Opinion ID: 2597548
Heading Depth: 3
Heading Rank: 1

Heading: Whether Congress, when it enacted the FAA Act in 1935, intended to preempt state wine labeling regulation

Text: As explained below, contrary to Bronco's assertions the history of the 1935 FAA Act discloses no intent on the part of Congress to supplant or preempt state efforts to regulate wine labeling. In late August 1935, Congress replaced the defunct FAC Administration with the Federal Alcohol Administration Act. (Pub.L. No. 74-401 (Aug. 29, 1935) 49 Stat. 977, presently 27 U.S.C. § 201 et seq.) The essential aspects of the FAA Act exist today in substantially unamended form and remain the basis for federal regulation of wine labeling. (See Benson, Regulation of American Wine Labeling: In Vino Veritas? (1978) 11 U.C. Davis L.Rev. 115, 154 et seq. ( Regulation of American Wine Labeling ).) Substantively, the FAA Act in large measure emulated the main aspects of the invalidated FAC Administration. (After Repeal, supra, at p. 32; Regulation of American Wine Labeling, supra, 11 U.C. Davis L.Rev. 115, 165.) The FAA Act makes it illegal for any person to produce, sell, or ship wine in interstate or foreign commerce unless that person is licensed to do so by the Secretary of the Treasury. [43] (27 U.S.C. § 203(a) & (b).) Title 27 United States Code section 205(e)the primary federal statutory provision for present purposes  directs the Secretary of the Treasury to promulgate such regulations with respect to packaging, marking, branding, and labeling . . . (1) as will prohibit deception of the consumer with respect to [ alcoholic beverage ] products . . . .; [and] (2) as will provide the consumer with adequate information as to the identity and quality of the products . . . . (Italics added.) To enforce these requirements, this section of the FAA Act also requires that any person who sells or ships wine in interstate or foreign commerce first obtain from the Secretary of the Treasury (or his or her designee) a certificate of label approval, or COLA, for each wine, and directs that no wine may be shipped or sold in interstate commerce unless it bears a label that has been reviewed and approved by the Secretary of the Treasury through issuance of a COLA. Finally, the section further provides that no wine label may be removed or altered except as authorized by Federal law or except pursuant to federal regulations authorizing relabeling for purposes of compliance with the requirements of this subsection or of State law. ( Ibid. ) Testifying in support of the legislation that became the FAA Act, Joseph H. Choate, former Chairman of the FAC Administration, explained that the goal was to continue the work of the recently invalidated FAC Administration. Adverting to the regulations mentioned above that recently had been adopted by the FAC Administration ( ante, pt. II.B.1.f), Mr. Choate explained that the purpose of those regulations  and of the new FAA Act  was to to provide such regulations, not laid down in statute, so as to be inflexible, but laid down under the guidance of Congress, under general principles, by a body which could change them as changes were found necessary. [¶] These regulations were intended to insure that the purchaser should get what he thought he was getting, that the representations both on labels and in advertising should be honest and straightforward and truthful . . . . [ The consumer ] should be told what was in the bottle, and all the important factors which were of interest to him about what was in the bottle.  (Hearings before House Com. on Ways and Means on H.R. No. 8539, 74th Cong., 1st Sess., p. 10 (1935), testimony of Joseph H. Choate, italics added.) Similarly, Representative Thomas Cullen of New York, the author of the bill that became the FAA Act (see 79 Cong. Rec. (1935) 11713 et seq.), promoting his legislation on the floor of the House, asserted that the proposed bill was necessary in order to do something to prevent the unfair trade activities of those in the industry who chisel and take advantage of the ignorance of the consumer by dishonest labeling . . . . (Remarks of Rep. Cullen on H.R. No. 8539, 74th Cong., 1st Sess., 79 Cong. Rec. (1935) 11714; see generally Regulation of American Wine Labeling, supra, 11 U.C. Davis L.Rev. 115, 165-167.) As with the 1906 federal Pure Food and Drugs Act, and by contrast to other legislation passed only days prior to adoption of the FAA Act in August 1935, [44] nothing in the body of the FAA Act reveals congressional intent to supersede concurrent (or more stringent) regulation of wine labeling by the states under their traditional police powers. As already explained, at the time Congress adopted the FAA Act in August 1935, the states, led by California (see ante, pt. II.B.1.d & e), were continuing to exercise their traditional police powers in this area. (See ante, pt. II.B.1.g, describing the then extant statutes of various states.) Consistently with this history and contemporaneous practice, the bill's author, Representative Cullen, while promoting the bill embodying the FAA Act on the floor of the House, emphasized the cooperative, as opposed to preemptive, nature of the federal legislation. He asserted: [W]e must do something to supplement legislation by the States to carry out their own policies. The liquor industry is too big and the constitutional and practical limitations on the States are so considerable that they alone cannot do the whole job.  (Remarks of Rep. Cullen on H.R. No. 8539, 74th Cong., 1st Sess., 79 Cong. Rec. (1935) 11714, italics added; accord, H.R.Rep. No. 1542, 74th Cong., 1st Sess., pp. 2-3 (1935).) [45] Representative Cullen also assured the House that by enactment of the bill, [n]o power is taken away from the States to provide such safeguards as they deem best for their own protection. (79 Cong. Rec., supra, 11174.) [46] Based upon this legislative history, and in light of the backdrop against which Congress acted  the prior decades of state legislation regulating the labeling or misbranding of wine as a general food and beverage product, or of wine specifically  we conclude that Bronco has failed to establish that Congress, at the time it enacted the FAA Act, acted with the clear or manifest purpose of preempting state statutes regulating wine labels.