This blog discusses key proposed changes to the Code of Federal Regulations and their tangible benefits for your winery.

What Is 27 CFR Part 24?

27 CFR Part 24 is the section of the Code of Federal Regulations that outlines federal rules for wine operations, including permits, production, record keeping, and reporting. If you produce wine in the U.S., this is the backbone of your legal compliance with the TTB.

Key Proposed Changes to 27 CFR Part 24:

1. Simplified Winery Applications:

The TTB plans to eliminate the need for detailed written descriptions of certain operations (like spirits or volatile fruit-flavor concentrate operations) when applying to set up a wine premises, as outlined in proposed amendments to 27 CFR Part 24. This will save time on narrative explanations, allowing wineries to focus on their core business and complete applications faster.

2. Focused Wine Premises Descriptions:

Future wine premises descriptions will be more precise and directly relevant. Instead of broad narratives, applications will require a focused description of the wine premises, concentrating on essential details such as building layouts, dimensions, and critical security measures. This streamlines requirements and offers flexibility, allowing submission in narrative or diagram form. TTB officers may also request photographs for clarity.

3. Extended Reporting Deadlines:

The TTB proposes extending the reporting deadline for certain business changes from 30 to a more generous 60 days. This provides more time for proprietors to manage administrative tasks, applying to updates in business information, control, and corporate officers. A new list of corporate officers can also be submitted via a simple letter, reducing bureaucratic hurdles. However, changes requiring a federal basic permit will still adhere to the existing 30-day deadline due to current statutory requirements under 27 U.S.C. Chapter 8.

4. Easier Trade Name Adoption:

Introducing a new trade name for products or operations will be significantly simplified. Wineries may only need to notify the TTB instead of filing an entirely new amended application, as per proposed changes to 27 CFR 24.110. This reduces administrative hassle, allowing quicker operation under the new name with a simple letterhead notice. However, federal law still strictly prohibits false or misleading statements on labels and in advertising.

5. Flexible Record Keeping:

Proposed updates allow more flexibility in where records are maintained. Wineries can keep records at a location other than their physical wine premises without prior TTB approval, provided they notify the TTB. This offers greater operational freedom, especially for businesses with off-site administrative offices or those using cloud-based systems.

6. Clarified Ownership Interest Reporting:

The proposed changes clarify ownership interest reporting. Disclosure will only be required for individuals or entities with a 10% or greater interest in the business, aligning with proposed amendments to 27 CFR Part 1. For wineries requiring a federal basic permit, changes in ownership interests must still be reported within 30 days via an amended application, as mandated by 27 U.S.C. 204(h). This 30-day deadline is a federal requirement, as basic permits cannot be sold or transferred and terminate 30 days after a change in control, necessitating a new application for the new controlling entity.

7. Updated Security Requirements:

The TTB is updating its security requirements, eliminating the current vague narrative description. A new section will specifically require security measures to prevent unauthorized access and theft of commercial property. Applications will need to include a certification that premises security meets these new requirements, as detailed in proposed revisions to 27 CFR 24.27. These updates align TTB security standards with current industry practices, offering more flexibility in securing premises.

The Benefits of Modernizing the Federal Regulations for Wine:

These proposed amendments are more than just administrative adjustments; they are strategically designed to bring significant advantages to the wine industry:

• Reduced Regulatory Burden: The most immediate benefit will be a substantial reduction in paperwork and the need for overly detailed descriptions, leading to less time on administrative tasks and more focus on production, sales, and innovation.
• Increased Industry Flexibility: Extended deadlines and simpler processes offer greater operational freedom and adaptability, allowing wineries to respond to business changes more efficiently and manage administrative responsibilities with less stress.
• Streamlined Compliance: By focusing on essential information and clarifying requirements, the TTB aims to ensure compliance with federal regulations while minimizing unnecessary obstacles, fostering a more cooperative and efficient regulatory environment.

What This Means for Small Businesses:

A crucial aspect of these proposed changes is their anticipated positive impact on small businesses, the backbone of the wine industry. The TTB explicitly believes this proposed rule will not have a significant negative economic impact on small businesses. In fact, its primary goal is to reduce burdens by streamlining information collection, extending deadlines, and allowing off-premises record keeping, consistent with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). While many small businesses will be affected, the TTB expects modest burden reductions across the board. The TTB will actively seek feedback from the Small Business Administration (SBA) on the specific impact of these changes on small businesses.

Need Help Navigating TTB Compliance for Your Wine Business?

These proposed changes are part of the TTB’s ongoing effort to simplify processes and alleviate burdens on the wine industry while rigorously ensuring federal compliance. They are specifically designed to make information collection easier and more efficient by:

1. Eliminating certain information requirements deemed unnecessary or inefficient from wine premises applications.
2. Streamlining and clarifying the description of wine premises and its associated security measures, making it more practical and less ambiguous for applicants.

These modernizations represent a positive step forward, promising a more efficient and responsive regulatory landscape for the thriving wine industry.

Rogoway Law Group helps clients across the wine industry in California, from boutique vineyards to large producers, navigate every aspect of licensing and compliance. We’ll ensure your business stays compliant, efficient, and ready to grow under these proposed rules.

For expert legal assistance with TTB modernizations and strategic legal counsel tailored to your winery, contact the wine lawyers at Rogoway Law Group, a Professional Corporation.

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In California, the process of staying a civil action to compel arbitration is a critical aspect of the state’s legal framework, designed to promote efficient dispute resolution. This blog post explores the legal basis for such stays, the relevant case law, and the procedural nuances involved.

The Legal Backbone: California Code of Civil Procedure §1281.2

The primary legal foundation for staying civil actions in California to compel arbitration is found in California Code of Civil Procedure Section 1281.2. This statute provides that a court shall order arbitration if it determines that an agreement to arbitrate the controversy exists, unless certain exceptions apply.

This statute reflects California’s policy of encouraging arbitration as an efficient and cost-effective alternative to courtroom litigation.

