Gallo Wins Country Vintner Distributor Suit

E.& J. Gallo has won the appeal in which it was sued by North Carolina distributor Country Vintner. The legal battle began in 2009 when Bodegas Esmerelda moved its distribution to the Modesto wine giant.

SUMMARY FROM COURT DOCUMENT:

Bodegas Esmeralda is a foreign winery that produces Alamos, an Argentinean brand of wine. Prior to January 2009, Billington Imports was the primary American importer and source of supply for Alamos in the United States. In July 2005, Billington selected The Country Vintner of North Carolina, LLC as its exclusive North Carolina wholesaler for Alamos.

Bodegas subsequently ended its relationship with Billington and retained E & J Gallo Winery, Inc. as its new importer and primary American source of supply for Alamos. Effective January 1, 2009, Gallo began supplying Alamos to its network of wholesalers in North Carolina, which did not include Country Vintner.

Displeased with this turn of events, Country Vintner first sought administrative relief before the North Carolina Alcoholic Beverage Control Commission (”Commission”), and later sued Gallo in state court. Country Vintner’s complaint asserted three claims under the Wine Act: unlawful termination or failure to renew without notice, unlawful termination or failure to renew without good cause, and illegal dual distributorships. Country Vintner also filed a claim under the North Carolina Unfair and Deceptive Trade Practices Act (”UDTPA”), seeking compensatory and treble damages.

Gallo removed the action to the district court and moved to dismiss. In response, Country Vintner asked the district court to abstain from hearing the case in favor of a North Carolina state court proceeding.

The district court declined to abstain and denied Gallo’s motion to dismiss the Wine Act claims. The court did, however, grant Gallo’s motion to dismiss the UDTPA claim, finding that Gallo’s conduct was at most a violation of the Wine Act that, without more, did not constitute a UDTPA violation.

Following discovery, the parties filed cross-motions for summary judgment on the Wine Act claims. The district court granted summary judgment in Gallo’s favor. Country Vintner timely appealed.

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