No. 99-119
In the Supreme Court of the United States
BRONCO WINE COMPANY, PETITIONER
v.
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS,
ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE RESPONDENTS IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
DAVID W. OGDEN
Acting Assistant Attorney General
MICHAEL JAY SINGER
JOHN S. KOPPEL
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Whether 19 U.S.C. 3512(c) precludes judicial review of petitioner's claim
that 27 C.F.R. 4.39(i) is inconsistent with 15 U.S.C. 1052(a).
In the Supreme Court of the United States
No. 99-119
BRONCO WINE COMPANY, PETITIONER
v.
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS,
ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE RESPONDENTS IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1-4) is unpublished, but
the decision is noted at 168 F.3d 498 (Table). The opinion of the district
court (Supp. Pet. App. 1-19) is reported at 997 F. Supp. 1318.
JURISDICTION
The judgment of the court of appeals was entered on February 11, 1999. The
petition for rehearing was denied on April 13, 1999 (Pet. App. 5). The petition
for a writ of certiorari was filed on July 12, 1999. The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. a. The Federal Alcohol Administration Act (FAAA), 27 U.S.C. 201 et seq.,
makes it unlawful to ship, sell or deliver wine in interstate or foreign
commerce unless such wine is labeled in conformity with Bureau of Alcohol,
Tobacco and Firearms (ATF) regulations designed to prevent consumer deception.
27 U.S.C. 205(e). The statute further declares that no person may bottle
or package wine unless he or she has obtained from ATF a "Certificate
of Label Approval" (COLA), or has obtained a certificate of exemption
after certifying that the bottled wine will be sold only in intrastate commerce.
27 U.S.C. 205(e); 27 C.F.R. 4.50.1
This case concerns ATF regulations regarding wine labels that use geographic
names of "viticultural significance." See 27 C.F.R. 4.39(i)(3).
Beginning in 1978, members of the American wine industry were granted the
right to petition ATF to have select geographical areas designated as areas
of viticultural significance or distinctiveness. The primary purpose of
such a designation is to enable consumers to better identify the origin
of the wines they purchase. See 43 Fed. Reg. 37,672 (1978). When such a
viticultural area is approved by ATF pursuant to 27 C.F.R. Part 9, it may
be used as an appellation of geographic origin on wine labels if "[n]ot
less than 85 percent of the wine is derived from grapes grown within the
boundaries of the viticultural area." 27 C.F.R. 4.25a(e)(3)(ii).2
ATF regulations also prohibit the use of false or misleading information
on wine labels, including misleading geographic brand names. The brand name,
usually the most prominent item on a wine label, conveys significant information
to a consumer. See 51 Fed. Reg. 20,480 (1986). Accordingly, 27 C.F.R. 4.39(i)
provides as follows:
[A] brand name of viticultural significance may not be used unless the wine
meets the appellation of origin requirements for the geographic area named.
Section 4.39(i)(2) also contains a "grandfathering" provision
for COLAs issued prior to July 7, 1986.3
b. In 1994, Congress passed the Uruguay Round Agreements Act of 1994 (the
Uruguay Round Act), Pub. L. No. 103-465, 108 Stat. 4809. Among other things,
the Uruguay Round Act amended the Lanham Act, 15 U.S.C. 1052(a), which governs
federal registration of trademarks. As amended by the Uruguay Round Act,
Section 1052(a) provides in relevant part:
No trade-mark * * * shall be refused registration * * * unless it-(a) Consists
of * * * a geographical indication which, when used on or in connection
with wines or spirits, identifies a place other than the origin of the goods
and is first used on or in connection with wines or spirits by the applicant
on or after [January 1, 1996].