Key Takeaways from CCP §1281.2:

• Courts must order arbitration when a valid agreement covers the dispute.
• A stay of litigation is triggered to allow arbitration to proceed.
• Exceptions apply in cases involving fraud, unconscionability, or third parties who are not bound by the arbitration clause.

Landmark Cases That Shape Arbitration Enforcement

Armendariz v. Foundation Health Psychcare Services, Inc.

In Armendariz v. Foundation Health Psychcare Services, Inc., the California Supreme Court established key principles regarding the enforceability of arbitration agreements.

The court held that arbitration agreements must be both:

• Procedurally unconscionable – Often stemming from surprise or unequal bargaining power.
• Substantively unconscionable – If the terms are overly harsh or one-sided.

In employment contexts, the court also required:

• A neutral arbitrator
• Adequate discovery
• A written decision
• Limited judicial review
• Reasonable costs for the employee

The takeaway: arbitration can’t be used to strip parties of fundamental rights or fair procedures.

AT&T Mobility LLC v. Concepcion

The U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion further shaped the landscape of arbitration by holding that the Federal Arbitration Act (FAA) preempts state laws that disfavor or prohibit certain types of arbitration agreements, including bans on class-action waivers.

Impact on California law:

• State policies that undermine arbitration, even indirectly, are invalidated if they conflict with the FAA.
• Reinforces a strong federal preference for enforcing arbitration agreements as written.

Recent Scrutiny and Evolving Standards

A recent California ruling denied a motion to compel arbitration because the clause lacked clarity and mutual assent, emphasizing how crucial precise drafting is.

The court also partially granted judicial notice, referencing the standards in Quach v. California Commerce Club, Inc., only admitting indisputable and verifiable documents.

What this means in practice:

• Courts will scrutinize both contract language and evidentiary submissions with heightened rigor.
• Vague or boilerplate arbitration language can render a clause unenforceable.

Arbitration’s Role in Efficient Dispute Resolution

When executed correctly, arbitration offers a potentially expedited and cost-effective alternative to traditional litigation, saving both time and resources. However, its efficacy hinges entirely on the enforceability of arbitration agreements. This requires strict compliance with statutory mandates and evolving judicial standards.

For an agreement to be robust and enforceable, it must be:

• Clear and unambiguous.
• Mutually agreed upon.
• Compliant with both state and federal standards (California law and the FAA).

Agreements must also avoid unconscionability, by balancing terms fairly, especially in consumer or employment contexts, allow reasonable discovery, provide a neutral arbitrator, and clarify fee responsibilities.

Failure to meet these crucial requirements can invalidate an arbitration clause, sending the dispute back to court litigation.

Conclusion: Mastering the Complexities of Arbitration

Successfully navigating the complexities of arbitration in California demands a thorough understanding of the legal basis, procedural intricacies, and substantive case law for staying civil actions to compel arbitration.

For legal professionals and businesses, this means:

• Drafting clear, fair, and legally compliant arbitration agreements
• Staying updated on court decisions that refine or redefine enforceability
• Acting quickly and strategically when litigation is filed despite an arbitration clause

Rogoway Law Group Can Help

Whether you’re seeking to compel arbitration or challenge an unenforceable clause, Rogoway Law Group ensures your interests are protected. From agreement drafting to courtroom motion practice, our team has deep experience in California’s arbitration landscape and can guide you through every step.

Contact us today for a complimentary consultation. Let’s discuss your situation and determine the most effective path forward.

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This article was co-authored with research and drafting assistance from Westlaw Precision with CoCounsel.

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Legal Standards for Summary Judgment in California

In California, a Motion for Summary Judgment is governed by Code of Civil Procedure Section 437c. To prevail, the moving party bears the burden of demonstrating that there is no genuine issue as to any material fact and that they are entitled to judgment as a matter of law. This typically involves presenting undisputed evidence that:

• Negates an essential element of the opposing party’s claim or defense.
• Shows that the opposing party cannot produce evidence to prove an essential element of their claim or defense.

The court’s role is not to weigh evidence or determine credibility, but to ascertain whether a triable issue of material fact exists. If even one material fact is genuinely disputed, the motion must be denied.

Procedural Requirements for Filing a Summary Judgment Motion in California

The procedural requirements for a Motion for Summary Judgment in California are strictly enforced. Missing a deadline or failing to comply with formatting rules can lead to dismissal. Key requirements include:

• Timing: The motion must be filed at least 75 days before the scheduled hearing date. Additional days are added for service by mail, fax, or overnight delivery.
• Notice of Motion and Motion: A formal notice specifying the hearing date and time, and the motion itself, clearly stating the grounds for summary judgment.
• Separate Statement of Undisputed Material Facts: This is a critical document. The moving party must present each undisputed material fact, followed by a specific reference to the supporting evidence (e.g., deposition testimony, declarations, discovery responses).
• Supporting Evidence: This includes declarations, affidavits, discovery responses (interrogatories, requests for admission), and excerpts from deposition transcripts. All evidence must be admissible.
• Memorandum of Points and Authorities: A legal brief outlining the arguments and legal authority supporting the motion.

The opposing party then has an opportunity to file an opposition, typically due 14 days before the hearing, which must also include a separate statement responding to each fact and presenting evidence of triable issues.

Strategic Considerations Before Filing a Motion for Summary Judgment

Filing a summary judgment motion is a significant strategic decision in California litigation. Before committing to the substantial investment of time and resources, parties and their legal counsel should meticulously evaluate:

• Strength of Evidence: Is the evidence truly undisputed and overwhelming enough to eliminate all material factual issues?
• Likelihood of Success: Objectively assess the chances of the motion being granted. A weak MSJ can signal a lack of confidence and educate the opposing side about your arguments.
• Impact on Settlement Negotiations: A well-crafted MSJ, even if ultimately denied, can significantly strengthen your negotiating position by demonstrating the weaknesses in the opposing party’s case or the strength of your own.
• Cost-Benefit Analysis: While potentially resolving a case early, preparing and litigating an MSJ is resource-intensive. Weigh the costs against the potential benefits.

