Acres of rolling hills covered in fruit-covered vines are an idyllic setting for large gatherings and special events. But, for wineries, there are a host of legal concerns that must be addressed or they could lose their license or even be subject to criminal prosecution.
ARE YOU ALLOWED TO HAVE THE EVENT?
Whether it is a hosted event that is open to the public or a private event, like a wedding or anniversary party, the threshold question is whether the winery is even permitted to hold the event.
Zoning laws vary dramatically, not only state-to-state, but even among cities and counties within a state. Most, however, have some limitation on the number and/or size of special events. Wineries need to know how their jurisdiction defines a “special event” and what restrictions are in place. For example, in Placer County, California, a winery is required to have one parking space for every 2.5 attendees of a promotional event.
In Maryland, for any promotional event after 6 p.m., a winery must file a notice with the Comptroller’s office at least 14 days in advance; only 12 such events per year are permitted. Within Maryland, Montgomery County is more restrictive: only 9 days of events per calendar year in an agricultural zone or two special events in a residential zone. Additional events require conditional use approval by a hearing examiner.
Even within a jurisdiction, different rules may apply to different properties. When a winery first applies for permission to operate at a specific location, it is not uncommon for the local zoning board to negotiate certain restrictions on the property, including the number of events, the maximum number of people at an event, what type of entertainment and/or food may be present, etc.
These zoning laws must be taken seriously. Royal Oaks Vineyard & Winery in Lebanon, Pennsylvania opened for business in June 2017 and soon began holding events such as open mic nights, paint and sip nights, and terrarium parties. Two months later, the North Cornwall Township issued a cease and desist order, contending that the accessory building on the property was only approved to be used for the display and sale of wine. The order forbid the winery from having indoor and outdoor recorded music, live music, open mic nights, terrarium parties, paint and wine nights, private dinner events, or a variety of other activities. Bill Hartmann, the owner of the winery, says he is not even allowed to play a radio inside the building under the order. He is appealing the decision, but it is a lengthy process and in the meantime, the Township’s restrictions are hurting his business. “Most people think we’re closed,” he said.
Limitations in Leases and Deeds
For wineries that do not own their properties, another source of restrictions on events may be their lease. Common terms include the number of events that may be held on the property, the days and times that the events may be held, the number of people allowed to attend, the portion of the property that may be used for the events, etc. Sometimes a landlord will require advance notice and/or the right to approve or disapprove a proposed event. The default clauses in many commercial leases are harsh and wineries would do well to avoid even the appearance of violating the terms to avoid sometimes draconian remedies.
Even for those who own their properties, there may be easements or restrictive covenants that are attached to the land and restrict certain activities. For example, if the winery shares a privately owned access road with other properties, there may be limitations on the number of vehicles allowed on the road. In order to preserve the quiet character of a rural area, a restrictive covenant may prohibit the use of amplified music outdoors. Owners should check their deeds for any limitations that may be in place.
Noise ordinances may be another source of legal trouble. Local rules may govern the number of people allowed to attend an event, whether music is permitted, whether that music may be amplified, the maximum decibel level, and during what hours the event may be held.
Guy Fieri, one of The Food Network’s most famous celebrity chefs, bought a five acre vineyard in Sonoma County, California in 2012. But, when he applied to open a 10,000 case winery and taproom, he met with some unexpected resistance. Even though the application specifically indicated that no amplified music would be involved, the neighborhood was concerned about possible noise, traffic, and the spectacle surrounding the 14 events per year Fieri planned for the space. More than 150 residents attended his zoning hearing to protest his application. In the end, the planning commission voted 5-0 to deny his permit.
Finally, the type of license held by the winery may dictate the kind of events it may hold. For example, in California, holders of a type 02 winegrower’s license may conduct Winemaker’s Dinners or provide food and wine free of charge to consumers at Invitation-Only events, provided certain conditions are met. But, holders of a type 17/20 license (e.g., custom-crush clients) may not conduct these events.
RESPONSIBILITIES AT THE EVENT
Determining that a winery may hold an event is only the beginning. Local laws also dictate who the winery may serve, what it may serve, and what activities are allowed.
Who May Be Served
Once again, these laws are very state and locality-specific. For example, while every state prohibits serving alcohol to a person under the age of 21 or a person who is perceived to be intoxicated, some go much further.
Maryland’s alcoholic beverage code, §6-309(a) provides that a winery “may not allow on-premises consumption or possession of alcoholic beverages by an individual under the age of 21 years, regardless of who purchased or obtained the alcoholic beverages.” The code, therefore, puts an affirmative duty on the licensee to monitor alcohol consumption on the entire property, not just the taproom. This can be challenging for wineries with large grounds where people tend to picnic.
Virginia Code §4.1-304.A. prohibits the sale of alcoholic beverages to a person the licensee knows or has reason to believe is interdicted. Interdiction is a legal process in which the Commonwealth declares a person to be a “habitual drunkard” or convicted of driving under the influence. Tennessee Code §57-4-203(c)(1) prohibits selling or furnishing any alcoholic beverage to a person who is “known to be insane or mentally defective” or to any person who is “known to habitually drink alcoholic beverages to excess, or …known to be an habitual user of narcotics.” Violation of this law is a criminal misdemeanor.
What May Be Served
In order to draw a broader customer base, wineries will sometimes serve drinks other than the wine they produce. Here too, the winery must be cautious. California Code §23358(5)(b) allows a winery to serve to guests at a private event not open to the public, wines, beers, and brandies, regardless of source, so long as those products not produced by or for the winery are purchased by the winery from a licensed wholesaler. In New York, the Alcoholic Beverage Control Law §76 allows a winery to sell wines manufactured by the licensee or “any New York state labelled wine.”
Maryland alcoholic beverage Code §6-308(b) provides that the “license holder may not allow an individual to consume on the licensed premises an alcoholic beverage that is not purchased on the premises from the license holder.” Thus, if a wedding party wants to have a champagne toast or wants to serve wine not produced by the host winery to its guests, the licensee must purchase the wine from a licensed wholesaler and sell it to the wedding party. This law can also be tricky with regard to picnickers. Though quite rude, it is not uncommon for people bringing a picnic lunch to a winery to bring an outside wine with them. If a Maryland winery allows this practice, it is in violation of the law.
What Activities Are Allowed
As noted above, many local laws govern the use of live music or the number of people attending an event. But, there are many other laws dealing with very specific issues of which the winery must be aware. New York’s alcoholic beverage control law §106, for example, goes into fairly graphic detail about parts of the human body that a winery may not allow customers to display on the premises. That same section of New York law also provides that “[n]o retail licensee for on-premises consumption shall suffer or permit any contest or promotion which endangers the health, safety, and welfare of any person with dwarfism.” While these laws may seem obscure, the fact is that a winery has to ask a lot of questions of guests looking to book private events.
Because state laws vary so significantly, it would be impossible to identify every legal hurdle faced by wineries that host special events. But, the issues discussed above should get owners thinking about the types of issues they may need to address. For advice relating to a specific situation, consultation with an attorney is strongly recommended. Part 2 of this article, which will appear in the July/August 2018 issue, will discuss various types of events and the legal issues they raise.
Brian Kaider is a principal of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation.