NEW JERSEY WINERIES ELECT TO INTERVENE IN FEDERAL SUIT

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NEW JERSEY WINERIES ELECT TO INTERVENE IN FEDERAL SUIT
— Retain Sills Cummis & Gross in Suit Affecting Outlets and Sales —

HAMILTON SQUARE, NJ (January 24, 2011) — In response to a federal appellate court decision and on-going litigation that could significantly affect the sale of New Jersey wines throughout the state, New Jersey’s wineries have elected to intervene in the litigation, hiring one of the most prominent law firms in the Garden State for that purpose.

The Garden State Wine Growers Association, representing most of the state’s 39 wineries, has hired Newark-based Sills, Cummis & Gross P.C. to seek to intervene in a proceeding that is about to be conducted in the U.S. District Court. The proceeding was ordered by the Third Circuit Court of Appeals following its decision in Freeman v. Corzine, which held that parts of New Jersey’s alcoholic beverage laws unconstitutionally infringe on interstate commerce by discriminating against out-of-state wineries in the retail sale of wine.

Under the Alcoholic Beverage Control Act, New Jersey wineries have the right to sell wine at retail in a limited number of off-premises tasting rooms and to sell directly to retailers, bypassing the wholesale level of distribution. Out-of-state wine producers must sell only through licensed wholesalers. The Court of Appeals ordered the District Court to choose between two remedies to put New Jersey and out-of-state producers on an equal footing – either directing the state to give out-of-state producers the same rights as New Jersey wineries enjoy to bypass wholesalers, or eliminating the rights now enjoyed by New Jersey producers and ordering all wineries to sell only through wholesalers.

All New Jersey wineries fall below the threshold for a small winery under federal law. Because wholesalers find it uneconomic to handle the products of small wine producers, the ability to bypass wholesale distribution is essential for this small but growing industry to find a market for its products.

Under present law, the industry has virtually doubled its size in the last five years, with winemaking becoming the fastest growing segment of the state’s agricultural economy. New Jersey now ranks seventh in national wine production and last year the state’s wineries won more than 150 international and national awards for its varietal and fruit wines.

Despite their small size, Garden State wineries have been acquiring hundreds of acres of farmland under the state’s Farmland Preservation program creating an emerging agri-tourism industry that has drawn tens of thousands of tourists to the state’s farmland areas in search of award winning wines. A legal decision taking away the present right to sell wine at retail and direct to restaurants and retail merchants would be a grievous setback to the state’s small, independent wine producers.

Given the issues at stake, the wineries said they had little choice but to intervene. They voted unanimously on Wednesday to engage the Commercial Litigation and Appellate Practice Groups

of Sills Cummis & Gross. The firm’s attorneys include Mark Olinsky, Peter Verniero and James Hirschhorn who, in addition to representing clients before trial and appellate courts, have served in various public positions.

“We are hiring Sills Cummis & Gross to help us intervene in the case- to plead our state’s interest in protecting our wine industry. We have hired the best law firm in the state to help us,” said Louis Caracciolo, Chairman of the Board of the Garden State Wine Growers Association and a vineyard owner.
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