Publication of Notice No. 68

On November 8, 2006, TTB published in the Federal Register (71 FR 65432), as Notice No. 68, a notice of proposed rulemaking to establish the ``Tulocay'' American viticultural area in southern Napa County, California. We undertook that action in response to a petition filed by Aaron Pott, a winemaker, and Marshall Newman of Newman Communications, on behalf of vintners and grape growers in the Tulocay region of Napa County, California. As explained in Notice No.68, the proposed Tulocay viticultural area lies entirely within Napa County and also entirely within the existing Napa Valley viticultural area (27 CFR 9.23), which in turn is entirely within the existing, multicounty North Coast viticultural area (27 CFR 9.30). Notice No. 68 invited comments from the public on the proposal, and the comment period closed on January 8, 2007.

Comments Received in Response to Notice No. 68

TTB received 20 comments in response to Notice No. 68 during the comment period. Of those, 8 comments supported the petition and 12 comments requested that the proposed Tulocay
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viticultural area's name be changed to ``Coombsville,'' or ``Coombsville District,'' while maintaining the proposed boundary line. After the close of the comment period, TTB received one comment supporting the petition and two comments opposing the establishment of the proposed Tulocay viticultural area.

Comments Fully in Support

The supportive commenters stated that the Tulocay region is a unique grapegrowing region with different seasonal changes, climatic conditions, topography, soils, and growing season, as compared to the rest of the Napa Valley. Also, one supporting commenter explained that the Tulocay Land Grant is an important part of Napa Valley history. The Napa Valley Vintners Association, in a letter submitted after the close of the comment period, supported the establishment of the Tulocay viticultural area, explaining that its Appellation Committee reviewed the Tulocay viticultural area petition and found it to be comprehensive and deserving of endorsement.

Name Change Comments

Tom Farella, owner of a vineyard and winery located within the proposed Tulocay viticultural area, qualified his support for the proposed viticultural area's establishment by disagreeing with the ``Tulocay'' name and stating a preference for the name ``Coombsville.'' He stated that Coombsville is the common neighborhood description used for real estate, in references to the area by the main local newspaper (the Napa Register), and by the greater local public. Mr. Farella also noted that a recent article in Wine and Spirits magazine referred to the area as Coombsville, and that the Coombsville name ``has been cited in wine books and publications for years.'' He added that the petitioners chose to ignore use of the Coombsville name because they did not like its sound and that they would not discuss the matter when he brought the issue up during informal meetings. Finally, if TTB were to proceed with the name ``Tulocay,'' he strongly endorsed the addition of ``District'' to the name in order to avoid confusion with the long established ``Tulocay'' brand name used by Tulocay Winery. In this regard, he stated, ``Our vineyard and winery are located at the very heart of the proposed viticultural area and I would be disinclined to add simply ``Tulocay'' to our label. I find that it would be very confusing for the consumer to see our brand and Bill Cadman's Tulocay brand on the same label.''

A comment from Michael L. Turner, also expressed a preference for the name ``Coombsville'' or ``Coombsville District'' and included historical information about Nathan Coombs, an early American settler of Napa County regarded as the founder of the city of Napa. Mr. Coombs is memorialized by Coombs Street, located in downtown Napa to the west of the proposed viticultural area boundary line, and by Coombsville Road, which runs east to west through the southern part of the proposed viticultural area. Other commenters supporting the use of the ``Coombsville'' name echoed the comments of Mr. Farella and Mr. Turner regarding the use of the Coombsville name in southern Napa County and Nathan Coombs' role in the settlement of Napa County.

Comments From Tulocay Winery

After the close of the Notice No. 68 public comment period, TTB received a letter from Bill Cadman, the owner of Tulocay Winery, which is located on Coombsville Road in Napa. Noting that he has used the Tulocay brand name since his first vintage in 1975, Mr. Cadman strenuously objected to the establishment of the proposed Tulocay viticultural area since this would cause ``inestimable economic damage'' to a label and wine reputation that he has worked over 30 years to create. Mr. Cadman stated that he grows no grapes, but buys them from independent growers in Napa, Sonoma, Amador, and El Dorado Counties, California. Stating that his Tulocay brand Amador County Zinfandel wine vintages date from 1975 to the present, Mr. Cadman argued that if the proposed Tulocay viticultural area were approved, California State law would then prohibit production of his Tulocay brand name wines from grapes grown outside of Napa County. Mr. Cadman further stated that the State of California could seize and dispose of his Tulocay wines made from nonNapa County grapes and produced after January 1, 2001.

