Search Results for: ttb
TTB Lab Closes; Implications for Saké and Flavored Vodka
TTB has closed its lab, according to a TTB Newsletter of yesterday. This further fallout from the pandemic could have a strong and negative impact on saké and flavored vodka imports. Saké and flavored vodka are among the small number of alcohol beverage categories that have been stuck with a lab analysis requirement, during the formula and label review and approval process. TTB said:
In response to state and local stay-at-home orders, and for the safety and protection of our employees in the context of the COVID-19 pandemic, all TTB laboratories are temporarily closed, pending further notice. … Due to these closures, we will not be able to process product samples or paper submissions sent to the laboratories via mail until they reopen. … During the laboratory closures, we are temporarily unable to process formula applications for alcohol beverage products, nonbeverage products, or denatured alcohol that require product samples. We will continue to process formulas that do not require laboratory sample analysis and encourage industry members to submit those formulas electronically in Formulas Online.
Many years ago, TTB mandated lab analysis for a much larger swath of the alcohol beverage industry, including imported vodka, absinthe, and even liqueurs. So far TTB is fairly quiet about what a company should do, if it wishes to seek approval on a new, imported saké or flavored vodka product during the next few months. In our view, TTB should consider allowing the analysis to be held in abeyance for a few months, until things settle down, and base the review on documents submitted by the importer. In the past, TTB would occasionally move forward on labels and formulas as “Approved Pending Analysis,” when there were good reasons. We can’t really think of a better justification than the current and difficult circumstances. The above image shows the policy on imported saké formulas from the recent past, and the below image shows the policy on imported flavored vodka from the recent past.
TTB’s Modernization of Parts 4, 5 and 7 – Top 11 Points
TTB published a beast of a proposal, in late 2018, to radically transform the labeling and advertising rules for most alcohol beverages. On April 2, 2020, TTB published a substantially scaled back version of this proposal, as a final rule. The final rule makes quite a few important changes. The below list attempts to highlight some of the most important changes and observations to the TTB modernization of Parts 4, 5 and 7.
1. The new rules take effect on May 4, 2020.
2. TTB reviewed more than 1,100 comments from concerned parties.
3. The rule changes should not require any label changes and are intended to liberalize or explain.
4. TTB is dropping the proposal to define an “oak barrel” as a “cylindrical oak drum of approximately 50 gallons capacity.” Almost 700 comments opposed this change, and most of them suggested this would stifle innovation and unduly add costs.
5. Rather than require more elaborate statements of composition on distilled spirits specialty products, TTB may go back to considering something like FDA-style ingredient labeling someday in a separate rulemaking.
6. TTB is flexible about what spirits drinks should be recognized as cocktails.
7. TTB no longer sees the need to ban “aged gin.”
8. It’s no longer necessary to act like vodka does not have distinctive taste or aroma.
9. When a whiskey is “straight” or a specific type of whiskey (such as Bourbon Whiskey), it will not be necessary to so indicate.
10. TTB will drop the requirement to submit absinthe, and other products with wormwood, to the TTB Lab to verify a low thujone level.
11. As mentioned near the beginning of this list, the final rule will not require changes to labels, ads, or business practices.
The Federal Register document runs to 23 pages and so there are lots of other liberalizations and clarifications. For example, on the beer front, TTB has decided to stop discouraging use of the term “draft” on most beer labels, saying the term should henceforth be treated as “marketing puffery.” Similary, TTB liberalized away the restrictions on strength claims for beer. So far it seems like TTB has done a good job of modernizing, liberalizing and avoiding massive controversies.
TTB Label Approval Colorado
TTB LABELS (BEER, WINE AND DISTILLED SPIRITS)
We can work with COLAs Online or paper to help get your TTB label approved in Maryland faster and more easily. We have handled tens of thousands of labels via paper and more than 50,000 labels via COLAs Online (we believe few if any other organizations have more approvals via COLAs Online).
In some instances, we can expedite the approval, cutting 2/3 or more compared to the normal wait.
If you need an even faster response, we can review your label under the Quick Check program and let you know the status of your label within a few hours after receipt.
If your label has minor errors here and there, we can help you get a temporary (i.e., use-up) approval when necessary.
Whether you are seeking normal approval, or expedited approval, we will thoroughly review your labels before submitting them to TTB. We are thoroughly familiar with the relevant laws and regulations. If we see problems we will call you right away so you have a chance to fix the labels. In this manner we have saved our clients many unnecessary delays.
If your applications appear to be in good order, we will submit them to TTB within a day of receipt.
For many of the services described on this page, we offer a flat fee which is no more expensive as compared to other organizations offering similar services.
FDA Labeling
Apart from alcohol beverages typically regulated by TTB, we have extensive experience working with food producers and importers to help ensure compliance with FDA regulations for a wide variety of food products.
Top Constitutional Lawyer Says TTB Label Functions Must Be Treated as Essential
We have kept a close watch on the Atlas v. Whitaker case because it’s so close to what we handle on a daily basis whether the government is open or not. We covered the federal shutdown generally on January 12th, here, and we covered the Atlas case 12 days later as here.
Today we have a dialogue with Alan Gura, the famous lawyer handling the Atlas case. Alan is famous for winning the Heller case in the U.S. Supreme Court, and also for winning the Flying Dog beer case (about Raging Bitch as a brand name for beer). Alan has been named among the 100 Most Influential Lawyers in America by the National Law Journal, and “has also argued cases before ten federal courts of appeals and numerous federal district courts throughout the country. … Gura also teaches strategic litigation as an adjunct Professor of Law at Georgetown University, and is proud to have litigated the demise of various unconstitutional statutes and ordinances.” He has served as counsel to the United States Senate Judiciary Committee, and as a Deputy Attorney General for the State of California. He has also worked at a big litigation firm and served as a clerk for a U.S. District Court judge. Earlier this week I sent Alan some questions about the case, by email, and his answers are below in blue print.
What’s the case about?
Under a 1935 law, enacted just after we exited Prohibition, no one can sell an alcoholic beverage in the United States without a government-approved label. The government has to sign off on each label for anything that contains beer, wine, or spirits, to ensure that it contains some information and doesn’t contain certain material. Some of the rules are straightforward, others are up to the government’s sometimes imaginative interpretation. But no label approval, no beverage.
With the shutdown, the Treasury Department office in charge of label approvals, the Alcohol Tobacco Tax and Trade Bureau – TTB – was shuttered. So Atlas Brew Works, like countless other beverage makers, was stuck with product that couldn’t be sold for lack of an approved label. And businesses couldn’t plan their production, because they had no way of knowing when they might get a needed label.
But beer labels are speech. They communicate information to people, and enjoy the First Amendment’s protection. The Supreme Court held as much decades ago, and federal courts do occasionally vindicate the speech rights of brewers who push back against unconstitutional label regulation. The shutdown effectively banned a category of protected speech for no reason. That’s a First Amendment violation. It also imposed a content-based prior restraint on speech, a censorship regime, without a brief, defined amount of time for the government to make its decisions. That’s also a First Amendment violation. Atlas sought the ability to publish its beer labels—and sell its beer—without approval, so long as the TTB is closed and incapable of approving anything.
Is it over?
The request for immediate injunctive relief is over because the shutdown ended, at least for now, and the government approved the most urgently-needed label, the keg collar for Atlas’s apricot-infused “The Precious One” IPA.
But the case is not over. Atlas has other labels in the system awaiting approval—and the government could easily shut down again in three weeks. More to the point, Atlas seeks a declaration of its First Amendment rights in this regard, because these shutdowns are, sadly, the new normal in Washington. We have shutdowns all too often. It’s a recurring issue. It happens with either party in either branch of government, and it can even happen when the same party controls everything. Nobody knows exactly when or why the next shutdown will occur—this time it was about a wall on the Mexican border, last time it was about Obamacare—but it will happen, silencing Atlas again. TTB has a policy of closing during shutdowns, and this isn’t the first time it’s done so. If the Court agrees with us that this situation is “capable of repeating,” it will reach the merits of Atlas’s First Amendment arguments.
What happened at the hearings?
The judge promptly scheduled a hearing on our request for a temporary restraining order. We filed on Tuesday, January 15, and were heard a week later, January 22, immediately after the Martin Luther King holiday weekend. Three days after the hearing, the shutdown finally ended, before the Court ruled. On Monday, with funding in place for at least three weeks, the government promised that it would pass on “The Precious One” application most likely within the next 24 hours. It did so, approving the label yesterday morning. With that label approved and the TTB functioning, the Court denied the request for injunctive relief as moot.
How many lawyers against you?
As far as I can tell, two. But it doesn’t matter. This case has no factual disputes. We don’t need a dozen expert witness depositions and review of a warehouse full of documents. The legal issues are important, and interesting, but they are discreet. It’s always nice to bounce ideas off of colleagues, and I’ve done that here, but there’s no need for anyone to staff up. If that changes, we’ll do that. I’ve done it before. But this isn’t Bleak House.