Common Reasons California Courts Deny Summary Judgment

Even strong cases can see an MSJ denied. Courts frequently deny motions for the following reasons:

• Credibility Issues: While courts don’t weigh credibility on summary judgment, if the evidence presents conflicting inferences requiring a jury to decide, the motion will be denied.
• Triable Issues of Material Fact: The most common reason. If the court finds even one genuine dispute over a fact essential to the outcome, the motion will be denied.
• Failure to Meet Procedural Requirements: Strict adherence to deadlines, formatting, and the separate statement of undisputed facts is paramount. Any procedural misstep can lead to denial.
• Insufficient Evidence: The moving party fails to present sufficient, admissible evidence to establish the absence of material fact disputes or to negate an element of the opposing claim.
• Overly Broad Motion: Attempting to summarily adjudicate too many issues without clear, distinct factual bases can lead to denial of the entire motion.

Factors That Make the Motion Compelling

A compelling Motion for Summary Judgment stands out. Attorneys can increase the likelihood of success by focusing on:

• Anticipating Opposition: A compelling motion anticipates and addresses potential counter-arguments or perceived factual disputes.
• Clear and Undisputed Facts: The foundation of a strong MSJ. Facts should be meticulously researched, clearly presented, and unequivocally supported by admissible evidence.
• Precise Legal Argument: A well-reasoned and concise legal argument that clearly articulates why the undisputed facts entitle the moving party to judgment as a matter of law.
• Organized Presentation: A clean, well-indexed, and easy-to-navigate motion, separate statement, and evidentiary exhibits assist the court in its review.
• Focus on Essential Elements: Directly attacking or establishing the essential elements of a claim or defense.

Crucial Deadline: Last Date to File the Motion

As mentioned, the deadline for filing an MSJ is 75 days before the scheduled hearing date. It is crucial to mark this deadline in your litigation calendar and work backward to ensure adequate time for preparation, drafting, and service. Failing to meet this deadline will almost certainly result in the motion being rejected or continued, delaying resolution and incurring further costs. Always consult the California Code of Civil Procedure and local court rules for precise calculations, especially concerning methods of service that add additional days to the notice period.

Discovery Best Practices Before Filing an MSJ

Thorough and strategic discovery is the backbone of a successful Motion for Summary Judgment. Before even considering filing, robust discovery practices should include:

• Early and Comprehensive Interrogatories: Pinning down the opposing party’s factual contentions and legal theories.
• Targeted Requests for Production of Documents: Obtaining all relevant documentary evidence.
• Key Depositions: Taking depositions of crucial witnesses to secure admissions, lock in testimony, and uncover facts that establish the absence of material disputes. Expert depositions are particularly vital if expert testimony is central to the case.
• Requests for Admission: A powerful tool to conclusively establish facts that are not genuinely disputed, simplifying the separate statement.
• Expert Witness Disclosure: Ensuring expert testimony is developed and disclosed well in advance if it will support the MSJ.

Effective discovery can proactively eliminate factual disputes, bolster your motion with irrefutable evidence, and uncover critical admissions that strengthen your legal arguments.

Why Hiring a Skilled Litigation Attorney Matters

Navigating the intricacies of a Motion for Summary Judgment in California demands more than just a passing familiarity with the rules. It requires:

• Deep Understanding of California Civil Procedure: Knowledge of the nuanced rules, deadlines, and local court practices.
• Strategic Acumen: The ability to assess the strengths and weaknesses of a case and determine when an MSJ is truly beneficial.
• Meticulous Drafting Skills: Crafting persuasive legal arguments and precise separate statements.
• Evidentiary Prowess: Knowing how to properly present and authenticate evidence to be admissible in court.
• Advocacy: Effectively presenting the motion in court and responding to the opposition.

At Rogoway Law Group, our litigation attorneys understand the nuances of California civil procedure and have extensive experience resolving business disputes through summary judgment and other litigation tools.

Difference Between Motion for Summary Judgment and Motion for Summary Adjudication

While both motions seek to resolve issues without a trial, a Motion for Summary Judgment aims to dispose of the entire case, whereas a Motion for Summary Adjudication targets specific issues or causes of action. Understanding the distinction is vital for determining the appropriate motion to file based on the case’s circumstances.

Final Thoughts: Should You File for Summary Judgment?

Used effectively, a summary judgment motion can streamline litigation, reduce legal fees, and deliver a faster resolution. But it requires meticulous preparation and strategic foresight.

If you’re involved in a business dispute in California and want to know whether summary judgment could benefit your case, contact Rogoway Law Group today. A knowledgeable and experienced attorney can make the difference between a swift resolution and a prolonged courtroom battle.

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This article was co-authored with research and drafting assistance from Westlaw Precision with CoCounsel.

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What Is a Trademark?

A trademark can be any word, phrase, symbol, design, or combination thereof that identifies the source of goods or services. Trademark protection gives the owner the exclusive right (within certain limits) to use the mark in connection with the goods or services it represents.

Trademark vs. Cultivar or Varietal Names

In the context of plant varieties, cultivar and varietal names (such as “Red Delicious” for apples) are not eligible for trademark protection. These names are considered generic descriptors used to identify a type of plant and must remain available for public use.

However, brand names associated with a cultivar or the source of a plant may be eligible for trademark protection. For instance, while any grower can produce mandarin oranges of a certain variety, only the trademark owner of “Cuties®” can market its fruit under that brand name, helping the brand command a premium in the market.

Benefits of Trademark Protection for Plant Businesses

A strong trademark protection strategy includes:

• Selecting a distinctive and protectable trademark
• Registering the trademark with the U.S. Patent and Trademark Office (USPTO)
• Building consumer recognition and goodwill
• Enforcing trademark rights against potential infringers

Federal and State Trademark Protection

Trademarks are protected in the U.S. at both the federal and state levels:

• Federal protection is governed by the Lanham Act (15 U.S.C. §§ 1051 et seq.), administered by the USPTO.
• State protection is available through common law and sometimes by state statute.

Unregistered trademarks (also known as common law trademarks) arise through use in commerce. These rights are geographically limited and harder to enforce. By contrast, federally registered trademarks provide more robust and expansive protection.

