The Fight For The Calistoga AVA, Pt. 1 The Legal Front

Ξ August 9th, 2009 | → 2 Comments | ∇ A Day at a Time, Wine History, Wine News, Wineries |

During the Wine Bloggers Conference, Saturday, we departed on separate busses for a number of ‘blind’ destinations where, first, we heard a Napa Green Presentation. I was fortunate to arrive at Sterling Vineyards. Part one of my education has been posted. Part 2 will soon follow. Back on the bus, we were then taken to what was called a Vintner Discussion Panel. Our grateful group found ourselves at Storybook Mountain Vineyards. There we sat down for a talk titled Do AVAs Matter? presented by Dr. J. Bernard Seps of Storybook (on the left), Dirk Hampson (right) of Nickel & Nickel, and Ladera’s proprietor, Pat Stotesbery (center).
Dr. Seps discussed the Calistoga area overall, its historical and cultural dimensions in the main. Mr. Hampson tackled the question of AVA terroirs, again, with special reference to the Calistoga area, while Mr. Stotesbery provided what I have called a ‘bare-knuckled’ talk on the TTB (Alcohol and Tobacco Tax and Trade Bureau). All gentlemen had important things to say, and I will, in a short time, post their full remarks here. But I begin with Mr. Stotesbery simply because if you are ever in a bar fight you’d want this guy covering your back.
The petition for the recognition of the Calistoga AVA was filed with the TTB in 2003 by Bo Barrett of Chateau Montelena. According the an article in the Napa Valley Register
The designation would affect two wineries, Calistoga Cellars and Calistoga Estates, neither of which source 85 percent of their grapes from Calistoga.
After Calistoga Cellars objected to the AVA application, TTB came back in 2007 with a proposal that would pronounce Calistoga a distinct AVA without forcing Calistoga Cellars to change its name. Calistoga Estates, which was founded after the AVA petition was filed, was not included in the grandfathering proposal.

