BRONCO WINE COMPANY et al., Petitioners, v. JERRY R. JOLLY, as Director, etc., et al., Respondents; NAPA VALLEY VINTNERS ASSOCIATION, Intervener, 33 Cal. 4th 943

Opinion GEORGE, C. J. This case concerns three brand-name labels (Napa Ridge, Napa Creek Winery, and Rutherford Vintners) appearing on wine bottled and marketed by petitioners Bronco Wine Company and Barrel Ten Quarter Circle, Inc. (hereafter Bronco). These wines are made not from grapes grown in Napa County, or in the Rutherford viticultural (wine grape growing) region of Napa County, but instead from grapes grown in areas far from Napa, such as Stanislaus County and the environs of the City of Lodi—areas where the cost of grapes, and often their perceived quality as well, is considerably lower.

The challenged bottle labels have been approved by the federal agency charged by Congress with enforcing federal labeling law but violate a four-year-old California wine labeling statute, which requires that, when the word “Napa” (or any federally recognized viticultural region within Napa County) appears on a brand label, at least 75 percent of the grapes used to make that wine must be from Napa County. (Bus. & Prof. Code, § 25241 (hereafter

section 25241).) We granted review to consider the Court of Appeal’s conclusion that federal law preempts the state law. We conclude that the state labeling statute is not preempted by federal law and hence that the judgment rendered by the Court of Appeal must be reversed. I. Bronco asserts that it specializes in “premium wines at affordable prices.” Some of Bronco’s wine is bottled at its facilities in Ceres (near Modesto, in Stanislaus County) and in Sonoma County; other Bronco wines are bottled by petitioner Barrel Ten Quarter Circle, Inc., at a recently completed facility in the City of Napa, in Napa County.

The latter plant is capable of producing approximately 18 million 12-bottle cases per year—output that would be more than double the current annual production of Napa-grown wines. Bronco sells wines under approximately 30 labels or brand names. A representative label for the three challenged brand names (Napa Ridge, Napa Creek Winery, and Rutherford Vintners) is set forth in the appendix.

As can be seen, with regard to the representative Napa Ridge label, the label lists (in smaller lettering and below the brand name) the “designation” of the wine (the varietal name White Merlot), followed underneath by the “appellation of origin”—the geographic source of the grapes (Lodi). The representative Napa Creek Winery label lists (in smaller lettering and below the brand name) the appellation of origin (Lodi), followed underneath by the varietal name (Chardonnay).

The representative Rutherford Vintners label lists (in smaller lettering and below the brand name) the appellation of origin (Stanislaus County), followed underneath by the varietal name (Merlot). The “back label” of each states that the wine was “vinted and bottled” by the named winery in “Napa, CA” or in “Napa, California.” In addition, many of the Napa Ridge wines include the word “Napa” on bottleneck collars, and some include that word on branded corks. Bronco acquired these three brand names, and the right to use these labels, from predecessor owners of wineries located in Napa County.

The Napa Ridge brand, which Bronco acquired in January 2000 from Beringer Wine Estates for more than $40 million, had been in use since the early 1980s. The Napa Creek Winery brand, introduced in 1981, was acquired by Bronco in 1993. The Rutherford Vintners brand originated in the early 1970s, and was acquired by Bronco in 1994. The prior owner of the Napa Ridge brand had used that name and label for wines made from grapes grown in California’s Central Coast, North Coast, and Lodi appellation areas, as well as from Napa County.

All of the wines previously marketed by the prior owner under the Napa Creek Winery brand and most wines previously marketed by the prior owner under the Rutherford Vintners brand had been made from Napa County grapes. Under Bronco’s ownership, all three of these brands have been used almost exclusively to sell wines made from grapes grown outside Napa County. The bill that became

section 25241 was introduced in the California Legislature in February 2000 (Assem. Bill No. 683 (1999-2000 Reg. Sess.)). After receiving substantial public comment and holding hearings, the Legislature found: “(a)(1) . . . [F]or more than a century, Napa Valley and Napa County have been widely recognized for producing grapes and wine of the highest quality. Both consumers and the wine industry understand the name Napa County and the viticultural area appellations of origin contained within Napa County (collectively ‘Napa appellations’) as denoting that the wine was created with the distinctive grapes grown in Napa County. Q]

(2) The Legislature finds, however, that certain producers are using Napa appellations on labels, on packaging materials, and in advertising for wines that are not made from grapes grown in Napa County, and that consumers are confused and deceived by these practices. [][]

(3) The Legislature further finds that legislation is necessary to eliminate these misleading practices. It is the intent of the Legislature to assure consumers that the wines produced or sold in the state with brand names, packaging materials, or advertising referring to Napa appellations in fact qualify for the Napa County appellation of origin.” (§ 25241, subd. (a), added by Stats. 2000, ch. 831, § l.) The resulting legislation,

section 25241, provides in relevant part that no wine produced or marketed in California shall use a brand name or have a label bearing the word “Napa” (or any federally recognized viticultural area within Napa County) unless at least 75 percent of the grapes from which the wine was made were grown in Napa County. (Id., subd. (b).) The legislative history discloses that

section 25241 was designed to close what some legislators termed a “loophole” created by an exception in a federal wine labeling regulation. As discussed more fully below, federal law, the Federal Alcohol Administration Act, or FAA Act (27 U.S.C. § 201 et seq.), enacted by Congress in 1935, bars misleading statements on wine labels (id., § 205(e)) and requires federal approval of each label via a certificate of label approval (hereafter sometimes COLA) before that label may be used in interstate or foreign commerce. A 1986 federal regulation, also described more fully below, designed to implement 27 United States Code

section 205(e), generally prohibits the use of a label bearing a brand name that implies the wine was made from grapes grown in the area suggested by the brand, unless at least 75 percent of the grapes used to make the wine were in fact grown in that area (27 C.F.R. § 4.39(i)(l)).

But a “grandfather clause” appended to the federal regulation exempts from the federal regulation’s prohibition an otherwise misleading geographic brand name if the brand name was in use prior to July 7, 1986, and the front label also discloses the true geographic source of the grapes used to make the wine contained in the bottle. (Id,., § 4.39(i)(2)(ii).) In other words, the state statute prohibits, with respect to Napa County, what the federal regulation’s grandfather clause does not prohibit. In late December 2000, shortly before

section 25241 was to become effective, Bronco filed an original petition for a writ of mandamus in the Court of Appeal, seeking to prohibit respondents (the Department of Alcoholic Beverage Control and its then Interim Director, Manuel R. Espinoza, currently Jerry R. Jolly, Director) (hereafter the Department) from enforcing

section 25241 with respect to Bronco’s wines, on the ground that the. state statute to the extent it applies to wine destined for interstate or foreign commerce is preempted by the grandfather clause contained in the federal law. Bronco also claimed that the California statute violates the First Amendment, the commerce clause, and the takings clause of the United States Constitution. Intervener Napa Valley Vintners Association (NVVA) joined with the Department in defending the validity of the state enactment. The Court of Appeal issued an alternative writ and granted a stay of enforcement of

section 25241. As noted above, that court ultimately concluded that

section 25241 is preempted by federal law, and to date that statute has not been enforced. We granted review to address the preemption issue only. n. A. The basic rules of preemption are not in dispute: Under the supremacy clause of the United States Constitution (art. VI, cl. 2), Congress has the power to preempt state law concerning matters that lie within the authority of Congress. (Crosby v. National Foreign Trade Council (2000) 530 U.S. 363, 372 [147 L.Ed.2d 352, 120 S.Ct. 2288] (Crosby).) In determining whether federal law preempts state law, a court’s task is to discern congressional intent. (English v.

General Elec. Co. (1990) 496 U.S. 72, 78-79 [110 L.Ed.2d 65, 110 S.Ct. 2270].) Congress’s express intent in this regard will be found when Congress explicitly states that it is preempting state authority. (Jones v. Rath Packing Co. (1977) 430 U.S. 519, 525 [51 L.Ed.2d 604, 97 S.Ct. 1305] (Jones).) Congress’s implied intent to preempt is found (

i) when it is clear that Congress intended, by comprehensive legislation, to occupy the entire field of regulation, leaving no room for the states to supplement federal law (Rice v. Santa Fe Elevator Corp. (1947) 331 U.S. 218, 230 [91 L.Ed. 1447, 67 S.Ct. 1146] (Rice)); (ii) when compliance with both federal and state regulations is an impossibility (Florida Avocado Growers v. Paul (1963) 373 U.S. 132, 142-143 [10 L.Ed.2d 248, 83 S.Ct. 1210] (Florida Avocado)); or (iii) when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” (Hines v.

Davidowitz (1941) 312 U.S. 52, 67 [85 L.Ed. 581, 61 S.Ct. 399] (Hines); see also Crosby, supra, 530 U.S. at p. 373; Barnett Bank of Marion Cty., N.A. v. Nelson (1996) 517 U.S. 25, 31 [134 L.Ed.2d 237, 116 S.Ct. 1103] (Barnett Bank); Lawrence County v. Lead-Deadwood School Dist. (1985) 469 U.S. 256, 260 [83 L.Ed.2d 635, 105 S.Ct. 695] (Lawrence County); Capital Cities Cable, Inc. v. Crisp (1984) 467 U.S. 691, 699 [81 L.Ed.2d 580, 104 S.Ct. 2694]; see also Dowhal v.