Advantages of Federal Trademark Registration

Federal registration of a trademark offers several key benefits:

• Legal presumption of validity and ownership
• Nationwide priority rights
• Eligibility to sue in federal court
• Access to statutory damages for infringement
• Use of the ® symbol
• Incontestability after five years of continuous use
• Eligibility for international trademark filings

The USPTO also allows intent-to-use trademark applications, which enable businesses to reserve rights in a trademark they plan to use in the future.

Why Trademarks Matter for Cultivators, Nurseries, and Seed Businesses

For businesses that sell plants, fruits, seeds, or vegetables, a trademark for plant varieties or branded cultivars helps differentiate their offerings from those of competitors. Trademarks can convey:

• Higher quality or consistency
• Brand recognition and consumer trust
• Commercial value tied to exclusivity and goodwill

For example, a seed bank may sell a popular cannabis or hemp strain under a unique brand name, encouraging customers to seek out the branded product rather than a generic equivalent. Similarly, a nursery could trademark its business name or consumer-facing brand identity to build long-term value.

Get Help with Trademark Protection for Plant Varieties

If you’re a grower, cultivator, nursery, or plant breeder looking to develop and protect trademark rights, the experienced intellectual property attorneys at Rogoway Law Group can help.

Contact us today to learn more about trademark protection strategies that safeguard your plant varieties and build long-term brand value.

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The Plant Variety Protection Act (PVPA) (7 U.S.C. §§ 2321 et seq.) provides legal rights to breeders of new plant varieties. Administered by the Plant Variety Protection Office (PVPO), the PVPA grants a unique form of intellectual property protection for plants that are sexually reproduced (by seed), asexually reproduced, or tuber-propagated.

What Is Plant Variety Protection?

Plant Variety Protection (PVP) grants exclusive commercial rights to breeders who develop varieties that are:

• New
• Distinct
• Uniform
• Stable
• Appropriately named

Once the PVPO confirms that a plant meets these criteria, it may issue a Plant Variety Protection Certificate that provides the breeder with exclusive rights for up to 20 years (25 years for certain types of plants such as trees and vines). These rights allow the breeder to control how the variety is used, sold, or reproduced by others.

Criteria for Plant Variety Protection

To qualify for protection under the PVPA, a plant variety must meet all of the following conditions:

• Distinct: Clearly different from all other publicly known plant varieties. This includes varieties that are in commercial use or described in public literature at the time the application is filed.
• Uniform: Consistent in characteristics, with limited and predictable variation that is commercially acceptable.
• Stable: Maintains its essential traits over repeated propagation or seed generations.
• New: Not previously sold or made available to the public prior to the eligible application window.
• Named: Given a unique and non-misleading name that distinguishes it from other varieties.

Application Requirements

To obtain a Plant Variety Protection Certificate, breeders must submit a detailed application to the PVPO that includes:

• General applicant information, including name of the owner, name of the variety, and the date of first sale, if one exists.
• Evidence that the variety satisfies the five criteria of plant variety protection – (1) the variety must be new, (2) Distinct, (3) Uniform, (4) Stable, and (5) appropriately named. 
• Origin and breeding history of the plant variety
• Statement of distinctiveness, distinguishing the new variety from all known varieties by stating specific differentiating characteristics
• Objective varietal descriptive information, including observable qualitative and quantitative characteristics of the new variety

After filing an application with the Plant Variety Protection Office, the applicant receives provisional protection. This protects the candidate’s plant variety and grants exclusive rights to the applicant, from the date when the plant variety protection application is filed until the date when rights are formally granted. 

Why Plant Breeders Should Pursue PVP

Whether you are developing new cultivars, hybrids, or seed lines, PVP helps safeguard your intellectual property and commercial interests.

For plant breeders, the PVPA offers a powerful tool for protecting and extracting value from newly bred varietals and cultivars. The exclusive rights conferred by a Plant Variety Protection Certificate would enable a business to control how its new varietal or cultivar would be used and sold.  This protection could lead to increased profits, competitive advantages, and a strengthened market position. Businesses could exploit these intellectual property rights commercially through exercising an exclusive right to sell seeds of its protected varietals/cultivars or licensing the rights to others.

Work With a Plant Variety Protection Attorney

If you are interested in learning more, or if you need help securing plant variety protections, please contact the experienced intellectual property attorneys at Rogoway Law Group. We can guide you through the entire application process and ensure your rights are fully protected.

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What is Baga?

Baga is a distinguished red wine grape variety from Portugal that is very common in Bairrada, a Portuguese wine-growing region (Denominação de Origem Controlada or DOC). According to renowned wine authority Jancis Robinson’s “Wine Grapes” (Robinson, J., Harding, J., & Vouillamoz, J. F., 2012), Baga is considered one of Portugal’s most significant indigenous varieties, accounting for over 90% of red grape plantings in its home region of Bairrada.

Key Characteristics of Baga:

Often referred to as the “Portuguese Nebbiolo” by wine critics like Matt Kramer of Wine Spectator, Baga produces wines with distinctive characteristics:

• Small deep ruby to garnet color berries with notably thick skins
• Often compared to Pinot Noir and Nebbiolo in its site sensitivity and complexity
• High natural acidity and  tannin structure contribute to excellent aging potential, often improving for 10-20 years in proper conditions
• Known locally as “berry” or “droplet” (the meaning of “Baga” in Portuguese)
• Officially recognized synonyms include Tinta Bairrada, Tinta Fina, and Tinta Poeirinha

The Approval Process

The TTB maintains strict requirements for grape variety names under 27 CFR 4.23 ³ and 27 CFR 4.93 ², which require:

• Evidence that the grape variety is accepted
• Validation of the grape variety name
• Proof of the variety’s use in winemaking
• Confirmation of its cultivation in the United States

Our legal team at Rogoway Law Group successfully navigated this regulatory process, resulting in Baga’s administrative approval by the TTB.

