By KEVIN MCCALLUM
THE PRESS DEMOCRAT

A legal battle over a state law requiring Napa-labeled wines be made from Napa grapes ended Monday when the U.S. Supreme Court refused to consider a challenge to the law by a wine giant famous for its popular "Two Buck Chuck" brand.

The decision paves the way for California's truth-in-labeling law to be implemented more than five years after it was passed by the Legislature.

It marks the final blow to the long legal fight against the law by maverick winemaker Fred Franzia and his Ceres-based Bronco Wine Co.

"It certainly is the end of this case," said Peter Brody, an attorney for Bronco. "There is nowhere else to go."

The Napa Valley Vintners, the trade group that pushed for the 2000 law and spent an estimated $1.5 million to help defend it, celebrated the decision as a victory for consumers and Napa's wine industry.

"We are absolutely thrilled with the news," said Linda Reiff, executive director of the group. "Now the 2000 law is taking effect in 2006."

State Sen. Wesley Chesbro, the Arcata Democrat who authored the law, also praised the court's decision.

"This is a victory for wine consumers that will provide them with truth in advertising," he said. "If it says Napa on the label, it must be Napa in the bottle."

The 2000 law closed what many saw as a loophole exempting as many as 32 wine brands from federal laws requiring wines using geographic brand names to contain 75 percent grapes from that region.

Under federal law, brands in existence before 1986 were grandfathered, allowing them to continue using geographic place names on their wine labels even if they were made from grapes from other regions.

In Bronco's case, its Napa Ridge, Rutherford Vintners and Napa Creek Winery brands were all being made from cheaper Central Valley grapes. The Rutherford Vintners and Napa Creek brands since have switched to using at least 75 percent Napa grapes, while Napa Ridge continues to be produced using Central Valley grapes, Bronco spokesman Harvey Posert said.

Bronco also produces the popular $1.99 Charles Shaw brand, nicknamed "Two Buck Chuck," sold at Trader Joe's supermarkets.

Napa vintners argued that Bronco, while following the letter of the law, tried to give its wines the impression of being from Napa when they were not, thereby misleading consumers. This included locating a bottling facility in Napa and importing its Central Valley grapes to be crushed in Napa.

"This undercuts the reputation of Napa Valley-grown products while trading on the cache of the renowned wine growing region," Reiff said.

Franzia fought the law because he felt it was singling him out.

"He paid a lot of money for the Napa Ridge brand, and he felt very strongly that this law, which only came up after the transaction, was unfair and targeted at him and it wasn't right, and he wanted to take a stand," Brody said.

The appeal focused on whether a state had the right to restrict a business practice that was specifically allowed under federal law. The California Supreme Court ruled the regulation of alcohol has a long history of overlapping state and federal restrictions. I n August 2004, it concluded the state, in this case, was justified in passing more restrictive rules.

Both the state and U.S. supreme courts rejected Bronco's previous appeals. Bronco's next move remains unclear.

"Bronco Wine Company is disappointed with the Supreme Court's denial of its request to review the state court's erroneous ruling on our claims," Posert said. "Bronco Wine Company, however, intends to maintain all of its brands, and will do so in full compliance with the law."

One option that was raised in legal filings would be to move production of Napa Ridge wines out of California, where the state law would not restrict those wines from being produced with non-Napa grapes, Brody said.

Other options including ceasing production of Napa Ridge entirely or sourcing the wine from Napa grapes.

"I think Fred is considering his options," Posert said.

When and how the 2000 law will be implemented also is unclear. That responsibility will fall to the state Department of Alcoholic Beverage Control, which has not decided how it will act, spokesman John Carr said.

Reiff said she hopes the delays are finally over.

"I think that, since the law was passed 5_ years ago, everyone has been put on notice that this was in process," she said. "Enforcement should take effect immediately."

Copyright © 2006 THE PRESS DEMOCRAT