SmithKline Beecham Consumer Healthcare (2004) 32 Cal.4th 910, 923-924 [12 Cal.Rptr.3d 262, 88 P.3d 1] (Dowhal).) In the present case, it is clear that Congress has not expressly preempted state authority with respect to the regulation of wine generally, or with respect to wine labels in particular, and Bronco does not contend otherwise. Neither does Bronco contend that this is a case in which Congress has occupied the field and thus impliedly preempted the state statute here at issue.

Nor does Bronco contend that implied preemption is shown because compliance with both federal and state regulations is impossible; as Bronco concedes, it can comply with the stricter state law and simultaneously comply with federal law. Instead, Bronco asserts that we should find implied preemption in this case because

section 25241 stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. (Cf. Dowhal, supra, 32 Cal.4th 910, 929, 935 [state law warnings concerning nicotine frustrate the purposes of the federal Food, Drug & Cosmetic Act and corresponding federal regulations].) As we shall explain, we disagree that

section 25241 is impliedly preempted by federal law. In reaching this conclusion we first address Bronco’s assertion that a presumption against preemption does not apply in this matter. (See post, pt. II.B.l.) After extensively reviewing the history of state regulation of beverage and wine labels prior to Congress’s adoption of the FAA Act in 1935—a history that reveals substantial state involvement and very little federal regulation—we conclude that a presumption against preemption does indeed apply in this case. Next, we address the intent of Congress in enacting the FAA Act in 1935. (See post, pt.

II.C.l.) The legislative history of that enactment reveals congressional intent, among other things, (

i) to prevent the deception or misleading of consumers related to the labeling of wine and other alcoholic beverages, and (ii) to supplement—but not supplant—existing state regulation of the industry. We next consider the intent of the responsible federal regulatory agency vis-á-vis state regulation of wine brand labeling, as reflected in regulations and comments set out in the Federal Register. (See post, pt. H.C.2.) As we explain, the record reveals that the federal regulatory agency has long operated on the understanding that states may and would continue to impose their own stricter wine labeling regulations.

Finally, we address the substantive issue of implied preemption of the particular state legislation at issue and conclude that the California statute in question does not stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. (See post, pt. HD.) B. The party who claims that a state statute is preempted by federal law bears the burden of demonstrating preemption. (See, e.g., McCall v.

PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 422 [106 Cal.Rptr.2d 271, 21 P.3d 1189], and cases cited.) An important corollary of this rule, often noted and applied by the United States Supreme Court, is that “[wjhen Congress legislates in a field traditionally occupied by the States, ‘we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.' " (California v.

ARC America Corp. (1989) 490 U.S. 93, 101 [104 L.Ed.2d 86, 109 S.Ct. 1661], italics added (ARC America Corp.), quoting Rice, supra, 331 U.S. 218, 230; see also, e.g., United States v. Locke (2000) 529 U.S. 89, 107-108 [146 L.Ed.2d 69, 120 S.Ct. 1135] (Locke); Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 485 [135 L.Ed.2d 700, 116 S.Ct. 2240] (Medtronic) [presumption applies both to the existence of preemption and the scope of preemption]; Ray v.

Atlantic Richfield Co. (1978) 435 U.S. 151, 157 [55 L.Ed.2d 179, 98 S.Ct. 988] (Ray); Jones, supra, 430 U.S. 519, 525; Florida Avocado, supra, 373 U.S. 132, 146; Allen-Bradley Local v. Board (1942) 315 U.S. 740, 749 [86 L.Ed. 1154, 62 S.Ct. 820]; Napier v. Atlantic Coast Line R. Co. (1926) 272 U.S. 605, 611 [71 L.Ed. 432, 47 S.Ct. 207]; Savage v. Jones (1912) 225 U.S. 501, 533 [56 L.Ed. 1182, 32 S.Ct. 715] (Savage); Reid v.

Colorado (1902) 187 U.S. 137, 148 [47 L.Ed. 108, 23 S.Ct. 92].) As explained in Jones, supra, 430 U.S. 519, 525, this venerable presumption “provides assurance that ‘the federal-state balance,’ . . . will not be disturbed unintentionally by Congress or unnecessarily by the courts.” (Citation omitted; see Olszewski v.

