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Were smoke-impacted grapes & wine laundered? Lake County Court Battle Highlights Taint Ambiguities & Winery-Grower Tension

June 24, 2021 | Filed under Featured Articles | Posted by

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Disclosure: The law firm of Dickenson, Peatman & Fogarty which represents Langtry is an advertiser in Wine Business Insight.

Article #1: Grape insurance fraud allegations, smoke taint damages to oak tanks, and the perils of handshake deals play out in Lake County courtroom

As mentioned in the previous article, this court case hinges on whether or not wine and grapes delivered to Langtry Farms by Torick Farms/Hugh Reimers were smoke tainted and — because of that — could have damaged Langtry’s equipment, estimated at $327,135.

 

Complicating the issue are the lack of a written contract between the warring parties and the absence of any independent third-party standards to scientifically define a level of smoke taint that renders grapes unsuitable for wine.

 

A number of wine grape growers (speaking not for attribution for fear of offending winery buyers) say that lack of accepted standards leaves them at the whim of individual wineries some of whom — growers claim — have too much fruit and use smoke taint as an excuse to cancel contracts and reject untainted grapes.

 

Growers and their representatives tell Wine Industry Insight that wineries avoid being specific and are loathe to discuss their mostly un-written rejection procedures for fear that it might make it harder to avoid delivery for other reasons as well.

 

Ambiguities and arguments are particularly acute when — as in this case — so much of the information is verbal.

Three primary players

In this substantially verbal case, there are three primary players:

 

Plaintiff: Langtry Farms and its president, Easton Manson

 

Defendant: Torick Farms and its President Hugh Reimers

 

Possible defendant: Eric Stine, former Vice President of Winemaking for Langtry Farms and associate of Reimers from time at Foley Family Wines. Langtry has asked the Lake County Superior Court to add Stine as a Defendant (Premium Link). In Dec. 2020, Manson fired Stine who has also filed a complaint against Langtry Farms with the California Labor Commissioner over $59,349 in unpaid commissions on wine revenues — some of it from Torick/Reimers.

Stine Says Duckhorn rejected Reimers’ Fruit for taint — But It Was Not Actually Tainted

As described in a declaration by Stine (Premium Link), in September 2020, Torick’s Hugh Reimers delivered a load of Russian River Pinot Noir Grapes to the Langtry crush facility.

 

Stine’s declaration said that that Duckhorn winery had falsely rejected the grapes using smoke taint as an excuse to get out of the contract because Duckhorn had too much fruit.

 

Stine:

“I also told Manson, before Hugh’s Pinot Noir grapes were delivered, that they had been rejected by Duckhorn Winery for smoke taint.

[Redacted. Premium content]

“A buyer’s rejection of grapes does not mean they are smoke tainted; it just means that the buyer does not need those grapes.

[Redacted. Premium content]

The name of the vineyard and location were never revealed. There is no indication that the Pinot Noir grapes Stine states were rejected by Duckhorn.

 

Langtry’s exhibits contain delivery tags that mostly identify the delivery of “Russian River Pinot Noir,” but no specific source.

 

Screen Shot 2021-06-16 at 9.28.33 AM

Some simply identified just as “Pinot Noir”

Screen Shot 2021-06-16 at 9.31.37 AM

Stine’s Declaration continues

[Redacted. Premium content]

Manson accepted my statement [about the Duckhorn rejection of non-tainted grapes] and told me to bring Hugh’s River Pinot Noir from the Russian River vineyard into Langtry.

[Redacted. Premium content]

Reimers Insists no taint

According to Reimers’ declaration (Premium Link):

The claim that Torick’s wine was smoke tainted or damaged Langtry’s tanks is false. In 2020, Torick processed grapes or stored wine at Yokayo Wine Company, Redwood Valley Cellars, Kunde Winery and Meadowcroft Winery, none of whom complained that the grapes or wine were smoke tainted.

However, as alleged by Easton Manson (in his declaration (Premium Link), excerpted further below), those Yokayo/Redwood Valley/Kunde/Meadowcroft products may actually have been all, or partially, from Langtry’s own smoke-tainted grapes sold to Reimers as salvage.

Reimers’ declaration continued (Premium Link):

In August and November 2020, I had the grapes and wine tested by ETS Laboratories, the leading wine laboratory in Napa Valley, for the chemical indicators of smoke taint (guaiacol and 4-methylguaiacol) pre- and post-fermentation.

The pre-fermentation tests showed no detectable smoke taint whatsoever. The post- fermentation tests showed the presence of guaiacol and 4-methylguaiacol at levels well below the sensory threshold.

No complete lab results or chain of evidence

While several mobile phone screen shots (below from Reimers declaration – Premium Link) indicated a lack of taint, Torick did not include complete, signed, lab certified results with any of its filings — as Langtry did (Free link). Also part of two premium documents: Devore-Declaration  (Premium Link) & Hackett Declaration (Premium Link).

[Redacted. Premium content]

 

 

Screen Shot 2021-06-16 at 9.46.34 AM Screen Shot 2021-06-16 at 9.45.48 AM Screen Shot 2021-06-16 at 9.45.31 AM

 

No “Sensory Threshold”

No published scientific data exists that establishes a “sensory threshold” for the compounds Reimers mentions in his declaration.

 

However, the best indications of smoke taint impact levels are discussed in this ETS Labs video (free link) from which the following two frames were captured.