15 U.S.C. 1052(a) (quoted Supp. Pet. App. 8). The Uruguay Round Act, however,
also limits the extent to which private citizens may invoke or rely on its
provisions. In particular, Section 102(c)(1) of the Uruguay Round Act provides:
No person other than the United States -
(A) shall have any cause of action or defense under any of the Uruguay Round
Agreements or by virtue of congressional approval of such an agreement,
or
(B) may challenge, in any action brought under any provision of law, any
action or inaction by any department, agency, or other instrumentality of
the United States, * * * on the ground that such action or inaction is inconsistent
with such agreement.
19 U.S.C. 3512(c)(1).
2. The "Rutherford" area of California's Napa Valley was designated
by ATF as an area of viticultural significance in 1993. See 27 C.F.R. 9.133.
Shortly thereafter, in 1994, petitioner Bronco Wine Company purchased the
"Rutherford Vineyards" brand name.4 Supp. Pet. App. 2. That same
year, ATF approved several COLAs for Rutherford Vineyards brand wine; those
COLAs contained the appellation of origin "Napa Valley" in conjunction
with the varietal designation. Id. at 2-3. Between 1995 and 1996, petitioner's
bottlers submitted at least 11 new COLA applications that were approved
by ATF, with a "California" appellation of origin in lieu of the
earlier "Napa Valley" appellation. Id. at 3. At all relevant times,
as a part of the brand name, the bottles contained reference to "Rutherford,"
a distinct viticultural area and appellation of origin. It is undisputed
that the wine inside the bottle was not made from grapes grown in the Rutherford
region of the Napa Valley and thus did not satisfy the requirements of 27
C.F.R. 4.39(i).
Accordingly, on October 7, 1996, ATF inspectors issued a 72-hour summary
detention order, pursuant to 26 U.S.C. 5311, detaining approximately 32,000
cases of Rutherford Vineyards wine for failure to comply with the labeling
requirements of 27 C.F.R. 4.39(i). Supp. Pet. App. 3. In accordance with
the provisions of 26 U.S.C. 5311, the detention order was lifted at the
end of 72 hours. Supp. Pet. App. 3.
Petitioner filed this civil action in the United States District Court for
the Eastern District of California, seeking declaratory and injunctive relief
and damages. Among other things, petitioner contended that ATF's regulations
concerning the use of geographic brand names of viticultural significance,
27 C.F.R. 4.39(i), is inconsistent with the Lanham Act, 15 U.S.C. 1052(a),
as amended by the Uruguay Round Act. See Supp. Pet. App. 3-4. According
to petitioner, ATF's regulations cannot prohibit the use of misdescriptive
or misleading distinctive viticultural area brand names on wine labels because
Section 1052(a) permits geographically misdescriptive names to be registered
as trademarks where the name was used before January 1, 1996. Petitioner
contends that ATF should have amended its regulations concerning brand names
and areas of viticultural significance to correspond to the amendment to
the trademark law mandated by the Uruguay Round Agreement that Congress
implemented in the Uruguay Round Act.
The district court rejected petitioner's claim. Section 1052(a), the district
court noted, was added to the Lanham Act as part of the Uruguay Round Act.
Supp. Pet. App. 9. Section 102(c) of that Act, 19 U.S.C. 3512(c), specifies
that the Act does not create a right of action or defense against the United
States, or otherwise permit challenges to the actions or inaction of United
States agencies or departments. Ibid. "[T]he portion of the Lanham
Act upon which [petitioner] relies does not provide a private cause of action
against an agency of the United States." Supp. Pet. App. 9. To the
contrary, "[t]he purpose of this provision was to ensure that U.S.
trademark law complied with particular provisions of the Agreement on Trade
Related Aspects of Intellectual Property under the Uruguay Round,"
and it "[l]eft untouched * * * existing provisions of the U.S. law
on geographic names, such as 15 U.S.C. § 1052(e) and the FAAA."
Supp. Pet. App. 9.
The court rejected petitioner's reliance on the Administrative Procedure
Act (APA), 5 U.S.C. 551 et seq., for the cause of action. Although the APA
ordinarily permits individuals adversely affected by agency action to challenge
that action where there is no other adequate means of review, the court
held that "the provision of the Uruguay Round Agreements Act which
strips private plaintiffs of a cause of action trumps the Administrative
Procedure Act's grant of a cause of action." Supp. Pet. App. 10. Accordingly,
the court declined to reach the merits of petitioner's Lanham Act claim.