Scripps Health (2003) 30 Cal.4th 798, 815 [135 Cal.Rptr.2d 1, 69 P.3d 927] (Olszewski).) The Department and the NVVA assert that the state regulation at issue in this case directly implicates the traditional police powers of the states to protect consumers from deception in the marketing of food and beverages and to safeguard the integrity—and worldwide market—of a vital California industry. (See, e.g., Florida Avocado, supra, 373 U.S. 132, 146 [state police powers properly are employed both to protect consumers’ health and to “prevent the deception of consumers”]; Pike v.

Bruce Church, Inc. (1970) 397 U.S. 137, 143 [25 L.Ed.2d 174, 90 S.Ct. 844] [recognizing a state’s interest in protecting its reputation as a reliable source of authentic, high-quality goods in all markets where its goods compete].) Indeed, we observed as much concerning the California wine industry more than 100 years ago. (Ex parte Kohler (1887) 74 Cal. 38, 42-43 [15 P. 436] [state wine labeling statute, designed to protect the health of consumers and the integrity of the wine industry, was a proper exercise of the police power].) Bronco and amici curiae on its behalf, Abundance Vineyards et alia., assert, however, that no presumption against preemption applies in this case because there is no evidence that states traditionally have exercised their police powers to regulate the labeling of wine.

Specifically, Bronco argues that prior to the August 1935 enactment of the FAA Act, 27 United States Code

section 201 et seq., federal regulation of wine labeling was “well-established,” whereas the activity of the states in that enterprise was “limited.” Bronco maintains that “although the states have played a limited role in regulating wine labeling over the past century, the federal government’s presence in that field . . . would negate the application of any presumption against preemption in this case.” Amici curiae assert, similarly and more emphatically, that prior to enactment of the FAA Act in August 1935 “state and local authorities had exercised control over the distribution and sale of liquor” but that “it was the federal government that first comprehensively regulated the packaging and labeling” of wine.

The Department and the NVVA, on the other hand, point to early California statutes addressing wine labeling, isolated statements in treatises and legal articles, and statements in congressional reports and debates suggesting an intent by Congress in 1935 that the FAA Act, including 27 United States Code

section 205(

e) and the regulations that would be expected to flow therefrom, would supplement state regulation of wine labeling but not preempt it. Prior to oral argument we solicited supplemental briefing from the parties, asking them to address the effect, if any, of numerous additional state statutes and regulations disclosed in the course of our review of this case.

Having considered those materials and the parties’ supplemental briefs, we conclude below that the historic record amply supports the conclusion that a presumption against preemption applies in this case because the protection of consumers from potentially misleading brand names and labels of food and beverages in general, and wine in particular, is a subject that traditionally has been regulated by the states. 1.

Regulation of wine labels prior to adoption of the FAA Act in August 1935 Prior to the 20th century, federal legislation relating to wine and alcohol focused essentially upon revenue collection—specifically, enforcement of federal tax laws. (See Byse, Alcoholic Beverage Control Before Repeal (1940) 7 Law & Contemp.

Probs. 543, 552, fns. 57 & 58 (Alcoholic Beverage Control Before Repeal).) By contrast, as disclosed below, widespread legislation enacted by states in the mid to late 19th century, and continuing through adoption of the FAA Act in August 1935, focused upon the substantive public problems of “adulteration” and “misbranding” (or “mislabeling”) of wines and alcohol. This historic record supports the view that prior to adoption of the federal act in 1935, states vigorously exercised their police powers to regulate wine labeling. a.

The emergence of state “pure food” and labeling statutes During the latter half of the 19th century, awareness gradually increased throughout the nation concerning a combination of related problems in the supply of food and beverages.

Some food and beverage products were mere imitations or dilutions of what they purported to be; other products, subject to spoilage, were “adulterated” by a “soaring employment of chemical preservatives.” (Young, Pure Food (1989) p. 126.) Many of these preservatives—such as salicylic acid, employed as a preservative in wine (id., at p. 105)—were used in excessive quantities dangerous to health. (Id., at pp. 110, 112, 126.) As a result, it was found that more than “73 per cent of the milk in Buffalo [New York] was watered, 69 of 171 samples of ground coffee collected in New York were adulterated, 71 percent of the olive oils examined in New York and Massachusetts were mixed with cotton seed oil which had been shipped from the United States and returned as ‘olive oil’ [, and] [f]orty-six percent of candy samples collected in Boston contained mineral pigments, chiefly lead chromate.” (Hart, A History of the Adulteration of Food Before 1906 (1952) 7 Food Drug Cosm.

