, the Board started with the du Pont factors, particularly with relatedness of the goods, the evaluation of which the Board based on the cited application and registration. As one might expect, the Board easily found relatedness between “wine” and “table wine,” noting that “table wine” is a “type of wine” and were thus “encompassed by Applicant’s broader identification” (i.e., wine). Id. at 3. Noting there are no limitations of goods with respect to channels of trade or classes of customers, the Board presumed that both Applicant and Registrant offered “at least table wine for consumption to the same classes of consumers through identical distribution channels.” Id. The second and third du Pont factors thus heavily favored a likelihood of confusion.

After, the Board reviewed the first du Pont factor, i.e., whether the marks or similar or dissimilar with respect to sound, appearance, connotation, or commercial impression. Similarity of any one factor can be enough to find the marks confusingly similar. The test does not consist of a side-by-side comparison, but rather instead asks whether the marks are sufficiently similar enough with respect to commercial impression such that individuals who encounter the marks would likely believe there to be an association between the two marks or a connection between the parties. Id. at 5. The Board focuses on the recollection of the average purchaser, which is believed to be a general impression of the marks as opposed to more a specific impression. Id. For this particular analysis, the Board found reason in the doctrine of foreign equivalents, under which:

[F]oreign words from common languages are translated into English to determine genericness, descriptiveness, as well as similarity of connotation in order to ascertain confusing similarity with English word marks.

Id. (citing Palm Bay Imp., Inc. v. Veuve Clicquot Ponsardin Maison Fondee En 1772, 396 F.3d 1369, 73 USPQ2d 1689, 1696 (Fed. Cir. 2005)).

The doctrine of foreign equivalents is applicable when there is a likelihood that an ordinary American purchaser—who, for the purpose of the doctrine, is assumed to be knowledgeable in the foreign language—would stop and translate the foreign term into English. The doctrine of foreign equivalents is a rule in trademark law that allows a foreign term to be translated into English to determine whether the term may be registered or if the term is likely to cause confusion with similar, registered marks. “Generally, the doctrine is applied when the English translation is a literal and exact translation of the foreign wording.” Id. at 5. In its opinion, the Board noted there was no dispute that there are a considerable amount of Italian speakers in the U.S., and it was also indisputable that SECOLO is an Italian term that translates to “Century” in English. “Generally, however, applying the doctrine of foreign equivalents is only part of the determination of whether the marks being compared are confusingly similar.” Id. at 6. In addition to similarity of connotation, other factors (such as dissimilarity in overall appearance and pronunciation of the marks, difference in the goods to which the marks are applied, and degree of suggestiveness of applicant’s mark and the cited mark to the respected goods) are considered. Id. at 7 (quoting In re Ithaca Industries, Inc., 230 USPQ 702, 703 (TTAB 1986)).

When analyzing other such factors, the Board found that: (1) The marks SECOLO and CENTURY as dissimilar in appearance but somewhat similar in pronunciation; (2) The terms SECOLO and CENTURY are arbitrary when applied to table wine, and thus SECOLO was conceptually strong as a trademark; and (3) Wine and table wine are overlapping goods sold to the same customers through identical trade channels, which also increased likelihood of confusion. Idat 8.

Interestingly, Applicants argued that because Registrant, when prosecuting its trademark application, admitted that purchasers would not stop and translate SECOLO into its English translation, the Board should thus find that purchasers would take the mark at face value and not apply the doctrine of foreign equivalentsId. However, the Board noted that Registrant took this position in response to a previous refusal to register with respect to prior registered mark CENTURY OF PORT for port wine. Id. The Board reasoned that Registrant’s prior position was not an admission, however may be considered in the totality of the circumstance. In this particular case, the Board took the position that Registrant’s prior opinion could not be treated as its opinion in this circumstance with respect to Applicant’s mark because the matter at hand involved a mark quite different from the prior, third-party registration. (I.e., “CENTURY OF PORT” versus “CENTURY,” the former which includes additional words; SECOLO means CENTURY and does not translate directly to CENTURY OF PORT.)