Ibid.5
4. The court of appeals affirmed in an unpublished memorandum disposition.
Pet. App. 1-4. Invoking 19 U.S.C. 3512(c), the court of appeals held that
"there is no private right of action afforded Bronco for the Lanham
Act claims it asserts in this litigation." Pet. App. 2. The court further
stated that "[l]ikewise, the [APA] cannot be grounds for a Lanham Act
claim because the APA specifically excludes review when a statute precludes
judicial review." Id. at 2-3 (citing 5 U.S.C. 701(a)(1)).
ARGUMENT
Petitioner contends that the Uruguay Round Amendments Act of 1994 does not
preclude it from challenging the Bureau of Alcohol, Tobacco and Firearm's
regulations concerning the use of areas of viticultural significance as
brand names on wine labels, 27 C.F.R. 4.39(i), as inconsistent with the
Uruguay Round Amendments to the Lanham Act. In particular, petitioner claims
that the Administrative Procedure Act (APA), 5 U.S.C. 702, provides it with
a cause of action notwithstanding Section 102(c)(1) of the Uruguay Round
Act, 19 U.S.C. 3512(c)(1).
1. a. Petitioner concedes, as it must, that the APA does not provide a cause
of action for judicial review "if [another] statute" by its terms
"precludes it." Pet. 9. Relying on Abbott Laboratories v. Gardner,
387 U.S. 136 (1967), however, petitioner argues (Pet. 9-10) that "only
upon a showing of 'clear and convincing evidence' of a contrary legislative
intent should the courts restrict access to judicial review." 387 U.S.
at 141.
As this Court has explained, it has never applied that clear and convincing
standard "in the strict evidentiary sense," but rather "has
found the standard met, and the presumption favoring judicial review overcome,
whenever the congressional intent to preclude judicial review is 'fairly
discernible in the statutory scheme.'" Block v. Community Nutrition
Institute, 467 U.S. 340, 350-351 (1984) (quoting Association of Data Processing
Serv. Organizations v. Camp, 397 U.S. 150, 157 (1970)); accord, United States
v. Fausto, 484 U.S. 439, 452 (1988). Indeed, the presumption favoring judicial
review can be "overcome by inferences of intent drawn from the statutory
scheme as a whole." Community Nutrition Institute, 467 U.S. at 349;
Fausto, 484 U.S. at 452.
Here, the courts below found that that presumption was overcome by the clear
text of 19 U.S.C. 3512(c)(1), which states in pertinent part:
No person other than the United States-
(A) shall have any cause of action or defense under any of the Uruguay Round
Agreements or by virtue of congressional approval of such an agreement,
or
(B) may challenge, in any action brought under any provision of law, any
action or inaction by any department, agency, or other instrumentality of
the United States, * * * on the ground that such action or inaction is inconsistent
with such agreement.
As the courts below both held, it is precisely such a forbidden challenge
that petitioner is attempting to make here-i.e., petitioner seeks to utilize
that portion of the Lanham Act enacted as part of the Uruguay Rounds Act
to challenge ATF's "inaction" in not amending its regulations
pertaining to wine labeling and brand names that misleadingly incorporate
an area of viticultural significance, 27 C.F.R. 4.39(i).
Petitioner's attempt to distinguish 19 U.S.C. 3512(c)(1) is not persuasive.