LJ. 5, 21); see also McCumber, The Alarming Adulteration of Food and Drugs (Jan. 5, 1905) The Independent, 28, 29-31 [listing common adulterations of various products].) Wines too were subject to abuses. Some were “made from cheap substances and then doctored up.” (Regier, The Struggle for Federal Food and Drugs Legislation (1933) 1 Law & Contemp.

Probs. 3, 8.) Others were mislabeled as to place of origin. (Carosso, The California Wine Industry: A Study of the Formative Years (1951) p. 25 (California Wine Industry); see also Fanshawe, Liquor Legislation in the United States and Canada (1892) p. 308.) In response to the general threat to the food and beverage supply, many if not most states exercised their traditional police powers to regulate generally the marketing of impure or deceptively labeled foods and beverages. (See, e.g., Dig. of Pure Food and Drug Laws, Sen. Rep.

No. 3, 57th Cong., 1st Sess. (1901).) The vast majority of the resulting general “pure food” statutes broadly covered liquors and wines, as well as the mislabeling of those products. For example, in 1879 Wisconsin enacted a general pure food, drugs, and liquors statute, making it illegal to manufacture or sell any food (defined to include “drink”), accompanied by “any label, mark or device whatever, so as and with intent to mislead or deceive as to the true name, nature, kind and quality thereof . . . .” (1879 Wis. Laws, ch. 248, § 3, p. 502.) A similar labeling law was enacted in North Dakota. (1903 N.D.

Laws, ch. 6, §§ 1-2, pp. 9-10; 1905 N.D. Laws, ch. 11, §§ 1-2, pp. 19-20.) An Ohio statute, enacted in 1884, made it illegal to manufacture or sell any food (defined to include drink) “if by any means it is made to appear better or of greater value than it really is,” or if it contained any impure substance not “distinctly labeled” as such. (1884 Ohio Laws, § 3, p. 67; 1890 Ohio Laws, § 3, p. 248.) Substantially similar labeling statutes were enacted in Indiana, Massachusetts, Michigan, Pennsylvania, and Washington. (1899 Ind. Acts, ch. 121, § 1, pp. 189-190; 1882 Mass.

Acts, ch. 263, §§ 1-3, pp. 206-207; 1895 Mich. Pub. Acts, No. 193, § 3, p. 358; 1895 Pa. Laws, No. 233, § 3, p. 317; 1899 Wash. Laws, ch. 113, §§ 1-3, pp. 183-184.) A Maryland statute, enacted in 1890, required that food or drink “be so manufactured ... or sold, or offered for sale under its true and appropriate name” and required that the purchaser be “fully informed by the seller of the true name and ingredients ... of such

article of food or drink . . . .” (1890 Md. Laws, ch. 604, § 1, p. 733.) Similar laws were enacted in Connecticut, North Carolina, and Tennessee. (1895 Conn. Pub. Acts, ch. 235, §§ 1, 2, p. 578; 1895 N.C. Sess. Laws, ch. 122, §§ 1, 2, 5, pp. 176-178; 1897 Tenn. Pub. Acts, ch. 45, §§ 1, 4, pp. 177-178.) Finally, a New York statute (1893 N.Y.

Laws, ch. 338), subsequently amended in 1903 and 1905, prohibited “adulterated or misbranded food.” The statute defined as “misbranded”—and illegal—any food or beverage “package ... or label” that bore “any statement regarding the ingredients or the substances contained therein, which statement [is] false or misleading in any particular, or if the same is falsely branded as to the state or territory in which it is manufactured or produced (1903 N.Y. Laws, ch. 524, § 1, p. 1192, italics added; 1905 N.Y. Laws, ch. 100, § 1, p. 141.) A substantially identical labeling law was enacted in South Dakota. (1905 S.D.

Laws, ch. 114, §§ 6, 8 & 10, pp. 162-163.) b. Early state wine labeling statutes As early as 1860, California enacted a statute to penalize the sale of “adulterated alcoholic or spirituous liquors, wines, cider, beer, or other liquid used as a beverage.” (Stats. 1860, ch. 223, § 2, p. 186, currently Pen. Code, § 382.) But in the face of rampant deception in the labeling of wines— including the bottling of California wines under false foreign labels, and the bottling of inferior foreign wines under California labels (Cal.

Wine Industry, supra, at p. 25) the California Legislature in 1866 passed a resolution asking Congress to enact nationwide legislation to curb the marketing of “spurious” and “imitation” wines and alcohols. (Sen. Cone. Res. No. 36, Stats. 1866 (approved Apr. 2, 1866) p. 908.) After much effort during the ensuing two decades, this endeavor ultimately failed in 1886. (See Cal.

