Wine grapes

Wine grapes grow on a vine. A federal judge has refused to dismiss a lawsuit claiming that a California winery mislabeled its Elouan wine as coming from Oregon.

A federal judge has refused to dismiss a lawsuit that alleges a California company deceived consumers by misrepresenting its wine as coming from Oregon.

The complaint, which seeks class action status to allow other consumers to join the litigation, claims the Copper Cane winery of Rutherford, Calif., mislabeled its Elouan wine as “Oregon Pinot Noir,” among other claims, even though it was actually made in California.

The lawsuit contends that Copper Cane violated California laws against unfair competition, false advertising and unjust enrichment, among others.

However, Copper Cane claimed to have “safe harbor” from the lawsuit because its wine labels had all been approved by the federal Alcohol and Tobacco Tax and Trade Bureau, or TTB, and thus had the force of federal law.

Though the grapes were grown in Oregon and shipped to California, the TTB required previously-approved Elouan labels to be changed in 2018. New labels that omit references to Oregon and the Willamette, Umpqua and Rogue valleys were then re-approved by the agency.

Chief U.S. District Judge Richard Seaborg in San Francisco said he can’t determine at “this juncture” whether TTB’s approvals provided the winery with safe harbor and refused to throw out the complaint on those grounds.

There’s no evidence the TTB specifically investigated the winery’s labels for falsity and the informality of the approval process indicates it “likely” can’t provide safe harbor, he said.

Under some case law, the agency’s label approval process is considered too “informal” to have the force of federal law, since it only reflects the alcohol distributor’s representations and “hinges on self-reporting,” the judge said.

Copper Cane also argued the lawsuit’s misrepresentation allegation should be dismissed because the Elouan labels stated the wine was bottled in California, but Seaborg rejected this argument as well.

It’s not clear that two lines of text — “Vinted & Bottled” above “Napa, CA” — would be “sufficiently clear” to prevent the deception of reasonable consumers, he said.

“Furthermore, whether the reference to California on the back-left corner of the label would clarify a consumer’s misunderstanding is too close a call at this stage,” he said.

Seeborg also disagreed with Copper Cane’s argument the complaint should be dismissed because the label lacked “actionable affirmative misrepresentations,” since it didn’t specifically say the wine was solely produced in Oregon.

“This argument ignores the widely understood fact that the location where a wine is produced has special significance,” the judge said.

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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