Further, applicant argued that wine drinkers are used to seeing foreign terms on wine labels, and would thus not translate SECOLO into “Century,” however the Board decided there was “no evidentiary support for this position.” Id. at 9. While some labels may contain foreign text, such does not dictate that a potential purchaser will not translate the term into English.

Accordingly, the Board thus affirmed the Trademark Examining Attorney’s refusal to register, on the grounds that CENTURY would be likely to cause confusion with the mark SECOLO.

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.

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Earlier this year, On Reserve reported about the declaratory judgment suit launched against against Pernod Ricard’s Irish Distillers Limited, owner of the renowned Jameson Irish Whiskey, by Napa Valley-based vineyard Madison Vineyard Holdings, LLC, the owner of Jamieson RanchSee Jamieson Vineyards Takes On Pernod Ricard’s Irish Distillers. The complaint was filed in response to a cease and desist letter originally sent by Irish Distillers to Madison Vineyard Holdings, which asserted that the name “Jamieson” was confusingly similar to “Jameson” and was “likely to cause consumer confusion” or allow customers to think the mark “Jamieson” originated from, was endorsed by, or or authorized by Irish Distillers. The legal battle continued through the summer, including a counterclaim on behalf of the distiller. See The Trademark Battle of Jamieson Ranch Vineyards and Pernod’s Irish Distillers.

This last week, Wines & Vines reported that Jamieson Ranch Vineyards and the makers of Jameson Irish Whiskey settled and that Jamieson Ranch Vineyards would continue to use the mark “Jamieson” on its wines. See Jamieson Ranch Vineyards Keeps Disputed Name. According to Wines & Vines, the president of Jamieson Ranch Vineyards assured Irish Distillers that Jamieson Ranch Vineyards was in the market to produce wine—and not spirits. Id. “Jamieson Ranch” is the fourth name the property in Napa has had since 2009.

The remaining details of the settlement are unknown as of present, but one can only begin to imagine the settlement’s course and structure. This win for Jamieson Ranch Vineyards against a subsidiary of global entity Pernod Ricard is certainly an achievement. But, of course, there are many reasons why Irish Distillers may have opted to settle despite dispatching a cease and desist letter. For any company, a trademark infringement lawsuit can be timely, costly, and complicated, regardless of the size of the business. Still, it is possible that the assurance Jamieson Ranch Vineyards would not branch out into the spirits business may have been enough to meet the underlying goals of Irish Distillers.

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.

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Coming Soon to a Menu Near You: Alcohol Calorie Counts

Last week, the FDA published a final rule in the Federal Register that mandates calorie and nutrition information be listed on menus and menu boards to certain restaurants and retail food establishments. The requirements, which go into effect on December 1, 2015, extend to restaurants and retail food establishments that are part of a chain of 20 or more locations (where location means a fixed position or site) that do business under the same name and offer for sale substantially the same menu items. Such establishments are required to include calorie and nutrition information for standard menu items (which FDA defined to mean a restaurant-type food that is commonly included on a menu or menu board food or frequently offered as food on display and self-service food). Restaurants and retail establishments that do not otherwise fall under the requirements of this new rule may elect to become subject to these rules by registering with the FDA every other year. The final rule is the Agency’s attempt to combat the country’s obesity epidemic by confronting consumers with actual calorie counts on meals or food consumed outside of the house.

What has come as a surprise to many is that the new rule actually includes alcohol beverages, which were not included in the proposed rule. In other words, a food establishment falling within the new rule would be required to declare calorie count of an alcohol beverage on its menu (with some exceptions). For restaurateurs whose revenues may depend on or thrive off of alcohol sales, declaring alcohol calorie counts may come as a particularly unpleasant surprise.