Current Status and Usage Requirements

With Baga receiving administrative approval from the TTB, wineries can immediately begin using this designation. While the TTB will still conduct a final rulemaking process, they are currently accepting and approving labels with Baga as a varietal designation. Specifically, wineries can:

1. Use “Baga” as a varietal designation when meeting the requirements of 27 CFR 4.23(b)⁴:
   • The wine contains at least 75% Baga grapes
   • The grapes are grown in the labeled appellation of origin
2. Include Baga in multi-varietal wine names with appropriate percentage listings
3. Market their wines to consumers interested in Portuguese varieties

Need Help with Grape Variety Approvals?

At Rogoway Law Group, we specialize in helping wineries navigate TTB regulations and secure approvals for new grape varieties. Our successful petition for Baga demonstrates our expertise in this complex regulatory landscape.

Contact our wine law attorneys today to learn how we can help expand your labeling options and bring new grape varieties to the American wine market.

Note: This blog post reflects the current status of TTB administrative approval for Baga as of February 2025. Final rulemaking may affect these requirements.

Reference

1. Robinson, J., Harding, J., & Vouillamoz, J. F. (2012). Wine Grapes. HarperCollins.
   
2. U.S. Alcohol and Tobacco Tax and Trade Bureau. (2025). 27 CFR §4.93 – Approval of grape variety names. Code of Federal Regulations. Retrieved from https://www.ecfr.gov/current/title-27/chapter-I/subchapter-A/part-4/subpart-J/section-4.93
   
3. U.S. Alcohol and Tobacco Tax and Trade Bureau. (2025). Grape Variety Designations on American Wine Labels. Retrieved from https://www.ttb.gov/regulated-commodities/beverage-alcohol/wine/grape-variety-designations-on-american-wine-labels#administrative_approval
   
4. U.S. Alcohol and Tobacco Tax and Trade Bureau. (2025). 27 CFR §4.23 – Varietal (grape type) labeling. Code of Federal Regulations. Retrieved from https://www.ecfr.gov/current/title-27/chapter-I/subchapter-A/part-4/subpart-C#4.23

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All startups face challenges, but certain recurring issues are especially important to address at the very early stage of a business and throughout the lifecycle of a business.  Breweries must be mindful of labor and employment matters, including how they categorize employees verses independent contractors, having employee policies and handbooks in place, setting out clear duties at the commencement of relationships with service-providers and partners, and performing routine performance evaluations and analysis, as well as maintaining records around departure of service-providers. This blog is part II of Key Legal Considerations for Breweries. Part I focuses on transactional and commercial matters and can be found here.

Important  Labor and Employment Documents for Breweries

Important labor and employment documents in the brewery context include, but are not limited to:

1. Offer letters:

For employees it is important to ensure there is a signed offer letter for each hire. The offer letter should clearly set forth the compensation, benefits, expectations and duties and title of the role for hire. This acts as an important framework for future performance evaluations and the general duties should be made clear at the start of the relationship, as well as the expectations around time commitment/hours (part-time or full-time), reporting, role and any specific milestones or performance conditions for commissions or bonuses, etc. The offer letter should also accompany a confidential information and invention assignment agreement, if applicable (see below), and a written acknowledgment of receipt of, and agreement to comply with, the employee handbook (see below).

2. Employee Handbook:

The employee handbook is a critical guide for the business and business operations, the legal policies and practices of the business and providing to the service-providers what is and is not permissible in the workplace. Often, payroll providers can provide basic employee handbooks under state and federal law. However, the most effective employee handbooks are those that are generally kept up to date with changes in law, are customized to the specific business, and meet all the requirements pursuant to state and federal laws, which are best sourced from a lawyer or a law firm that has a labor and employment practice. These policies and laws are evolving and important to set out clearly so that if there are incidents in the workplace over time, they can be documented accordingly and added to the employer’s human resources records.

3. Required Posters:

Certain labor and employment-related information and posters are required to be made available and posted clearly and conspicuously in the workplace, if applicable to the employer. In Maine, information on certain of these posters can be found on the Maine Department of Labor website,  and these include minimum wage posters, workers compensation information, sexual harassment posters, OSHA posters, and others. Similarly, posters required under federal law, can be found on the U.S. Department of Labor website, and include information on employee rights under the Fair Labor Standards Act, Job Safety and Health posters, Family and Medical Leave Act (FMLA) information, non-discrimination information, among other important information. An employee rights guide for Maine can be found here, that provides details on breaks, overtime, benefits, collective bargaining, privacy, wages, safety and health, paid leave and other information. All of these issues and rights (and processes and procedures for addressing these rights) should additionally be addressed in the employee handbook.

4. Independent Contractor or Consulting Agreements: 

For service-providers who are not employees and instead are independent contractors, it is also crucial to enter into a clear consulting agreement. This agreement should include provisions around the duties and expectations, the term of the relationship, the nature and scope of the relationship as an independent contractor, the compensation, the ownership of inventions or other intellectual property produced by the independent contractor, confidentiality provisions and other details. It is critical that employers understand the difference between an independent contractor and an employee. Regardless of if an agreement provides that someone is an independent contractor instead of an employee (and thus not required to receive certain benefits, minimum wage, overtime and other legal benefits availed to employees), the relationship itself and applicable law will govern whether the service-provider is indeed an employee or independent contractor. 

In Maine the criteria for classification of independent contractors verses employees can be found here and the Maine Department of Labor provides a handy matrix for determining whether the service-provider should be classified as an employee or independent contractor with questions and answers that can be found here. Relevant considerations include whether the individual is free from direction or control of the employer; if the individual has the right to control the means and progress of the work except as to the final results; if the individual is customarily engaged in an independent trade, occupation, profession or business, and other criteria weighing in favor of a finding of an independent contractor relationship. Largely, if the individual is subject to employer control and such person performs work that goes to the heart of the business (rather than being an individual which conducts its own business with its own facilities, tools, instruments, has its own assistants that it pays and hires and controls, doesn’t participate in the profits of the business), then the individual may be considered an employee instead of an independent contractor.  However, this varies from state to state and it should be both documented appropriately in the consulting agreement as well as assessed as a matter of applicable state law.