Did you sue TTB?
No. Atlas has no beef with TTB, and whatever TTB normally does isn’t an issue. The problem is not that TTB was up and running and doing terrible things, the problem is that TTB keeps shutting down. That’s not within TTB’s control. The only defendant here was the Acting Attorney General, in his official capacity. The only relief sought was to prevent the Justice Department from prosecuting Atlas for not having approved labels, if label approval, as a matter of law, does not exist. Note that the Attorney General could have still taken action against Atlas if the labels did, in fact, contain misleading information or failed to carry the required alcohol warning. The only issue was: can Atlas be prosecuted for publishing labels, without an approval that isn’t available? We think the answer to that is fairly straightforward.
What is the goal of this case?
Atlas has two main goals: to establish that Americans cannot be silenced just because the speech-licensing office is closed, and to help Atlas communicate with its consumers about the company’s products.
Is it only about Atlas or labels or beer?
In our legal system, cases are rarely limited to their facts. The concepts established here, one way or another, will be used by other people facing other issues. What those future cases might be, one can never fully tell. The closer the facts of these future cases to this one, the more relevant the precedent might be.
Is a beer label really speech?
Of course. The Supreme Court had no trouble with this concept, and neither have the other courts facing beer label First Amendment disputes. The label is a paper or other image, containing text and graphics, that communicates expression to people. It’s what we call commercial speech; it relates primarily to commercial transactions—here, the buying and selling of beer—but it’s speech all the same. The label expresses the beer’s name, its contents, and all kinds of important and useful information that consumers want to and should know. It also conveys the brewer’s image, its brand, its experience. If all consumer products came in plain brown paper bags with the products’ names typed in courier font, those paper bags would still be speech, though America would be a very different place.
What is the U.S. position?
The government said virtually nothing about the First Amendment. It argued almost exclusively on alleged lack of standing, or failure to exhaust administrative remedies—arguments that simply cannot fly under the circumstances. The government doesn’t have a defense on the merits, because Congress never intended that the labeling office would be unstaffed. They can’t justify something that they never intended to do. The government’s effort will now largely focus on arguing that this will never happen again. We all wish that were true, but it becomes a tougher sell with each passing shutdown.
Did this case make anything easier, for the next shutdown?
Yes. We hope to get a declaratory judgment, to the effect that Atlas cannot be required to obtain unavailable licenses in order to speak. The government would then have the option of determining that this licensing system is so essential to the preservation of human life that TTB’s licensing personnel are essential and cannot be furloughed, but it could not simply ban a category of protected First Amendment speech. In the unfortunate event that we don’t get a declaratory judgment, we’ll be better positioned to file the exact same case on day 1 of the next shutdown, and not on day 25. This issue will have to be decided sooner or later. It’s unavoidable. The best option—for Atlas, for the courts, and for the government—is to resolve this now.
Any other, similar cases about speech jammed up due to Shutdown?
I’m unaware of any—let me know if you have one!—but what we’ve learned about these shutdowns is that they have all kinds of bizarre and harmful unforeseen consequences. We have a highly interconnected and complex society. Pulling random regulatory apples from the middle of the pile, so to speak, can cause all kinds of collapse.
As we all know by now, the federal government did re-open a few days ago. And TTB approved the label at issue yesterday. So the judge mooted a big chunk of the case. But the principles are still under active consideration by the court. I will be more than happy to give equal time to the other side.
Atlas Brew Sues Over the TTB COLA Shutdown
Atlas Brew Works sued the United States on January 15, 2019 in the DC District Court. Atlas is a brewer based in Washington, DC and argued that the law does not allow the government to, at the same time, require a label approval for beer, when the shutdown makes it impossible to obtain such an approval.
As of this writing, Google has 48,600 articles about the controversy, so I will refrain from summarizing the case, or trying to guess who will win. Instead, I will set out some of the juiciest morsels, from the fascinating arguments presented by both sides. On one side is the famous lawyer Alan Gura, representing the beer company. On the other side is the Acting Attorney General Matthew Whitaker and Assistant U.S. Attorney Jason T. Cohen. The judge is the hugely accomplished Christopher R. Cooper.