It is here we pick up the story. All that follows is a faithful transcription of the gentleman’s talk.
Pat Stotesbery I’d like to talk a little bit about what’s going on in the regulatory environment today. It’s been going on for a couple of years now. A little background first. In 1986 we all started operating under one set of rules which basically said that if you pick name for your wine that is a geographically significant name and subsequently, over time, that name becomes an AVA, you’ll have to conform to the normal AVA requirements with your brand or else change your name. And that’s the way the wine industry has operated for 23 years. It wasn’t really apparent until the poster child case of Calistoga came along that the government might not enforce their own regulation.
They’ve now had two proposed rulemakings, that the TTB has written. The first one, number 77, deals directly with Calistoga, and it basically allows a Calistoga winery called Calistoga Cellars to continue to sell their wine under the Calistoga Cellars label even though the wine does not come from Calistoga, which is in direct conflict with the 1986 regulation. Suddenly we find that perhaps the TTB is going to take the position that a brand’s rights, if you will, trumps the former regulation, the need for consumer protection and truth in labeling.
But they went even a step further than just allowing this for the case of Calistoga. One interesting side bar point is that the TTB continues to issue Certificates of Label Approval, also known as COLAs. They gave one to Calistoga Cellars, and they [Calistoga Cellars] had filed for that prior to the filing of the Calistoga AVA application by Chateau Montelena, but there was another winery called Calistoga Estates [whose COLA] was filed after the Calistoga AVA application was filed. Notwithstanding that, the TTB approved their COLA, but when they made the rulemaking they excepted Calistoga Estates out. They said ‘you can’t continue to use that label, but Calistoga Cellars, you can’.
They went a step further. They issued rulemaking number 78 which takes this grandfathering concept that if you’ve been in business for X amount of time, or you’ve made X amount of wine, then all of a sudden you’ve established brand rights, and it’s going to trump the ‘86 regulation. And so there could be this ‘rolling’ grandfather for anybody who had done this, they will have the right to continue to do it in the future.
In addition to the grandfathering right, 78 also says that, [keeping in mind] all this great talk we’ve had about appellations and sub-appellations and the meaningfulness of it, and the consumer recognition of the importance of it, “we’re not so sure” (this is the TTB talking now), “we’re not so sure that it’s such a great thing. We’re not so sure that you should have sub-appellations. And if you do, maybe each sub-appellation is so distinctively unique that they should be recognized and should be the only thing recognized.”
For example, us on Howell Mountain, we can put Howell Mountain on our label but then we can’t put Napa Valley on our label [according to 78]. That wouldn’t be a good thing. And it wouldn’t be a good thing for Napa Valley in general. In fact, the Vintners Association has gone a long way in trying to pass legislation, which exists today, it says anytime you use a sub-appellation of the Napa Valley on your label you have to also put Napa Valley on your label. And that’s important for us to protect the overarching recognition of Napa Valley as a world-class winemaking area. And while it’s good and fine for us all to want to define ourselves as smaller appellations (Pauillac might not be very far if nobody had heard of Bordeaux) the rest of us feel the recognition that Napa Valley needs to be overarchingly important or the rest of us are probably going to lose some ground there.
And so, everything that the TTB is doing in their two regulations [77 and 78] is proposing to wash and water down everything that we’ve spent 23 years now trying to build up and protect.
Further than that, it’s not just the TTB. From the Napa Valley Vintners standpoint, we have for years now been fighting the imposition of other people’s ‘rights’ on the Napa Valley name, not just in California but world-wide. We’ve engaged in registration battles across the globe; Taiwan, Vietnam, China, Italy, Europe… We’re the first recognized Geographical Indicator in the European Union of any area outside of Europe for the value of the Napa Valley. That helped us beat back all the European impositions on our name. And it is still happening all across the world. And right now, we’re having to really battle China because the process is very, very slow.
But you wouldn’t think that we would have to battle here in our own country, with our own TTB who established a set of regulations that has been working just fine for us for a very, very long time.
So here we’ve got the Calistoga situation in specific right now. We’ve got our current representative here, Mike Thompson, he is the chairman of the Congressional Wine Caucus. He and multiple others, over 50 members of Congress, wrote a letter to former [Treasury] Secretary Paulson about Calistoga’s situation. We have written a similar letter to [Treasury] Secretary Geitner, trying to get these two proposals [77 & 78] back in the bottle, to put the genie back in the bottle if you can, and ask them to just support the law that’s been on the books, that’s been working for 23 years. I mean, we can talk all day about who’s right, brand rights, or of our recognition of an AVA, but we established the regulations in ‘86 and we should be living by them.
What their rule-making will do is drive people to quickly try and file for all these COLAs! If they make a Mount Diablo AVA you’ll see everybody out there right away trying to establish a COLA that had Mount Diablo Cellars in the rush to build a brand before the AVA is approved so that they can walk in there and abuse the system. It’s the same thing that we tried to do when we attacked Bronco in their selling of ‘Napa Ridge’ when they had no Napa wine in their label; we were successful all the way to the California Supreme Court with the ruling in our favor.
So that really kind of sums up where we’re at. We do have one other thing that we are pursuing through the Napa Valley Vintners, and that is the designation of place. We’re trying to build a coalition around the world of other wine growing regions of significance to recognize such significance and drive this whole on a world-wide basis. We currently have had two signing sessions in Washington D.C. We have 13 regions really spanning the globe all saying “We’re going to stand next to one another and try and make other people recognize the importance of place and the need for truth in labeling.” So that when a consumer sees the name of something on a bottle they don’t have to read the back label, or read the guy’s website to determine if it is really what they think it is.
When you walk into a store and see a bottle of ‘Calistoga Cellars’ you’re going to assume, as a normal consumer, that that wine is coming from Calistoga. That, fundamentally, just isn’t right.
End of Part 1


2 Responses to ' The Fight For The Calistoga AVA, Pt. 1 The Legal Front '

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  1. Morton Leslie said,

    on August 10th, 2009 at 1:26 pm

    The grandfathering was supposed to end two decades ago when the ATF adopted the new rules for AVA’s. This put on notice those who would add a place name to their winery after the new rules were adopted would not be grandfathered. Problem is the people that make the rules today don’t remember the rules that others in their department made previously. So now does it mean that I can create a winery called Chateau Coombsville or Domaine Tucolay and be grandfathered in making wines from St. Helena AVA should Coombsville(or Tucolay) become an AVA? I better hurry.

  2. Matthew Reid said,

    on August 10th, 2009 at 4:38 pm

    Another point worth mentioning has to do with the comment period following the announcement of the proposed AVA. Every federal rule has a period for comments which must be evaluated before that rule goes into effect. During the comment period for the Calistoga AVA, there were exactly ZERO comments opposed to the AVA. Both “Calistoga” Cellars and “Calistoga” Estate missed the boat. They obviously have some political pull if they can get the proposed rule blocked even after they fail to comment.

    I wrote to TTB for an explanation and got polite responses containing absolutely no information. Sigh.

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