Petitioner concedes that Section 3512(c)(1)(A) expressly bars "private
rights of action" to enforce the Uruguay Round Agreements. But that
barrier to suit, petitioner contends, does not apply to suits for judicial
review under the APA, since the absence of a "private right of action
under the statute challenged" does not preclude the same action from
being brought under the APA. Pet. 10-11. Petitioner, however, ignores half
of Section 3512(c)(1)(A)'s text. Section 3512(c)(1)(A) does not merely prohibit
the recognition of causes of action or defenses "under" the Uruguay
Round Agreements. Instead, it also declares that no individual "shall
have any cause of action or defense * * * by virtue of congressional approval
of" the Uruguay Round Agreements (emphasis added). Manifestly, petitioner's
cause of action-its very claim -arises solely because of (i.e., by virtue
of) congressional approval of the Uruguay Round Agreements. Indeed, absent
Congress's approval of those Agreements in the Uruguay Round Act, the Lanham
Act provision on which petitioner relies would not exist and petitioner
would have no claim at all.6 Because petitioner's claims arise "by
virtue of" Congress's approval of the Uruguay Round Agreements in the
Uruguay Round Act, those claims are barred by Section 3512(c)(1)(A).
Petitioner's suit is likewise precluded by Section 3512(c)(1)(B), which
bars any suit, "under any provision of law," challenging agency
"action or inaction" as inconsistent with the Uruguay Round Agreements.
Seeking to evade the preclusive effect of Section 3512(c)(1)(B), petitioner
argues (Pet 11-14) that it is not challenging ATF's actions as inconsistent
with the Uruguay Round Agreements. Rather, petitioner insists, it is challenging
ATF's action as inconsistent with legislation implementing the Uruguay Round
Agreements. Whatever the merits of distinguishing between the Uruguay Round
Agreements and the legislation implementing those agreements in the context
of Section 3512(c)(1)(B), the distinction cannot help petitioner escape
the scope of Section 3512(c)(1)(A), which bars causes of action "by
virtue of" Congress's "approval" of the Uruguay Round Agreement,
i.e., by virtue of the Uruguay Round Act. Moreover, even with respect to
Section 3512(c)(1)(B), "the provision of the Uruguay Round Agreements
Act which strips private plaintiffs of a cause of action trumps the Administrative
Procedure Act's grant of a cause of action." Supp. Pet. App. 10. See
also 5 U.S.C. 701(a) (APA applies "except to the extent that-(1) statutes
preclude judicial review; or (2) agency action is committed to agency discretion
by law"); Webster v. Doe, 486 U.S. 592, 599-601 (1988) (CIA director's
decision to terminate an employee is not subject to APA challenge on statutory
grounds). Petitioner cannot use the APA as a mechanism for bypassing the
review-precluding provision Congress established in Section 3512(c)(1).
As the district court explained, Section 3512(c) bars private actions relating
to the implementation of the Uruguay Round Agreements on the theory that
ensuring proper implementation of those agreements-because they are agreements
between governments-should be the sole responsibility of the United States
government and not of private persons through judicial processes.
b. Even apart from the preclusion-of-review provisions, petitioner cannot
prevail because its substantive claim lacks merit. Petitioner claims that
ATF regulations, which bar it from using an area of viticultural significance
as its brand name on wine labels if the grapes used in making the wine do
not come from that area, conflicts with the Lanham Act, which permits geographically
misdescriptive brand names to be registered as trademarks. See pp. 5-6,
supra. But the fact that geographically misdescriptive brand names used
before January 1, 1996 are eligible for trademark registration as a general
matter does not mean that ATF's prohibition on the use of a particular sort
of brand name-those referencing areas of viticultural significance and that
thus are especially likely to confuse-in the specific context of wine bottle
labels is invalid.7 To the contrary, the questions of which categories of
brand names are eligible for registration under the Lanham Act for various
uses, and when brand names of viticultural significance can be used on wine
labels in accordance with ATF regulations, are separate issues. As the district
court summarized:
The [Uruguay Round Act amendment to the Lanham Act] addresses the circumstances
under which trademarks may or may not be registered with the Office of Patents
and Trademarks [but] does not impliedly override otherwise valid federal
laws and regulations. Indeed, 19 U.S.C. § 3512(a)(2) makes this point
abundantly clear-it specifically provides that the Agreements and the associated
enabling legislation shall not be "construed . . . to amend or modify
any law of the United States."
