On August 23rd the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) struck down federal regulations restricting refunds on export taxes and restricting beer and wine manufacturers greater tax refunds for duties paid on imports. In National Association of Manufacturers v. Department of the Treasury (see ruling here), the Federal Circuit upheld the lower court, the Court of International Trade (“CIT”), and ruled against the U.S. Treasury Department’s revised definition of duty drawback for wine.  Under U.S. tax law, the duty drawback program allows companies to apply for and receive certain tax refunds of excise taxes paid on imported goods. For example, a wine importer and manufacturer could recoup duties paid on 100 bottles of imported wine by exporting 100 bottles of similarly priced wine of the same class/type.

Under a revised 2018 rule, the Treasury Department changed the interpretation of the statutory definition of drawback (19 U.S.C. § 1313(v)) to exclude goods imported and then exported duty-free.  The Treasury Department argued that the current scheme allows wine companies to receive a near total refund of the excise taxes paid on imports. The Treasury Department also argued that other industries could benefit from the same scheme following the liberalization of substitution drawback requirements. The National Association of Manufacturers (“NAM”) and the Beer Institute brought a lawsuit claiming that the interpretation was contrary to law, arbitrary and capricious, and impermissibly retroactive. In January 2020, the CIT ruled that federal regulations could not limit when American companies were eligible for a refund of excise taxes on imports after those companies export similar products. The CIT determined that the intent of Congress was to expand exports at the expense of lost excise tax revenue.

The Federal Circuit affirmed the CIT’s finding that the statutory definition of drawback was unambiguous and thus, inappropriate for administrative interpretation and Chevron deference. The Court noted that drawback is “designed to incentivize exports from the United States and allow U.S. exporters to compete more fairly with overseas competitors.” NAM’s Senior Vice President and General Counsel, Linda Kelly, stated in response to the Federal Court decision, “this program helps manufacturers in America level the playing field when they sell to overseas markets.” Given the above, this court decision will preserve important tax incentives for beer and wine manufacturers and suppliers that export product from the United States.

We have previously blogged about ag-gag laws in general and the Iowa law in particular, the last post about Iowa being on January 3, 2020.  Animal rights groups such a People for the Ethical Treatment of Animals (PETA) or the Animal Legal Defense Fund (ALDF) conduct undercover investigations of farm and ranch properties to uncover incidents of animal abuse.  They often gain access to the property by subterfuge, such as applying for employment without disclosing their true motive. Continue Reading Iowa Ag Gag Law Update

Husch Blackwell Partner Michael Annis and Senior Associate Emily Lyons are slated to provide five On-Demand Webinar Sessions at this year’s Digital Animal Health Summit hosted by the KC Animal Health Corridor on August 24, 2021.

The Digital Animal Health Summit features 1:1 business partnering, on-demand webinars, emerging company presentations and live stream programming with industry leaders. The Summit brings together organizations from within the Kansas City Animal Health Corridor, which is home to more than 300 animal health companies, representing the largest concentration in the world. Continue Reading Lyons & Annis to speak at Digital Animal Health Summit

On June 12, 2020, we blogged about the so-called ag gag law enacted by the Arkansas legislature.  Animal rights organizations such as People for the Ethical Treatment of Animals (PETA) or the Animal Legal Defense Fund (ALDF) often conduct undercover investigations of farms and ranches to uncover abusive practices and publicize them to the world.  A typical method for undercover investigation is to seek employment under false pretenses, then secretly film possible abuses. Continue Reading Arkansas Ag Gag Update

In addition to the regulatory requirements imposed on beer labels, as discussed in the Anatomy of a Beer Label: Part I on COLAs, and the intellectual property protection offered by trademarks, as discussed in the Anatomy of a Beer Label: Part II, brewers may consider the value they can create through trade dress and copyright. Continue Reading Anatomy of a Beer Label: Part III

On April 20, 2020, we blogged about the legal challenge to Montana’s requirement that sellers of cattle must contribute $1.00 per head to Montana’s Beef Council to fund advertisements for beef.  Many sellers would prefer to keep the money and spend it on their own forms of advertising.

As we explained in the previous post, the legitimacy of this requirement depends on whether the government has control over the content of the advertising.  If it does, courts treat the speech as the government’s and there is no First Amendment issue.  If government does not control the content of the advertising, the requirement constitutes compelled speech, which the First Amendment prohibits. Continue Reading Update on Cattle Checkoff

Aside from the regulatory requirements imposed on beer labels, as discussed in the Anatomy of a Beer Label: Part I post on COLAs, brewers should consider protecting the trademarks featured on their beer labels.

Trademarks

Since every brewer has a brand, consumers most commonly encounter brewers’ trademarks in the form of a brand name or logo.  Trademarks serve as source identifiers to distinguish the origin of goods and services and avoid consumer confusion.  Typically, a trademark may be a word, phrase, design, or a combination of such items, though trademarks may also protect sounds, colors, and smells under certain conditions.  For a beer label, trademark law is best suited to protect the brewery name, sub-brand or inventive beer name, and any slogans or logos. Continue Reading Anatomy of a Beer Label: Part II

During the height of the pandemic, most states implemented legislative changes and/or policy modifications for sales of alcoholic beverages for the duration of the state’s declared emergency. As the state of emergency orders are lifted, we are seeing most policies go back to pre-COVID licensing requirements and service restrictions, while some states are taking the opportunity to make some legislative changes and policies permanent. Some changes of note are as follows:

Indiana

  • Growlers and carry out service for certain retail restaurants has been rescinded.
  • Curbside service and delivery to customers in an area adjacent to the licensed premises has been rescinded.
  • Original documents such as tax clearances are once again required and in person hearings have resumed.

Pennsylvania

  • Pre-pandemic food, seating, square footage, and health permit requirements have resumed.
  • Retail licensees permitted to sell beer/brewed beverages and/or wine for off-premises consumption must also make these products available for on-premises consumption.
  • Retail licensees are no longer permitted to sell mixed beverages and bottles of liquor to go.
  • Temporary extensions for outside seating are no longer being processed on an expedited basis, extensions granted are no longer valid and those seeking to continue outside service pursuant to extensions granted during the state of emergency must file an application for extension of premises in the ordinary course.
  • The clock on licenses in safekeeping which was paused during the state of emergency order are restarted.

Virginia

  • The COVID-19 practice of allowing restaurants to continue to sell cocktails to go with a meal has been extended.
  • Nonprofit corporations or fundraisers holding banquet licenses that are authorized to sell wine in closed containers for off-premises consumption can ship wine within Virginia, if they are conducting a fundraiser through an online meeting platform.

For specific questions regarding these are other states changes, please contact Adena Santiago of Husch Blackwell.

A beer label tells consumers more than just what the bottle or can contains (e.g., brewed hops, grain, yeast, and water).  Labels inform consumers of important facts like the alcohol content by volume (ABV) and the net contents of the container, and may also provide insight on the flavor profile of the beer or the ethos of the brewery.  Some beer labels may even constitute works of art.  However, brewers should be aware that certain regulatory requirements apply to beer labels in the United States, and that certain forms of intellectual property can protect different aspects of beer labels.  This post is part of a three-part series, with Part I describing the regulatory requirements for a brewer’s beer label and the authorizations and protections those regulatory requirements confer. Continue Reading Anatomy of a Beer Label: Part I