5. Confidential Information and Invention Assignment Agreement:

The importance of confidential information and invention assignment agreements are often underestimated. All businesses should have forms of these agreements for both employees and independent contractors or include these terms and provisions in an employment agreement or consulting agreement, if not a separate agreement. These documents should contain provisions protecting the business confidential information, trade secrets, processes, formulas, know-how, customer lists, supplier lists, business data, financial information, information regarding personnel, etc. from third party use and disclosure. Most investors or acquirers of a business will want to see there is a diligent database of such agreements maintained for every service provider to the business. These documents are also crucial to protecting the brand, the goodwill, the intellectual property of the company and assigning all rights in and to the proprietary information and intellectual property to the business. Note that these documents can protect the confidential information of the business from being used outside the context of the business. This is especially important given that both state and federal law has moved away from encouraging non-competes outside of the context of a sale or acquisition of a business.

6. Indemnification Agreement for Officers/Founders:

Indemnification agreements are important to put in place for executive officers, founders of a business and brewery operators. These agreements protect individuals who serve the business in the scope of their employment in the general interest of the company from being personally liable for their business activities appropriately performed for the business. Every founder should enter into an indemnification agreement at the commencement of services to the business and the agreement should provide for generally broad indemnification with certain exceptions for illegal or other behavior not in the best interest of the company and indemnification generally in compliance with law, such that if the individual is sued for performing his, her or their job, such individual will have cost and liability protection from the business, including its related insurance policies. Accompanying these documents with proper D&O insurance (Directors and Officers insurance policies) is also of critical importance, among other insurance policies for the business such as general liability and workers compensation policies.

7. Performance Evaluations,  Reviews and Performance Improvement Plans:

In connection with the employment agreements or offer letters in place and the duties required of individual service-providers, it is equally critical to keep a record of performance and compliance and non-compliance with company policies and agreements, as well as all communications between management or Human Resources and such individuals regarding the services provided. By keeping a maintained set of records, if there is a subsequent lawsuit, the business already bolsters its defenses and mitigates liabilities by having a clear paper-trail on expectations, performance history, and proper communication between management and staff.

8. Resignation Letters and Separation Agreements:

It’s similarly important to put in place agreements documenting the end of relationships with service-providers. For example, if someone voluntarily departs the business, it’s a good idea to have a very short letter of resignation in writing (whether it’s via email documenting the end date) or (better) in a short, executed letter documenting the end date, acknowledging the resignation and that all confidential materials and company devices have been returned to the business. If there is an involuntary separation (a termination of the employee not initiated by the employee), it may also be appropriate to prepare a separation and release agreement to document the end of the relationship and release claims between the departing individual and the business, particularly if there is any tension related to the departure. Typically, consideration would be required for a release of claims, other than what the departing individual was already entitled to under its general employment terms.

Conclusion

As you can see, there are steps that can be taken for breweries and other companies to protect and strengthen its workforce pertaining to labor and employment laws. Sometimes it’s a simple as having a handy group of templates and forms that can be customized for each relationship with the help of an attorney or a human-resources professional. Keeping these records greatly reduces the likelihood of liabilities and in any case increases the ability of a business to defend itself in circumstances where it has taken appropriate actions to communicate rights, duties and obligations to its service-providers, as well as to defend against other labor and employment issues. At Rogoway Law Group we can assist you in creating a simple cost-effective framework and set of resources for labor and employment matters so that you can focus on what you do best- moving quality product for the consumer to enjoy.

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All startups face challenges, but some industries experience a more specific subset of issues than others.  Breweries (particularly larger breweries and sometimes midsize breweries) are at increased risk for failure due to market competition, difficulty accessing funding and other specific commercial relationship risks that can impact accounts receivable, access to inventory and movement of product. Additionally, like in every startup, breweries must be mindful of labor and employment matters, including how they categorize employees versus independent contractors, having employee policies and handbooks in place, and setting out clear duties at the commencement of the relationship with service-providers. This blog, however, focuses specifically on transactional issues for breweries and how to bolster your company’s contracts and transactional practices to mitigate commercial and other risks in this competitive landscape.  

Essential Transactional Agreements for Breweries

Examples of transactional agreements that are important for breweries:

1. Ownership and Formation Documents

These documents are crucial for setting up the general structure of the business and ensuring that the business and business owners are property protected from elevated risks common to companies which do not have proper such structural agreements in place. These agreements must set out with clarity how the entity is owned and how it may operate, including the governance and control of the entity; voting matters; potential exit or sale matters; compliance matters and other key issues requiring approvals of the owners. Without this basic framework in place, a business is left too open-ended and disputes are likely to arise if the business parties do not prioritize this at the beginning of the business venture. Once a company becomes successful and time passes, memories fade, and disputes can often happen between even the best business partners if duties, capital contributions, ownership and control is not clearly set out from the start.

2. Intellectual Property and Brand Protection Agreements

It is also crucial at all steps of the way of a business to protect the brand and goodwill being built in the business. Not only should a business make sure it signs contracts with each of their service providers (employees, contractors, other business partners) around intellectual property, confidentiality and invention assignment, but the business should register and enforce its trademarks and protect its trade secrets, formulas, business know-how and similar proprietary interests. Further, in the event of the need to raise money or sell the company, investors and acquirers will want to know that every person who has contributed something of importance to the company has assigned the invention to the company or that the invention is a work for hire, in any case and in each case to be owned exclusively by the company. This includes confidential information and invention assignment agreements to be signed by founders, IP provisions in marketing agreements, IP licensing provisions in commercial agreements, protection of created artwork, logos, promotional and marketing materials, slogans, etc.

3. Commercial Leases

The importance of commercial leases to businesses in general is often underestimated. While commercial leases are typically relatively standard, on standard forms there are some important negotiable provisions that can make the difference between success and failure for a business or that can even reach individual pockets, putting the founder’s own livelihoods at risk (for example, if a founder personally guarantees the rent in a lease). Generally, it’s important to understand the negotiable points and pitfalls. Termination rights are critically important; compliance matters such as if there is a suspension or forfeiture of license to operate should allow for a termination of the lease; and provisions around rent increases, late fees and penalties should be watched carefully, as well as provisions around ownership of improvements and liabilities for conditions on or around the premises. These are only some of the issues to consider that are important in commercial lease agreements.