While one comment asserted that

[E]stablishing menu labeling requirements for alcoholic beverages could lead to inconsistencies with TTB requirements. One comment pointed out that TTB has rulemaking underway for ‘‘serving facts’’ on alcoholic beverage labels and asserted that, if FDA establishes menu labeling requirements for alcoholic beverages, there could be inconsistencies between nutrition information on labels and menus

and while FDA countered that

[T]he nutrition labeling requirements finalized here do not apply to and have no effect on the labels of alcoholic beverage containers. In addition, the new requirements apply to covered establishments, not to alcoholic beverage manufacturers. In contrast, TTB’s ‘‘Serving Facts’’ rulemaking would establish new requirements for disclosures on alcoholic beverage labels and would apply to alcoholic beverage bottlers and importers

it is curious to consider how, in practice, the disclosure of an alcohol beverage’s calories or nutritional information may translate. 79 Fed. Reg. 71156  (Dec. 1, 2014). Currently, TTB does not require calorie nor nutritional disclosure on the labels of alcohol beverage products falling within its jurisdiction (with few exceptions, such as if the product makes a calorie or carbohydrate claim or statement). And whereas the FDA is not requiring a TTB-regulated manufacturer or importer change its labels, the FDA is asking retail establishments, such as restaurants, that sell such alcohol beverage products to provide information on the product’s calorie count and nutrition that is not currently available on most alcohol labels. The agency indicates, in its response to the comments for the final rule, that a covered establishment will have “significant flexibility in choosing a reasonable basis for their nutrient content disclosures, which can include a database such as the USDA’s National Nutrient Database for Standard Reference.” Id. Perhaps some of this is foreshadowing what is to develop on TTB’s end with respect to serving facts.

Foods that the final rules specifically excludes from the rule’s nutrition and calorie requirement include the following:

  • Foods that are not standard menu items, such as condiments, daily specials, and temporary menu items;
  • Food that is part of a customary market test;
  • Self-service food;
  • Food on display that is available for sale for less than 60 days per calendar year or fewer than 90 consecutive days (in order to test consumer acceptance); and
  • Alcohol beverages that are food no display and not self-service food (such as bottles behind the bar used to prepare mixed drinks).

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

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On Reserve Author Quoted in The Wall Street Journal

Interstate Shipping-Flap Rattles N.Y. Wine Retailers

The Wall Street Journal recently published an article detailing the New York State Liquor Authority (“NYSLA”) and Empire Wine dispute on retailer direct shipment to consumers. The retailer originally filed suit against the NYSLA in September, shortly after the Authority issued a letter to Empire stating the retailer violated a state regulation that allows the NYSLA to revoke, cancel, or suspend a liquor license due to “improper conduct” of the licensee. In November, Empire’s case was dismissed by a New York State Supreme Court, and the retailer was instructed to exhaust its administrative remedies before commencing action in court. Empire is currently scheduled to appear before the Authority on January 23rd for a revocation hearing. 

To read the WSJ article, please visit Interstate Shipping Flap Rattles N.Y. Wine Retailers.

Photograph snippet property of The Wall Street Journal.

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Justice Doris Ling-Cohan, a Manhattan judge, reversed the New York State Liquor Authority’s (“NYSLA”) decision to revoke the license of a Long Island farm winery. The judge dismissed three charges brought on behalf of the NYSLA against Vineyard 48, a Southold, Long Island-based farm winery. Justice Ling-Cohan noted that the revocation, along with the three charges brought on behalf of the NYSLA, “shocked the court’s sense of justice.” See N.Y. Winery Defeats Bid to Have License Revoked.

The NYSLA argued that Vineyard 48 violated its farm winery license by “permitting a dance party type atmosphere.” Id. Neighbors of the winery alleged that the owner “turned the place into a rock concert venue, complete with violent, lewd and drunken behavior.” Id. At a board meeting to adopt the revocation recommendation of the administrative law judge, the chairman of the NYSLA voted to revoke the license, noting, “I think I know what a wine tasting is,” and that Vineyard 48′s DJ, dancing, and nightclub atmosphere did not fit such definition.

Despite the SLA’s findings, the court in Joseph Paul Winery v. New York State Liquor Authority, 101755/2013, held the NYSLA ignored its own due process protections as well as the Administrative Procedure Act (“APA”) by allowing complainants to testify before the NYSLA’s governing board without giving prior notice to Vineyard 48. Further, the witnesses were not sworn in, nor was Vineyard 48 granted the opportunity to cross examine the witnesses. Justice Ling-Cohan noted that the NYSLA’s allowance of unsworn testimony outside the record violated the winery’s due process rights. 

