California State Controller weighs in on Napa winery dispute

In a letter shared with the drinks business, Malia Cohen, California State Controller, has demanded an explanation from Napa County as to why it is attempting to withdraw the right to hold tastings from three local wineries.

In November, db reported that three Napa wineries had filed a federal complaint against Napa County for “violating their civil rights” in being prevented from holding tastings on-site.

Hoopes Vineyard (formerly Hopper Creek Winery), Summit Lake Vineyards and Smith-Madrone Vineyards & Winery say they are legally entitled to hold tastings and tours of their estates because they had permits in place long before a law was passed in 1990, designed to limit tourist numbers in Napa.

Lindsay Hoopes, the owner of Hoopes Vineyard, says that Napa County is “taking away substantial property rights that we have invested in for decades”, which she claims “is a constitutional violation of the civil rights act.”

Hoopes, a former legal prosecutor, also accused Napa County of “a pattern and practice of discriminating against specific classes of landowners and small business owners.”

Napa County attorney Arthur Hartinger issued the following statement: “A use permit exemption does not allow for tours, tastings or consuming wine on the premises. The prior owner, called Hopper Creek winery, only possessed the use permit exemption and that is what Hoopes purchased.”

Now Hoopes’ plight has been picked up by California State Controller, Malia Cohen, who is responsible for protecting the financial resources of the state of California.

Controller Cohen independently audits government agencies that spend state funds and safeguards many types of property until claimed by their rightful owners.

Stern letter

In a letter shared with the drinks business, written on 18 December and addressed to Napa County Supervisor Belia Ramos, Cohen expressed her dismay over the continued persecution of the wineries and demanded an explanation as to why they are not legally permitted to hold tastings.

“I write today as a strong supporter of small business, the Chair of the Franchise Tax Board and Controller of the State of California,” the official letter begins.

“After seeing various media reports, I am writing to request some information as to how a winery that has been paying taxes on wine poured at their property for 40 years was only recently found to have been illegally serving wine.”

Cohen goes on to write that according to her office’s own internal investigation, Hopper Creek “has a state permit that allows them to serve alcohol on the premises. It’s our understanding that such permits are only issued if a winery has the local entitlements necessary to operate a business that serves alcohol.”

In her letter Cohen cites the Business and Professions Code Section 23558, which allows licensed winegrowers to “sell wine to consumers for consumption on the premises” and enables local authorities to “restrict but not eliminate” such activities.

“I am hoping for some clarification as to what may have changed in terms of their entitlements that has ended their ability to lawfully sell wine”.

“I am concerned as to how the state and county could have been collecting taxes from a small business for so many years for wine sold on the property, when allegedly it was not allowed to do so.”

“I am also concerned as to how they were able to secure a permit to sell alcohol if local land use regulations purportedly did not permit such activity”.

Concluding her letter California State Controller Cohen asserts that: “If Hoopes Vineyard and the other two wineries have been operating in error for nearly half a century there are changes that need to be made at the local and state level to prevent this problem from repeating itself.”

“Alternatively, if the government is violating these wineries’ constitutional rights as they allege, that, too, requires leaders at both the local and state level to stand up to protect a lawfully operating small business”.

A trial between the three wineries and Napa County is slated for early next year.