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Beverage Trade Network

Stag battle: Ste. Michelle asks court to dismiss Treasury Wine declarative relief request

CORRECTION: In a previous version of this article, Wine Industry Insight stated that Federal District Court Judge Richard Seeborg had combined the cases. That was incorrect.

Judge Seeborg adjudged both cases as related but did not consolidate them, thus allowing the Treasury’s request for declaratory relief to remain open. 

To the non-lawyer, this may seem like a difference without a distinction, but has significant implications for  judicial rules on how cases should be treated. We regret this error.


 

Ste. Michelle Wine Estates, (SMWE) has asked a San Francisco federal court to dismiss Treasury Wine Estates’s (TWE) request for declaratory relief that its planned use of “Stag” as a brand does not infringe trademarks or other laws.

As previously reported by Wine Industry Insight, Ste. Michelle sued TWE in early October alleging trademark infringement and unfair competition among other charges. In response, TWE filed a complaint seeking a court declaration that their marketing efforts did not infringe SMWE trademarks.

On Oct. 25, Federal District Court Judge Richard Seeborg dismissed Ste. Michelle’s original Treasury Wine complaint.

SMWE reacted by filing an amended complaint against TWE on November 18, reasserting the same basic claims but without the “fatal flaw” cited by Judge Seeborg in his dismissal.

Ste. Michelle’s filing to dismiss contends that the judge’s decision to combine both cases means that TWE’s complaint for declaratory relief is inappropriate because it is nothing more than a counterclaim to the amended motion filed by SMWE on Nov. 18.

In its request to dismiss TWE’s declaratory relief complaint, SMWE said ,

TWE’s claims for declaratory relief are clearly based on its use of the same name and labels at issue in the First Court Action, to which both TWE and Ste. Michelle are parties.

“Indeed, the claims in both cases are so similar that they are essentially two sides of the same coin—Ste. Michelle has asserted affirmative claims for relief in the First Court Action, and TWE has asserted the exact same claims for declaratory relief in this case.

“Under these circumstances, there can be no doubt that “the essential facts of the various claims are so logically connected that considerations of judicial economy and fairness dictate that all the issues should be resolved in one lawsuit.” Pochiro, 827 F.2d at 1249.

“The Court should therefore dismiss the DJ Complaint because TWE’s claims are, if anything, compulsory counterclaims in the First Court Action.”

TWE: No Comment

Asked by Wine Industry Insight if Treasury Wine Estates planned to contest the dismissal request, a spokesperson said, “We have no comment on this matter at this time.”

Hearing Set

A hearing has been set for Dec. 22. According to a previous agreement, the two parties are supposed to be in mediation by this time.

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