Further, the court noted that, despite the APA’s requirement that the NYSLA issue regulations defining permissible activities by farm wineries, none had been adopted by the NYSLA since 1974 (the year the Farm Winery Act was originally passed). In other words, the statute as written permits wine tastings but does not define the term or prescribe any requirements other than the proprietor be personally present and only New York State-produced wines can be poured. The judge noted that the permissible activities were extremely broad. Currently, the statute is written such that a farm winery may “engage in any business on the licensed premises subject to such rules and regulations as the NYSLA may prescribe.” Id. The judge particularly noted that, while the NYSLA’s chairman may “know what a wine tasting is . . .  unless petitioner and the wine-making community are also mind readers, his personal and subjective opinion as to how to conduct wine tastings” was immaterial in the absence of any duly enacted regulations on behalf of the NYSLA. Id. As a result, the court held that the charges be dismissed as void for vagueness.  

The court said that “the extreme penalty of revocation, in the absence of any prior prosecutions of violations or notice of objectionable conduct” was unwarranted for the three remaining charges. Instead, the court reasoned, if the NYSLA were to issue a penalty, the penalty needed to be lesser than revocation.

This is an interesting result, especially given the upcoming license revocation hearing scheduled for Empire Wine. In September, Empire brought suit against the NYSLA in a New York court, which dismissed the suit in November. While the suit against the NYSLA was not dismissed on the merits, Empire was instructed to exhaust administrative remedies first. A dismissal of this type does not preclude the retailer from bringing a suit against the NYSLA once administrative remedies are exhausted, and Empire contends that the company is prepared to fight the NYSLA going forward. If, after administrative remedies are exhausted, Empire brings suit agains the NYSLA again, it is curious how a court might interpret the statute upon which the NYSLA currently relies to support its argument in favor of jurisdiction over out-of-state shipments of wine by a New York licensed retailer. In the above case, the court dismissed the NYSLA’s charges as void for vagueness, considering the absence of duly enacted regulations on behalf of the NYSLA. In the Empire case, the retailer argues that the statute at issue is also vague—but this time, in the context of out-of-state wine shipments and “improper conduct” on behalf of a licensee or permittee. For more information on the Empire Wine lawsuit against the NYSLA, please see Retailer Empire Wine Sues New York State Liquor Authority: Direct Shipping and Court Dismisses Empire’s Lawsuit Against NYSLA.

Update: After the publication of this article, the revocation hearing for Empire Wine was rescheduled from December 3rd to January 23rd. This is the second time the hearing has been delayed (the original hearing was scheduled for October 23rd). Read more at Empire Wine Hearing Delayed After FOIL Appeal.

For more information on New York State wine or alcohol law, or establishing a winery, brewery, or distillery in New York, 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 Reserve Wine Law Blog Top 100 Blawgs American Bar AssociationIt is truly an honor to share that On Reserve was named one of the top 100 legal blogs or “blawgs” of 2014 by the American Bar Association Journal (“ABA”). This nomination is incredibly exciting for On Reserve, which was just added to the ABA’s blog directory this last year. From the ABA directly:

No, we don’t just go through the 4,000-plus blogs in our directory and consult a Magic 8 Ball to decide what to add or scratch off our list. We remember the blogs that have tipped us off to breaking news and the bloggers who have compelled us to write about their innovative ideas.

And over the summer, we cue readers—and other bloggers—to write in and let us know about their favorites: When we can see their love for a blog is real and not a marketing hustle, it catches our attention.

If you appreciate the dedication to a “niche” practice, please take some time and vote for On Reserve on ABA’s Blawg Top 100 site. On Reserve is listed under the “niche” category.

A significant thank you to all of those who continue to make the wine world (and the wine law world) stimulating and worth writing about. It is a true honor to not only be part of but document the legal overtones of the wine industry. I am delighted to continue recording the legal advancements and strifes to come.

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