Atlas’ complaint, filed January 15th, begins:
The First Amendment never “shuts down.” … The [FAA Act] subjects Atlas to criminal penalties should it ship beer with unapproved labels in interstate commerce. But Congress has not enacted legislation funding the issuance of [COLAs] for beer labels at the present time. There is no telling whether or when such legislation might be forthcoming, or how long it might take the government to approve COLA applications should funding for this activity be someday restored.
Atlas does not seek a mandatory injunction to reopen the COLA function. It does not seek the redirection or appropriation of any federal funds. It raises no challenge to the COLA process itself, or to any of the standards the government would apply in licensing beer labels were the government back in the licensing business. Rather, Atlas’s propositions are simple: It cannot be denied the right to speak for lack of meeting an impossible condition. The right to free speech is not a favor that the government affords Americans when political circumstances allow. Moreover, the COLA requirement, a content-based prior restraint on speech, is currently unconstitutional because the licensing authority withholds permission indefinitely. Under these circumstances, the COLA requirement’s enforcement must be enjoined.
Atlas Brew Works expresses itself through the labels it places on cans and kegs containing its beers. … Beer labels are a form of expression protected by the First Amendment.
Atlas’ accompanying memo goes on to assert:
The government can shut down speech regulators. It cannot shut down the First Amendment.
This Court may be unable to solve the political branches’ budgetary standoff, but it remains in the business of securing fundamental rights.
The Government’s memo in support of a motion to dismiss, filed three days later, said:
On December 22, 2018, the Department of the Treasury (including TTB) was partially shut down due to a lapse of appropriations. … As a result, approximately 90 percent of TTB’s employees were placed on furlough, i.e., in a non-work, non-pay status, pursuant to TTB’s shutdown plan … . In accordance with the designated TTB shutdown plan, none of the functions in the Alcohol Labeling and Formulation Division, including reviewing applications for label approval, is considered “excepted.” … Accordingly, all employees assigned to that division were placed on furlough and, in accordance with the Anti-Deficiency Act, must stay away from the work place and may not perform government work. … As of the date of filing of this brief, TTB remains unfunded and its employees thus may not review or process label applications at this time. … Once TTB receives funding, it will resume its review of applications for label approval.
Here, the government argues, there is no real harm to Atlas because: “the statutory and regulatory scheme, which Plaintiff has not challenged, permits Atlas to produce a permissible keg label for “The Precious One” with only minimal changes to the proposed label that it submitted to TTB on December 20, 2018.”
Accordingly, Plaintiff’s activities constitute nothing more than self-inflicted injury, to the extent that Plaintiff has even suffered injury, and fail to establish irreparable harm.
On January 21, 2019, Atlas replied:
Even were Atlas to reconfigure its PRECIOUS ONE can label for keg use, it would still suffer significant First Amendment harm in being unfree to speak as it wishes with respect to this product. Using an undesirable label for one beer alleviates neither the First Amendment injury with respect to that product, nor the First Amendment injuries with respect to all the other products which cannot obtain any label approval at all.
Atlas is principled, but not impractical. Atlas would take whatever action necessary to mitigate its damages—but doing so would not undo the injury to its constitutional rights and the rights of its consumers. Atlas wants to publish its label, designed to communicate with its customers, not some other label designed by government lawyers seeking to avoid an injunction. If the government threatened the Coca Cola Company with prosecution for selling red cans, insisting instead on green cans, the Company might well resort to selling Coke in green cans while it seeks injunctive relief for its First Amendment injury. Likewise, book publishers and movie studios, whose products are inherently expressive, would be heard to object to censorship on First Amendment grounds, even if their primary motivation would be the protection of their commercial interests. But the government cannot censor books and movies, and claim that there is no First Amendment injury because the publisher remains “free” to sell the censored work.
Atlas appreciates that the TTB might want to assist brewers in mitigating the shutdown’s damage. Atlas might well take advantage of Ms. Scalese’s proposal and concoct a rudimentary and unsightly keg label scavenged from its approved can-specific label, lacking Atlas’s trade dress and standing inconsistent with the rest of Atlas’s lineup, if that is what it would take to avoid a complete loss of the beer destined for interstate shipment. But it would not be speaking freely.
People do not injure themselves by speaking in a way subject to censorship. The government injures people by censoring them, whether they remain silent or not. The notion that Atlas has created its own injury, because it requires the ability to speak notwithstanding the speech licensing office’s indefinite closure, cannot be the law.
This case seems to be on a very fast track. The last hearing was two days ago, and it seems like the court could make some decisions any moment. Unless more parts of the government run out of cash first.