 

Screen Shot 2021-06-20 at 9.08.38 AM Screen Shot 2021-06-20 at 9.30.36 AM

Manson Sells Reimers & Stine Langtry’s Tainted Grapes; They Secretly Launder The Resulting Wine Back To Langtry

According to Manson’s declaration (Premium Link):

[REDACTED

Manson Alleges Stine Concealed Smoke-Tainted Wine & Destroyed Documents.

According to Manson’s declaration (Premium Link):

Mr. Stine concealed this transfer of smoke-tainted wine from me.

After Mr. Stine was terminated, [Redacted. Premium content]

Manson Invoices Reimers After Discovery of Tainted Wine, Equipment Damage.

According to Manson’s declaration (Premium Link):

[REDACTED]

Vague/Nuanced Duckhorn Statement Sheds No Light Untangling This Taint Mystery — Or Any Others

Wine Industry Insight hoped that Duckhorn might be able to shed some light on the alleged rejection and possible association with taint. Specifically, WII asked about whether they had sold the grapes as alleged by Stine, and if so what their taint status might be.

 

Their responses (below) were nuanced, non-committal and lacked any useful information.

 

That experience also led to the question of winery practices when rejecting grapes. Accordingly, WII conducted an informal survey of wineries concerning their procedures dealing with growers when rejecting grapes.

 

Except for two, most replies were vague and not forthcoming.

Jeff Bitter, President of the Allied Grape Growers, told Wine Industry Insight that was to be expected:

A few wineries were trying to get out of contracts prior to the smoke events of 2020 (by erroneously attempting to qualify the pandemic as a “force majeure” event).

Those same buyers then quickly attempted to reject grapes for smoke once the fires broke out.

Some of those attempted contract repudiations took place without even having any objective proof of smoke impact.

There were a lot more good actors than bad, but there were certainly some buyers out there trying to stretch the situation with unreasonable rejection attempts.

Procedures From Transparent Wineries

Our smoke taint procedural benchmark came from Constellation Brands about whom we wrote in a 2019 article on tainted grapes in Mendocino County.

 

A grower there shared (by fuzzy fax) one of her rejection letters sharing Constellation’s transparent procedures, protocols and testing.

 

Screen Shot 2021-06-11 at 4.29.41 PM Screen Shot 2021-06-11 at 4.29.55 PM

We shared that with the wineries surveyed and only one — Vintage Wine Estates — responded quickly and clearly with both the CEO and chief winemaker agreeing that — like Constellation — VWE used “small-batch microfermentation + ETS MassSpec + sensory analysis… with results shared with grower.”

 

Duck Spin – Part 1

Duckhorn, on the other hand, responded with a vague CYA statement from a PR person who took the occasion to salt the statement with self-congratulatory superlatives that failed to address the issue:

“We are not in a position to comment on disputes between third parties. However, we can say that anyone watching our performance in the marketplace can correctly surmise that we need every grape from the 2020 vintage and beyond.

“We take great care and pride in working closely, fairly and transparently with our grower partners, many of whom we have worked with for decades.

“While the unprecedented 2020 harvest put these relationships to the test, we can report that the overwhelming majority of our growers felt we handled the situation with clear and fair standards, and we received many notes of thanks for our proactive and clearly communicated approach.”

Duck Spin – Part 2

After Wine Industry Insight pressed for something substantial — and after sharing the Constellation and Vintage Wine Estates examples — the PR firm sent the following:

“We used a rigorous grape evaluation system that included a combination of lab analysis (both on microferments and berries), organoleptic tasting, and discussions with growers to determine the status of each lot. We accepted the vast majority of our H20 grower fruit.”

“Vast majority” is a nuance that leaves a lot of room to maneuver and dodges the Langtry issue without directly lying.

When asked whether their methods employed mass spectrometer testing and whether growers were allow to have a copy of the findings, Duckhorn failed to reply.

Nuance≠Truth

In addition:”…we need every grape from the 2020 vintage and beyond.” may seem to address the issue, it is a masterful piece of nuance because fails because it appeared to be a substantive reply, but did not answer the questions:

 

  • Did the company reject a load of Pinot Noir from Hugh Reimers?
  • Were the grapes definitively tested for smoke taint?
  • If the load was rejected for smoke taint, was Reimers offered a copy of the evaluation data?

 

Thus, we cannot know whether Duckhorn has a practice of breaking contracts when it as too much fruit (and blaming smoke taint), or whether they rejected the Torick/Reimer’s batch.

 

For more perspective, please see: The truth rarely hides beneath nuance (free link).

Langtry versus Torick versus Langtry: If it’s not in writing, the door’s open for almost anything

Grape contracts are written.

 

Declining a shipment of grapes is an abrogation of that written contract and demands a written reply.

 

The failure to have written contracts can create massive confusion and controversy as our next article on Langtry versus Torick versus Langtry will demonstrate.

Article #3, to come: Put it in writing or face unpleasant consequences

Full Court Document Links For Premium Subscribers

Key documents

These are the key documents (in chronological order filed) that Wine Industry Insight has, as of June 18, 2021.

 

This article, as well as the next two, are based on these.

 

If you want to “read ahead” or simply get more information about a very complicated and confusing case, this is where to go.

 

In addition, if you have relevant, credible, and verifiable information you would like to share (on- or off-the-record), please email Executive Editor Lewis Perdue: lewis.perdue@wineindustryinsight.com.

 

Please do not call by phone. It’s simply too easy to misunderstand verbal communications.

 

Note: links are active only in premium version.