Wine Industry, supra, at pp. 154-155.) Congress’s inability to adopt a nationwide wine regulation and labeling statute induced the three primary wine-producing states—California, New York, and Ohio—as well as other states with lesser wine industries (such as Arkansas, Colorado, and Oregon) to enact, under their traditional police powers, specific and detailed statutes tailored to the problems of impurity and deception in the production and labeling of wines.

California—then, as now, by far the leading producer of wine in the nation, and an acknowledged leader in quality as well—apparently was the first state to adopt such a statute, in March 1887. (Stats. 1887, ch. 36, p. 46; see Ex parte Kohler, supra, 74 Cal. 38, 42-43.) The California statute defined as “pure wine” that which was made from only pure grapes. (Stats. 1887, ch. 36, § 1, p. 46.) The statute further defined “[d]ry wine” as that produced by “complete fermentation of saccharine contained in [grape] must”; “[s]weet wine” as that which contains “saccharine appreciable to the taste”; “[fjortified wine” as “wine to which distilled spirits have been added”; and “[p]ure champagne, or sparkling wine” as that which “contains . . . effervescence produced only by natural fermentation of saccharine matter of [grape] must, or partially fermented wine in bottle.” (Id., § 1, p. 47.) The statute prevented the use or introduction of impure “substitutes for grapes” or coloring, or foreign fruit juices “not the pure product of grapes,” and further barred the use of preservatives such as “salicylic acid, glycerin, alum, or other chemical antiseptics.” (Id., § 2, p. 47.) The statute also provided for inspection of wine samples and for the use of bottleneck seals and label certificates (id., § 7, pp. 48-49), and required either the statement “ ‘Pure California wine’ ” (together with the maker’s name) or the label certificate to be affixed to each bottle of pure wine. (Id., § 8, p. 49.) This court’s decision in Ex parte Kohler, supra, 74 Cal. 38, rejected constitutional challenges to the act and concluded that, like legislation designed to ensure the marketing of pure milk and safe meats, the statute was a proper exercise of the state’s police powers. (Id., at pp. 41-42.) Colorado quickly followed in April 1887 with its own statute regulating the “manufacture or sale” of wine and other alcoholic beverages.

New York adopted its own wine labeling statute in June 1887. Two years later Ohio adopted a law that expanded upon the three wine labeling statutes described above Arkansas adopted a wine labeling statute in 1897 and in 1905 Oregon adopted its own wine labeling statute. c.

Relevant federal law in the early 20th century: A failed wine statute; adoption of the Pure Food and Drugs Act of 1906; administrative “food standards”; and “Food Inspection Decisions” Far from supplanting these early efforts by the states, Congress in 1906 at first attempted but failed to enact a federal wine labeling statute similar to those adopted by the states. As explained below, later in the same session Congress did enact a general pure food and beverage statute, but the resulting federal scheme produced no enforceable wine labeling regulation. Congress’s 1906 federal Pure Food and Drugs Act (Pub.L.

No. 59-384 (June 30, 1906) 34 Stat. 768 (hereafter sometimes the 1906 Act)) borrowed substantially from the preceding state food and beverage legislation. Like the earlier New York statute described above (ante, pt.

II.B.l.a.), the federal act defined as “misbranded”—and illegal—any food or beverage “package ... or label” that bore “any statement, design, or device regarding ... the ingredients or the substances contained therein, which [is] false or misleading in any particular, and [] any food or drug product which is falsely branded as to the State, Territory, or country in which it is manufactured or produced.” (Pub.L. No. 59-384, § 8 (June 30, 1906) 34 Stat. 770.) Also like the previous general pure food and beverage laws of the states, the 1906 federal Act applied to food and “drink” (Pub.L.

No. 59-384, § 6 (June 30, 1906) 34 Stat. 769), which in turn was construed to include wine. (See United States v. Sweet Valley Wine Co. (N.D. Ohio 1913) 208 F. 85, 87 (Sweet Valley).) The 1906 Act directed three department secretaries—the Secretary of the Treasury, the Secretary of Agriculture, and the Secretary of Commerce and Labor—jointly to adopt regulations “for carrying out the provisions of this Act.” (Pub.L. No. 59-384, § 3 (June 30, 1906) 34 Stat. 768-769.) As commanded by Congress, in October 1906 the three department secretaries jointly adopted a set of regulations under the 1906 Act. (See U.S.