TTB was also contacted by Kristen Techel, attorney for Mr. Cadman, who submitted a memorandum that included additional information in support of Mr. Cadman's assertions. Ms. Techel explained that in August 2004, the California Supreme Court issued an opinion in Bronco Wine Company v. Jolly, 33 Cal. 4th 943 (2004), cert. denied, 544 U.S. 922 (2005), supporting section 25241 of the California Business & Professions Code (CB&PC), which allows the use of specified viticulturally significant names (that is, ``Napa,'' or any viticultural area appellation of origin established under part 9 of the TTB regulations and located entirely within Napa County, or any name similar to the foregoing that is likely to cause confusion as to the origin of the wine) only if at least 75 percent of the wine was derived from grapes grown in Napa County.

Ms. Techel further stated that the Bronco decision made it clear that the Federal grandfather clause (27 CFR 4.39(i)(2)) regarding the use of viticultural area names cannot be used to save Mr. Cadman's Tulocay brand labels which would be in conflict with section 25241 of the CB&PC (that is, Tulocay brand labels that are used on wines, more than 25 percent of which were created from grapes grown outside of Napa County). She asserted that if the Tulocay viticultural area were established by TTB, Tulocay Winery might have to destroy existing wines and stop production of its most popular wines. Ms. Techel then urged TTB to use extreme caution in granting viticultural area petitions within Napa because of the dire effects of this State law.

Ms. Techel also asserted that the Tulocay petition must be rejected because the area described in the petition is known as Coombsville. She stated that local residents most often refer to the area as Coombsville, that local real estate listings generally refer to Coombsville, and that the Napa County General Plan refers to the region within the proposed viticultural area as Coombsville. She also cited articles from the July 2001 issue of Wine Spectator (``Putting Coombsville on the Map for Napa Cabernet'') and from the December 2006 issue of Wine & Spirits Magazine (``The Future of Napa Cabernet'') as evidence that the area is known as Coombsville. She concluded that Coombsville is what the wine industry already calls this area. Analysis of Comments

Name Dispute

The proposed Tulocay viticultural area petition and supporting documentation focused on the Tulocay name as used for a historical land grant, an inuse cemetery, and several other Napa County sites. The Tulocay viticultural area petitioners included an 1859 plat map that labels the area as ``Tulocay Rancho,'' and an 1876 Napa County map which labeled the area as ``Rancho Tulucay.'' Further, a publication, ``The Past is Father of the Present, a Spanish California History and Family Legends 17371973,'' by Viviene Juarez Rose, included the article ``Days of Old on Rancho Tulucay,'' which features personal accounts of
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several members of the Juarez family. However, evidence of the current use of ``Tulocay'' to refer to the proposed area is rather limited. The USGS 1980 photorevised Napa and the 1968 photorevised Mt. George quadrangle maps included with the petition show Tulucay Creek flowing through the proposed viticultural area, and two USGS topographic maps label the general region as ``Tulocay.'' However, TTB conducted research through the online Geographic Names Information System (GNIS) maintained by the USGS, and for ``Tulocay'' there were only three referencesthe cemetery, a creek, and Tulocay Winery. Thus, other than the USGS maps with a reference to Tulocay, there is little evidence that the area in question is currently locally and/or nationally known as ``Tulocay.''

The comments in support of ``Coombsville'' and ``Coombsville District'' include historical references to Nathan Coombs, as well as fairly recent references to the region as ``Coombsville.'' These current references include references in Napa County documents as well as specific references to the area known as ``Coombsville'' appearing in wine related publications. However, TTB's own review of maps of the general area (the Napa Valley Communities map, published in March of 1999 by the American Automobile Association, and the USGS 1980 photorevised Napa and 1968 photorevised Mt. George quadrangle maps) revealed the name ``Coombsville'' only in connection with ``Coombsville Road,'' which runs eastwest in the southern portion of the proposed Tulocay viticultural area. TTB's research through GNIS found no hits for ``Coombsville'' or ``Coombsville District'' anywhere in California.