4. Equipment Purchase and Lease Agreements

It’s important to similarly understand your commercial equipment lease provisions or purchase agreements, including warranties, indemnities, payment structure, late fees, and termination rights. 

5. Supply Agreements

Similarly, supply agreements are important to customize, as necessary and as possible to fit the particular business needs. Additionally, since it’s crucial to have access to necessary supplies and raw materials, parties should consider forecasts, estimates (quantity and frequency of materials needed), delivery provisions, cost provisions, non-conformity remedies, termination provisions, representations and warranties, indemnities and dispute resolution provisions.

6. Distribution Agreements

Distribution agreements for breweries are critical agreements. They are usually long-term relationships and the expectations, duties and remedies for breach must be clear and agreed and compliant with law. The brewery will desire some flexibility if product isn’t moving in the manner hoped for and the distributor will want a more locked-in commitment from the brewery since they invest in the distribution channels and infrastructure. 

In these agreements it’s also critical to understand state laws, such as in Maine, the Certificate of Approval Holder and Maine Wholesale Licensee Act (the “Act”) and how such laws may impact term and termination provisions and the ability to sever the relationship (such laws can vastly limit the ability to terminate the relationship in favor of the distributor).

Other important considerations are transfer provisions, understanding what ‘good cause’ is for allowing for termination under state laws, exclusivity, and other matters. In Maine, under Section 1454 of the Act, “notwithstanding the terms, provisions or conditions of any agreement, no certificate of approval holder may amend, cancel, terminate or refuse to continue or renew any agreement, or cause a wholesale licensee to resign from an agreement, unless good cause can be established or proven for amendment, termination, cancellation, nonrenewal, noncontinuation or causing a resignation.” 

“Good cause” in Maine does not include the sale or purchase of a certificate of approval holder but it does include (and is not limited to):

1. a revocation of the wholesale licensee’s license to do business in the State;
2. bankruptcy or insolvency of the wholesale licensee;
3. assignment for the benefit of creditors or similar disposition of the assets of the wholesale licensee; and
4. failure by the wholesale licensee to substantially comply without reasonable excuse or justification, with any reasonable and material requirement imposed upon the wholesale licensee by the certificate of approval holder.

This is absolutely crucial to know when getting into a relationship with a distributor in Maine, as a specified termination or end date in a contract will not, in most cases, prevail over this provision. For example, see Vacationland Distributors LLC v. Fore River Brewing Company, LLC, where despite the terms of a written contract with an end date for Vacationland Distributors’ services, the Act was determined to require good cause for termination or nonrenewal despite the agreement providing for it to expire by a specified end date.

State and federal laws in many cases will take precedence over what’s in the contract, so it is important to understand the legal framework and scope and address contracts accordingly. Another example of this in Maine is the state law that prohibits dual distributorship.  Section 1453 of the Act provides that a certificate of approval holder that designates a sales territory for which a wholesale licensee is primarily responsible “may not enter into any agreement with any other wholesale licensee for the purpose of establishing an additional agreement for its brand or label in the same territory”.  Additionally, the contact should be clear on what products are bound, whether future product lines will be extended to the agreement, how products should be stored (quality control, temperature, etc.), shipping matters, volume and stock matters, applicable territories, pricing, marketing strategy, brand protection, penalties for non-compliance, etc. Note that the Brewers Association also maintains a database of state laws related to trade laws, direct-to-consumer shipping, franchises and other laws that can be helpful.

Common Considerations in Brewery Agreements

Common important considerations and components of various agreements for breweries include, among other matters, the following:

• Clear expectations between parties setting up the relationship (duties, obligations, payment provisions);
• ABC and TTB regulations and compliance;
• State compliance;
• Term and termination provisions (and including with attention to beer distribution franchise statutes, specifically in Maine, the Certificate of Approval Holder and Maine Wholesale Licensee Act);
• Representations, warranties and indemnities;
• Insurance requirements;
• Risk of loss, transport, and shipping matters;
• Storage and quality control matters;
• Trademark, brand protection and licensing;
• Access to supplies and resources;
• Contractual remedies for breach;
• Force majeure provisions; and
• Dispute resolution provisions.

Conclusion

As you can see, contracts for breweries contain many important and complex terms and provisions and are important at various times in the life cycle of a brewery business. At Rogoway Law Group, we are ready and available to answer any questions you might have, to help you navigate these crucial business relationships and to assist your compliance with applicable laws.

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What is an Alternating Proprietorship?

In an alternating proprietorship relationship, a “host” (the “Host Winery”) and a “tenant” (the “Alternating Proprietor”) share a manufacturing space owned (or leased) by the Host Winery.  In one of its Industry Circulars, the Department of Treasury Alcohol and Tobacco Tax and Trade Bureau (the “TTB”) describes the alternating proprietorship arrangement as “two or more persons or entities taking turns using the same space and equipment to produce wine. In almost all situations, an existing proprietor-owner of a bonded wine premises agrees to rent space and equipment to a new proprietor.”  Essentially, this amounts to a small winery, the Alternating Proprietor, operating within a preexisting winery facility. For the Host Winery, the alternating proprietorship relationship carries the promise of facilitating monetization of excess space and capacity.  

Differences Between Alternating Proprietorship and a Custom Crush Agreement

Unlike the customer in a custom crush arrangement, an Alternating Proprietor is a separately bonded winery and is responsible for its own production, record keeping, recording, labeling and taxes, independent of the Host Winery (also a bonded winery).  This model represents a collaboration of independent bonded wineries, each with responsibility for its own wine making practices and regulatory obligations.  The term “alternating” applies because two or more qualified licensed and bonded proprietors alternate the use of parts of the winery premises, typically crushing and fermentation equipment, bottling equipment and storage.  