Dept. of Agriculture, Circular No. 21, reprinted as amended through 1909 in Thornton, The Law of Pure Food and Drugs, National and State (1912) pp. 843-860 (Law of Pure Food and Drugs); see generally Hayes & Ruff, The Administration of the Federal Food and Drugs Act (1933) 1 Law & Con-temp.

Probs. 16, 20 (Administration of the Federal Food and Drugs Act).) One provision of those regulations governed the labeling of foods and beverages and prohibited, among other things, false or misleading statements concerning a product’s “place [of] origin.” (Circular No. 21, supra, Reg. 17(d), reprinted in Law of Pure Food and Drugs, supra, at p. 851.) Implicitly acknowledging, as it must, that “[p]rior to the repeal of Prohibition, no agency of the Federal Government was provided with statutory authority to regulate the labeling ... of alcoholic beverages specifically” (Russell, Controls Over Labeling and Advertising of Alcoholic Beverages (1940) 7 Law & Contemp.

Probs. 645, 645 (Controls Over Labeling)), Bronco’s supplemental brief points to (

i) separate “food standards” (including wine standards) adopted solely by the Secretary of Agriculture in the two years prior to enactment of the 1906 federal Pure Food and Drugs Act, and (ii) two “Food Inspection Decisions” (hereafter sometimes F.I.D.), one issued solely by the Secretary of Agriculture and the other issued jointly by the three secretaries. (See Standards of Purity for Food Products (June 26, 1906) Circular No. 19, reprinted in Westervelt, American Pure Food and Drug Laws (1912) pp. 61, 78-79 (American Pure Food and Drug Laws); F.I.D. No. 109 (Aug. 21, 1909); & F.I.D.

No. 120 (May 13, 1910), both reprinted in American Pure Food and Drug Laws, supra, at pp. 212-214.) As explained below, under federal law the cited food standards (including the wine standards) were merely advisory, and not legally binding, and with respect to the cited Food Inspection Decisions, the first was nonbinding and the second, even if binding, did not demonstrate federal control over the labeling of wines.

The cited food standards had been created at the behest of Congress, which in 1902 and 1903 directed the Secretary of Agriculture to undertake numerous projects, including one “to establish standards for purity of food products and determine what are regarded as adulterations therein, for the guidance of the officials of the various States and of the courts of justice . . . .” (Pub.L. No. 57-1008 (Mar. 3, 1903) 32 Stat. 1147, 1158, italics added; see also Pub.L.

No. 57-139 (June 3, 1902) 32 Stat. 286, 296.) The resulting detailed food standards addressed more than 200 categories of food items, including salted meats, oatmeal, lemon and vanilla extracts, olive oil, coffee, and—in part n.F.a.3 of the secretary’s food standards—what Bronco characterizes as “detailed and comprehensive” standards for wine, dry wine, fortified dry wine, sweet wine, fortified sweet wine, sparkling wine, modified wine (a low-alcohol product made by the addition of sugar), and raisin wine (a product made from pomace—dried, evaporated, or previously crushed grapes).

Contrary to Bronco’s suggestions and representations, the Secretary of Agriculture’s food standards (and hence the wine standards contained therein) were not enforceable under the 1906 federal Pure Food and Drugs Act (which, as noted, required that enforcing regulations be adopted by all three named secretaries), or indeed under federal law at all. (See United States v. St.

Louis Coffee & Spice Mills (E.D.Mo. 1909) 189 F. 191 [finding the food standards relating to vanilla extract unenforceable under the 1906 Act].) In view of the 1906 Act’s “three secretaries” requirements for regulations and the resulting case law, the food standards proclaimed by the Secretary of Agriculture acting alone have been described by authoritative commentators as merely “advisory” and as being “for the guidance of officials and the trade but not having the force and effect of [federal] law.” (Salthe, State Food, Drug and Cosmetic Legislation and its Administration (1939) 6 Law & Contemp.

Probs. 165, 167, italics added; see also Lee, Legislative and Interpretative Regulations (1940) 29 Geo. L.J. 1, 4-17 (Interpretative Regulations) [noting that despite many congressional attempts in the course of three decades to make the food standards enforceable, manufacturers “ ‘could take ’em or leave ’em’ without legal consequences” under federal law]; Alcoholic Beverage Control Before Repeal, supra, 1 Law & Contemp. Probs. 544, 553; cf. Administration of the Federal Food and Drugs Act, supra, 1 Law & Contemp.