In sum, the comments received on changing the proposed Tulocay viticultural area's name to ``Coombsville'' or ``Coombsville District'' had some current evidence of the use of the name ``Coombsville'' but lacked sufficient substantiating evidence in the form of map references or GNIS hits to support the use of either of those names for the proposed viticultural area. Further, though the commenters suggest ``Coombsville'' or ``Coombsville District'' would be their preferred name for the proposed viticultural area, it should be noted that TTB has not received a petition proposing the establishment of a viticultural area named ``Coombsville'' or ``Coombsville District''; the petition received by TTB proposed the name ``Tulocay'' as the name of the viticultural area.

In regard to Mr. Farella's comment that the name ``Tulocay District'' should be considered, neither the current Tulocay viticultural area petition nor Mr. Farella's letter contained any documentation or other substantiating evidence in favor of the name ``Tulocay District.'' Further TTB found no hits for ``Tulocay District'' through GNIS.

After careful consideration of all the name evidence, TTB believes that the limited documentation evidencing that the area in question is currently known as Tulocay and the significant number of commenters in favor of the names ``Coombsville'' and ``Coombsville District,'' along with the documentation they included with their comments, cast doubt on the advisability of recognizing ``Tulocay'' standing alone as the name of the petitionedfor viticultural area. In particular, the petition name evidence and the commenters' evidence in support of Coombsville and Coombsville District, taken together, demonstrate a lack of unity among the region's industry members as to what the name of the petitionedfor viticultural area is locally and/or nationally known as, thus drawing into question whether there is, in fact, a viticultural area known as ``Tulocay'' that TTB should recognize in its regulations. Effect on Tulocay Winery

Under the TTB regulations, for a wine to be labeled with a viticultural area name or with a brand name that includes a viticultural area name or other term identified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with the viticultural area name or other viticulturally significant term and that name or term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label.

The TTB regulations in 27 CFR 4.39(i)(2) contain a ``grandfather'' clause exception to the 85 percent rule described above. Under this exception, for brand names used in existing certificates of label approval issued prior to July 7, 1986, the labels may continue to be used even though the brand name includes a viticultural area name or other term of viticultural significance and the wine does not meet the 85 percent rule, provided that:

It is clear that Mr. Cadman's Tulocay wine labels would be ``grandfathered'' under the TTB regulations if the proposed Tulocay viticultural area were established, and, accordingly, he could continue to use those grandfathered ``Tulocay Winery'' labels for TTB purposes provided that the labels meet the requirements of Sec. 4.39(i)(2)(ii) or (iii).

However, based on the terms of section 25241 of the CB&PC and the California State Supreme Court's ruling in the Bronco case that the provisions of the California statute are not preempted by the Sec. 4.39(i) grandfather provision, it is clear that the TTB regulatory provisions would afford no effective label use protection to Tulocay Winery once the proposed Tulocay viticultural area were established. This is because under section 25241(c)(2) of the CB&PC, ``Tulocay'' would be a name of viticultural significance, thus allowing Mr. Cadman to continue to use the name of his winery on his labels only if his wine qualifies for use of the Napa County appellation of origin under Federal regulations (that is, at least 75 percent of the wine must be derived from grapes grown within Napa County). Under section 25241 of the CB&PC, operations in contravention of that provision could result in suspension or revocation of a license and seizure and disposal of the wine by the State of California.

TTB Finding

After careful consideration TTB has determined that it would not be appropriate to proceed with the establishment of the proposed Tulocay American viticultural area for the following reasons:

For the reasons stated above, the proposal to establish the Tulocay viticultural area is withdrawn.

Signed: March 17, 2008.
John J. Manfreda,
Administrator.

Approved: June 13, 2008.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy). [FR Doc. E813858 Filed 61808; 8:45 am]
BILLING CODE 481031P

FOR FURTHER INFORMATION CONTACT N. A. Sutton, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 925 Lakeville St., 158, Petaluma, CA 94952; telephone 4152711254.