Bronco Wine v. Espinoza 12/18/02 CA3

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: C037254

Case Date: 12/18/2002

Preview:Filed 12/18/02 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento)

BRONCO WINE COMPANY et al., Petitioners, v. MANUEL R. ESPINOZA, as Interim Director, etc., et al., Respondents; NAPA VALLEY VINTNERS ASSOCIATION, Intervenors.

C037254

ORIGINAL PROCEEDING; Application for Writ of Mandate. Writ Issued. Bill Lockyer, Attorney General, David S. Chaney, Senior Assistant Attorney General, Damon M. Connolly, Miguel A. Neri, Supervising Deputy Attorneys General, Terry Senne, Deputy Attorney General, for Respondents. Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Jerome B. Falk, Jr. and Steven L. Mayer; Ropes & Gray, Peter M. Brody and Kelly B. Kramer for Petitioners. Keker & Van Nest, John W. Keker, Henry C. Bunsow, James M. Emery, Ragesh K. Tangri and Daniel Purcell, for Intervenor.

1

This proceeding arises out of an original petition for writ of mandamus filed in this court by stipulation of the parties.1 Petitioners, Bronco Wine Company and Barrel Ten Quarter Circle, Inc. (hereafter Bronco), seek a writ of mandate prohibiting respondents Department of Alcoholic Beverage Control and Manuel R. Espinoza, the Interim Director of that Department, from enforcing Business and Professions Code section 25241,2 with respect to wines bearing Bronco's federally approved labels. Intervenor Napa Valley Vintners Association (Intervenor) joins with respondents. We issued an alternative writ and pursuant to

the parties' consent, granted a stay of enforcement of section 25241. At issue are the brand names that appear on labels of Bronco wine. A brand name is distinguished from an appellation

of origin, which states the origin of the grapes used in making the wine. Section 25241 proscribes the use of a brand name on

"wine produced, bottled, labeled, offered for sale or sold in California . . . on any label, packaging material, or advertising," that uses the word "Napa" or the name of any

1

Business and Professions Code section 23090.5 divests the Superior Court of jurisdiction to enjoin or restrain a decision of the Department of Alcoholic Beverage Control, the agency charged with enforcing Business and Professions Code section 25241. The parties therefore have stipulated that jurisdiction to issue a writ of mandate lies with this court.
2

All further references to a section are to the Business and Professions Code unless otherwise designated or implied from the context. 2

federally recognized sub-appellation located entirely within Napa County, or any "similar name . . . that is likely to cause confusion as to the origin of the wine," unless the wine qualifies under federal law for the appellation of origin Napa County and the appellation of origin is specified on the label, packaging material, or advertising. Section 25241 thus ties the

requirements for a brand name to the federal requirement for an appellation of origin, that a specified percentage of the grapes contained in the bottle must come from the viticultural area suggested by the appellation. Section 25241 prohibits the use of the brand names Napa Ridge, Rutherford Vintners, and Napa Creek Winery on the Bronco labels because the grapes used in producing the wines did not come from Napa County although the labels on these wines include a correct appellation of origin below the brand name disclosing the place where the grapes used to produce the wine were grown. Bronco challenges the constitutionality of section 25241 as applied to its federally approved wine labels, contending that, as to wine destined for sale in interstate and foreign commerce, the statute is preempted by federal law.3 The respondents do not

challenge the validity of Bronco's federal labels, the certificates of label approval which grant Bronco the right to place the challenged brand names on its wine, or the federal

3

Because we resolve the case on grounds of preemption, we need not address Bronco's contentions that section 25241 violates the First Amendment and the Commerce and Takings clauses of the United States Constitution. 3

regulations pursuant to which the labels were authorized.4 Rather, respondents claim the state and federal laws share the same purpose and therefore state law is not preempted because it does not stand as an obstacle to fulfillment of the purpose of the federal statute. Intervenor Napa Valley Vintners

Association claims the federal scheme contemplates concurrent regulation which leaves the states free to impose greater restrictions in order to achieve a common end. both claims. The federal law sets forth a complete system for the regulation of the interstate sale of wine. It requires that We disagree with

such wine bear a federal label pursuant to a certificate of approval. The federal law governs the content of both It permits

appellations of origin and brand names on the label.

the concurrent state regulation of appellations of origin but not of brand names. Bronco's federal right to use its brand

names in interstate commerce stems from compliance with a

4

Respondents contend the conflicting federal regulation at issue in these proceedings (27 C.F.R.

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