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Stepping into an intrastate wine war, the California Supreme Court on Wednesday agreed to decide whether winemakers are allowed to use “Napa” on their labels if their grapes are actually grown elsewhere. That decision makes the court the referee in a fight between the powerful Napa Valley Vintners Association — backed by the state Department of Alcoholic Beverage Control — and the tiny Bronco Wine Co., best known for its $1.99 Charles Shaw brand, which is commonly called “Two-Buck Chuck” and sold at Trader Joe’s stores. Six of the justices voted to grant review, with Justice Kathryn Mickle Werdegar not participating. The vintners’ group has long been trying to stop Bronco from marketing its Napa Ridge, Napa Creek Winery and Rutherford Vintners wines because the grapes are grown in Stanislaus County near the company’s Ceres headquarters. In 2000, the group succeeded in backing legislation — Business and Professions Code Section 25241 — that stated that wine sold for interstate or foreign commerce can only use the word “Napa” or any of the valley’s regional names, such as “Rutherford,” if at least 75 percent of the grapes were grown in those areas. Bronco sued the state and successfully blocked the law. Sacramento’s Third District Court of Appeal affirmed in December, holding that the Federal Alcohol Administration Act pre-empted state regulation of wine labels. The justices noted that a grandfather clause in the federal law allowed the geographical names of Napa and other regions to be used on wine brands available before 1986 so long as the true growing areas of the grapes are featured prominently on the label. “For example,” Justice Coleman Blease wrote for the court, “the brand name ‘Rutherford Vintners’ may be used even though [most] of the wine is not produced with grapes grown in Rutherford.” Justices Vance Raye and Fred Morrison concurred. Keker & Van Nest partner James Emery, one of the attorneys representing the Napa Valley Vintners Association as an intervenor, said Wednesday that Bronco Wine Co. v. Espinoza, S113136, raises significant issues. Emery pointed out that the wine industry contributes more than $30 billion to the state’s economy and that the state ought to be able to protect consumers from misleading labels. “If consumers see ‘Napa’ on the label, they should be confident the wine comes from Napa,” he said. “You can’t put a dollar amount on the statute itself, but the industry is important and the confidence of the consumers in the industry is important.” Howard, Rice, Nemerovski, Canady, Falk & Rabkin partner Steven Mayer, one of Bronco’s lawyers, said the case isn’t about consumer protection, wine labeling or the First Amendment, but rather about federal pre-emption. “That’s the issue,” he said. Mayer also said the statute in question targets only Bronco and no other winemaker. “It’s a Napa-only statute. It’s really your classic piece of special-interest legislation,” he said. “You could call your wine ‘Sonoma chardonnay’ and put in grapes from somewhere else and the statute has nothing to say about that.”

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