Supp. Pet. App. 10.
2. Petitioner, in any event, nowhere argues that the unpublished decision
of the court of appeals creates a conflict in circuit authority. To the
contrary, petitioner acknowledges that this is a case of first impression.
See Pet. 9. Nonetheless, petitioner argues that the case warrants immediate
review in light of the similar preclusion-of-review provision of the North
American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107
Stat. 2057, 19 U.S.C. 3312(c).
To our knowledge, however, no other cases involving either that provision
or 19 U.S.C. 3512(c) have been brought. Moreover, even if such a case were
brought, the unpublished decision of the court of appeals in this case would
not have precedential consequences. See 9th Cir. R. 36-3; Pet. App. 1 n.1.
Because the decision in this case neither creates a conflict in circuit
authority nor raises an issue presently of manifest national importance,
further review is not warranted. See Sup. Ct. R. 10(a) and (c).
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
DAVID W. OGDEN
Acting Assistant Attorney General
MICHAEL JAY SINGER
JOHN S. KOPPEL
Attorneys
SEPTEMBER 1999
1 All persons engaged in the business of producing, blending or bottling
wine must do so pursuant to a "basic permit" issued by the Secretary
of the Treasury, through his delegate, the Director of the Bureau of Alcohol,
Tobacco and Firearms (ATF). 27 U.S.C. 203(b); 27 C.F.R. 1.21. Violation
of the FAAA or its implementing regulations can be grounds for suspension
or revocation of the basic permit. 27 U.S.C. 204.
2 ATF regulations provide that a wine may be labeled with a varietal type
designation (e.g., cabernet sauvignon) only if it is also labeled with an
appellation of origin of the grapes. 27 C.F.R. 4.23(a). In addition to approved
viticultural areas, appellations of origin for American wines include the
United States, a State, a county, or multi-state or multi-county appellations.
27 C.F.R. 4.25a(a).
3 Under the grandfathering provision, a brand name of viticultural significance
may be used if any one of three conditions is met: (1) the wine meets the
85% appellation of origin requirement, 27 C.F.R. 4.39(i)(2)(i); (2) the
wine is labeled in such manner as to identify the actual county or viticultural
area from which the wine is derived and the brand name uses a geographic
area smaller than a State, 27 C.F.R. 4.39(i)(2)(ii); or (3) the wine is
labeled with some other statement that ATF finds sufficient to dispel any
potentially misleading impression of origin that might be created by the
use of an area of viticultural significance in the brand name, 27 C.F.R.
4.39(i)(2)(iii).
4 Because petitioner does not have a pre-July 1986 COLA for the "Rutherford
Vineyards" name, the grandfather clause of 27 C.F.R. 4.39(i) is not
relevant here.
5 The district court also rejected petitioner's claims that ATF's regulation
deprives it of the use of its trade name without due process and that the
three individually-named ATF officials violated petitioner's due process
rights. See Supp. Pet. App. 13- 18. The court of appeals affirmed, Pet.
App. 3-4, and petitioner does not raise any of those claims before this
Court. The district court declined to dismiss petitioner's claim that ATF's
geographical brand name regulation, 27 C.F.R. 4.39(i), is arbitrary and
capricious under the APA, 5 U.S.C. 706(2)(B). Instead of pursuing that claim,
however, petitioner filed a notice of voluntary dismissal of the action
and appealed the district court's dismissal of its other claims. Accordingly,
petitioner's arbitrary and capricious claim is not before this Court either.
6 Only petitioner's claim specifically based on the amended Lanham Act provision
is before this Court. Petitioner voluntarily dismissed its claim that ATF's
regulation is arbitrary and expricious under the APA (see note 5, supra).
7 Brand names that are geographically misdescriptive but do not use an area
of viticultural significance are not addressed by 42 C.F.R. 4.39(i).