Advantages for the Alternating Proprietor

For the Alternating Proprietor, this model offers numerous advantages over both the custom crush arrangement and the stand-alone winery. Compared to a stand-alone winery, the alternating proprietorship structure gives new entrants to the wine industry an opportunity to begin on a small scale without the need to lease or buy an expensive facility and costly equipment. In contrast to a custom crush customer, as an independently licensed winery, the Alternating Proprietor has more control over the wine making process.  With its own federal TTB permits and ABC licenses, an Alternating Proprietor can exert direct control over its supply chain, with the ability to involve itself in retail sales, direct shipping, and wine tasting, in some instances. The Alternating Proprietor must, however, engage in more regulatory compliance than a custom crush customer, owing to its status as a licensed and bonded winery.  

Contractual Nature of the Alternating Proprietorship Relationship

An “Alternating Proprietorship Agreement” (“AP Agreement”), between the Alternating Proprietor and a Host Winery, forms the backbone of the alternating proprietorship structure.  Fundamentally, the AP Agreement must allow the Alternating Proprietor to control portions of the Host Winery’s facility when the Alternating Proprietor is conducting its winemaking.  This causes the AP Agreement to function in certain ways like a lease, rather than a services agreement or another type of commercial agreement. Typically, the Alternating Proprietor would not pay for services based on gallons of wine or cases of wine produced, and the Host Winery would not perform the service of making wine without oversight by the Alternating Proprietor.  Instead, the AP Agreement should establish that the Alternating Proprietor controls the winemaking process, including bottling and storage of wine, as well as management of the business.  The AP Agreement should also allocate risk and liability similar to a landlord/tenant relationship.  In exchange for offering its premises, on an alternating basis, to the Alternating Proprietor, the Host Winery can take a triple-net lease approach that limits its potential liabilities and expenses associated with the winery premises.  AP Agreements often also address use of a Host Winery’s employees by the Alternating Proprietor throughout the winemaking Process, and such an arrangement can be viable in the eyes of the TTB so long as it remains clear that the Alternating Proprietor controls its own winemaking.  

Conclusion

The alternating proprietor relationship represents a key facet of the winemaking industry that provides a symbiotic opportunity for both pre-existing wineries and aspiring industry entrants.  There are, however, complex regulatory and contractual issues to consider.  The experienced wine law attorneys at Rogoway Law Group are here to help!  Please reach out with any questions or if you would like to schedule a complimentary consultation.

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The wine industry is complex, and it takes a significant amount of time, money and skill to produce a high-quality product. One aspect of the industry that has been gaining popularity in recent years is the “Custom Crush” model of business. This structure lets an aspiring wine maker enter the business without a producer’s license and without expending the capital required to develop a stand-alone winery.

Definition of the Custom Crush Relationship

The traditional “Custom Crush” arrangement, based on the historical “Negociant” model from the European wine industry, involves an agreement or formal contract under which a customer pays a wine producer to produce wine to order, after which the customer markets the wine. The “customer”, otherwise known as the “custom crush operator,” does not need to be a bonded winery, nor does it need the state and federal licenses required for fermentation and production of wine. Instead, the custom crush operator participates in the wine industry via a contractual relationship with a bonded “host winery.” This typically results in significantly lower overhead for the custom crush operator, and an additional income stream for the host winery. 

In this arrangement, the custom crush operator typically supplies or purchases grapes or bulk wine, and delivers the product to the licensed and bonded host winery with whom it contracts under a written agreement for custom crush processing, storage, bottling and labeling. The host winery controls the winemaking process and bears responsibility for meeting regulatory requirements, while the custom crush operator may provide winemaking instructions to guide the host winery through the winemaking process, before ultimately marketing the wine. The custom crush operator also must rely upon the production permits and bond of the host winery until the point the wine is bottled, labeled and released as tax paid (or transferred in bond to another bonded premises such as a warehouse).

The terms of the relationship between the custom crush operator and host winery are typically set out in a custom crush agreement (“CCA” or “custom crush agreement”). The CCA represents a crucial component of the custom crush relationship, reflecting the regulatory basis and key terms of the relationship.

Legal Considerations for Custom Crush Agreements

A robust CCA should address the many obligations held by each of the custom crush operator and the host winery. The CCA should document the terms and conditions of the wine-making process and the host winery’s regulatory responsibilities. This includes fermenting, processing, storage, bottling and packaging (including labeling) of wine. It should also address winemaking specifications, fees charged by the host winery, and risk allocation. In many custom crush arrangements, the host winery charges the custom crush operator a fee based on production measured by cases or gallons.

Many CCAs also memorialize the obligations of the host winery to store the wine in bond, maintain all required licenses, comply with all reporting requirements under federal law, and comply with Alcohol and Tobacco Tax and Trade Bureau (“TTB”) requirements for varietals content. CCAs might also address grape supply, either from the custom crush operator (if it has a vineyard) or third parties.

Because the host winery must apply for and obtain the appropriate COLA as the bonded winery, custom crush agreements often also cover intellectual property and branding issues as well. In order to label the wine, and add the custom crush operator’s brand/TTB trade name in the “Bottled By” section of the label, the host winery must add the brand/TTB trade name to its federal Basic Permit. A trademark license from the custom crush operator to the host winery represents one way of memorializing the authorization for the host winery to use the custom crush operator’s intellectual property in this way. This helps protect the custom crush operator’s intellectual property rights and ensure that the custom crush operator accrues the goodwill generated by the brand. Without a written custom crush agreement that addresses intellectual property rights, a custom crush operator risks misuse of its brand, damage to its reputation, dilution of its intellectual property rights, and, potentially, lost revenue.

As a best practice, custom crush agreements should also address the litany of standard terms found in most commercial contracts, such as representations and warranties, duration of the relationship, and dispute resolution.

Conclusion

When creating a custom crush agreement, it’s essential to work with an attorney experienced in wine law. This ensures that the agreement meets all the legal requirements and protects both parties’ interests. A wine law specialist can also provide guidance on state and federal regulations that may apply to the agreement. If you need legal guidance on custom crush agreements or any other legal matters, don’t hesitate to contact Rogoway Law. Our team of experienced wine industry attorneys is here to help. Contact us today to schedule a consultation and learn more about how we can assist you. 

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