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Treasury Wine strikes back at Ste. Michelle, amps up rhetoric – hints at stag vs stag vs stag collusion

For two companies who have said they will agree to mediation, the combatants are still armed, dangerous and seem to be seeing just how many points each can score before the referees call time and ask everyone to behave.

 

In a statement accompanying its latest legal documents filed in Federal District Court yesterday, Dec. 1, Treasury Wine Estates (TWE) characterized Ste. Michelle Wine Estates (SMWE) as a hypocritical bully trying to block market competition with flawed legal tactics. Treasury has also alleged collusion among SMWE, the Stags Leap District Winegrowers Association and at least one Stags Leap winegrower by name (quotes toward end of article).

 

Concerning the “bully” allegations, a TWE spokesperson said:

“Altria and Ste. Michelle Wine Estates’ hypocrisy in this matter is incredulous. They market a brand Hawk Crest, which they label as coming from Stags Leap Wine Cellars and have been doing so for 40 years, in spite of knowing that 90% of the wine in the bottle does not come from the Stags Leap District. We believe this is ultimately a case of a large company trying to engage in bullying tactics to block a competitor.

 

“This is also a classic case of double standards, as Altria and Ste. Michelle Wine Estates have not filed a lawsuit against other Stag wine brands in the market. The obvious example is Silver Stag, which is almost identical to the Ste. Michelle Wine Estates and Altria’s Stags Leap branding – it simply has the Stag pointing in the other direction.”

The Treasury statement followed one TWE filing  to dismiss SMWE’s amended  complaint against Treasury Wine, and a second filing opposing SMWE’s motion to dismiss TWE’s request for declarative relief that their label is legally acceptable.

 

NOTE: Immediately after receiving TWE’s spokesperson comments, we emailed Eric Lent, Ste. Michelle Wine Estates General Counsel for comment. None has been received so far, but we will include any response received.

Summary so far: A blow-by-blow account of the stag versus stag slugfest

  1. As previously reported by Wine Industry Insight, Ste. Michelle sued Treasury in early October alleging trademark infringement and unfair competition, among other charges.
  2. In response, TWE filed a complaint seeking a court declaration that their marketing efforts did not infringe SMWE trademarks.
  3. On Oct. 25, Federal District Court Judge Richard Seeborg dismissed Ste. Michelle’s original complaint against Treasury.
  4. Despite dismissing Ste. Michelle’s complaint, Seeborg allowed TWE’s court filing for declaratory relief to continue.
  5. Seeborg also considered both cases “related” but did not consolidate them. Concurrent with that court meeting, the two sides agreed to mediation.
  6. SMWE reacted by filing an amended complaint against TWE on November 18, hoping to avoid the “fatal flaw” cited by Judge Seeborg in his dismissal of the original complaint.
  7. On Dec. 1, TWE asked the court to dismiss the amended SMWE complaint.
  8. Also on Dec. 1, Treasury filed a motion opposing Ste. Michelle’s request to dismiss TWE’s request for declarative relief.

 

The adversaries are next scheduled to square off in court, Jan. 12, 2017.

Treasury’s 2 filings: Little new facts, mostly procedural

TWE’s two Dec. 1 court filings (links available at the end of this article) mostly reiterate its positions presented in its previous filings and offers its point-by-point counterpoints to those previously presented by SMWE.

 

Most of Treasury’s filings involve complicated issues of court procedure.

 

For example, Ste. Michelle has argued that the court should dismiss Treasury’s request for a judicial determination that their label does not violate trademark or other laws because Treasury never filed a countering response to its initial complaint.

 

However, TWE argues that SMWE’s position is moot because Treasury, instead of filing a counter-argument, filed a successful motion to dismiss Ste. Michelle’s complaint. That, TWE argues, made it unnecessary to file a counter-argument.

 

The dismissal of Ste. Michelle’s original complaint was significant because in cases such as this one — where opposing parties both file lawsuits over basically the same issue — the first filer has a number of procedural court advantages.

 

But TWE asserts that SMWE lost its first filer advantage when their complaint was dismissed, albeit with the court’s permission to re-file. The court will have to decide whether Ste. Michelle’s amended complaint qualifies for first filer status, or whether it is, in fact, a new complaint.

 

Other procedural issues in this case are just as startlingly fascinating and mind-riveting to the non-attorney.

Treasury amps up rhetoric

With the court battle now a mostly procedural one, Treasury Wine Estates has amped up its public criticism of Ste. Michelle Wine Estates and its parent company. The statements from an authorized TWE spokesperson have taken on a sharper edge.

 

According to the Treasury spokesperson:

“We would like Altria, the parent company of cigarette manufacturer Phillip Morris and Ste. Michelle Wine Estates (who own Stag’s Leap Wine Cellars) to explain how The Stag could possibly be confusing consumers, when:

 

“It is an Australian brand by St Huberts winery, which has been associated with imagery of The Stag since 1862 and there is absolutely no link made to Stags’ Leap Winery or The Stags Leap District

 

“Altria and Ste. Michelle Wine Estates’ hypocrisy in this matter is incredulous. They market a brand Hawk Crest, which they label as coming from Stags Leap Wine Cellars and have been doing so for 40 years, in spite of knowing that 90% of the wine in the bottle does not come from the Stags Leap District.

 

“We believe this is ultimately a case of a large company trying to engage in bullying tactics to block a competitor.

 

“This is also a classic case of double standards, as Altria and Ste. Michelle Wine Estates have not filed a lawsuit against other Stag wine brands in the market. The obvious example is Silver Stag, which is almost identical to the Ste. Michelle Wine Estates and Altria’s Stags Leap branding – it simply has the Stag pointing in the other direction.

Collusion? Linkage? Conspiracy?

The Treasury spokesperson also charged that:

It would appear that there is a potential linkage or partial linkage between Altria, Ste. Michelle Wine Estates, Stags Leap District Winegrowers Association (SLWA) and Shafer Vineyards, who appear to be colluding to the detriment of other members of the SLWA.

 

A clear example of this is where SLWA have chosen to speak out against TWE and our plans to launch St Huberts The Stag, but have been silent in any comment on other ‘Stag’ wine brands such as Hawk Crest, owned by Altria and Ste. Michelle Wine Estates.

 

These potential linkages between Altria, Ste. Michelle Wine Estates, SLWA and Shafer vineyards, as well as Hawk Crest should be further investigated.

Full court filings for Wine Executive News Premium subscribers

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