Probs. 16, 32, fn. 71.) Indeed, even the treatise upon which Bronco relies concurred on this point, characterizing those same food standards as “not controlling” under federal law. (American Pure Food and Drug Laws, supra, at p. 60.) In view of this history, we must reject Bronco’s suggestion that the cited food standards, and the wine standards contained therein, constituted enforceable federal regulations under the 1906 Act or were otherwise enforceable as a matter of federal law.

We reach similar conclusions with respect to the two Food Inspection Decisions cited by Bronco, issued in 1909 and 1910, respectively. The first Food Inspection Decision, approved by the Secretary of Agriculture acting alone, stated that Missouri and Ohio wines, which typically were produced by adding substantial amounts of sugar, “would properly be called a ‘sugar wine’ ”—and that when made by the mixture of pomace, sugar, water, colorings and preservatives, such products should be called “ ‘imitation wine.’ ” (F.I.D.

No. 109, reprinted in American Pure Food and Drug Laws, supra, at p. 212.) The second cited Food Inspection Decision, issued under the signatures of the three department secretaries, essentially retreated from and modified the first and stated that in light of (and apparently in deference to) the fairly lax Ohio wine statute (see ante, fn. 24), which had long permitted the use of sugar in wine production, such “sugared” wines properly could be called “ ‘Ohio Wine,’ or ‘Missouri Wine,’ respectively, without further qualification.” (F.I.D.

No. 120, reprinted in American Pure Food and Drug Laws, supra, at p. 213.) Moreover, the decision stated, Ohio and Missouri imitation wines could be labeled as “ ‘Ohio Pomace Wine,’ or ‘Missouri Pomace Wine.’ ” (Id., at p. 214.) These decisions reveal that the federal agency, far from exercising federal authority to control state practices by requiring adherence to the “detailed and comprehensive” wine provisions of the food standards cited by Bronco, instead completely ignored those federal standards and, in the second decision, actually deferred to the applicable state wine statute, which in turn codified long-standing and lenient regional winemaking practices.

In any event, contrary to Bronco’s suggestion that these Food Inspection Decisions evinced federal control, the first cited decision, No. 109 (approved by the Secretary of Agriculture acting alone), did not constitute a regulation under the 1906 Act and was merely advisory.

Because the second cited Food Inspection Decision, No. 120, was signed by all three secretaries it arguably qualified as an enforceable federal regulation under the 1906 Pure Food and Drugs Act. (See American Pure Food and Drug Laws, supra, at p. 17.) As noted above, however, in substance this assumed regulation merely acquiesced in and adopted fairly lax state (Ohio) law. It does not, therefore, support Bronco’s implicit argument that federal regulatory authorities during this period exercised power to control wine labels in a manner different from that of the states.

For these reasons we reject Bronco’s suggestion that the Secretary of Agriculture’s food standards, including the detailed and comprehensive wine standards, constituted enforceable federal law, that Food Inspection Decision No. 109 constituted an enforceable federal wine labeling regulation, or that Food Inspection Decisión No. 120 evinced anything more than federal acquiescence in state law.

Based upon the material cited to us, we conclude that whatever federal regulation of wine labeling existed between the first decade of the 20th century and the advent of Prohibition was achieved only indirectly, on a case-by-case basis, through prosecutions under the general misbranding provisions of the 1906 federal Pure Food and Drugs Act. That relatively limited federal activity, however, neither erased nor eclipsed the previous quarter-century of state regulation described above. (Ante, pt.

II.B.1.a. & b.) Moreover, at the same time federal activity in this area was commencing, state activity was continuing and at least keeping pace. By 1906, nearly all of the states had exercised their traditional police powers to enact pure food and beverage laws, almost all of which covered drinks, including wine.

Even more importantly, as explained below, within a few years of 1906 the Secretary of Agriculture’s food standards (including the detailed and comprehensive wine standards)—although remaining merely advisory and unenforceable under federal law—specifically were adopted as part of the general food laws of most states (including California). The perhaps ironic result was that the Secretary of Agriculture’s wine standards were to become enforceable substantive law in most states under state law, even while they remained unenforceable as a matter of federal law. d.

Relevant state law in the early 20th century: Adoption of California’s place—name wine statute; California’s Pure Foods Act and adoption of the food standards, including the wine standards; and corresponding labeling regulations Nothing in the 1906 federal Pure Food and Drugs Act implied that the existing and continuing state regulation of the misbranding of food and beverages was preempted by that federal legislation. Indeed, the act “disclose[d] very clearly that it [was] not intended to trench upon the powers of the states in any respect.” (Cleveland Macaroni Co. v.

State Board of Health (N.D.Cal. 1919) 256 F. 376, 379; see also Savage, supra, 225 U.S. 501 [upholding, against a claim of preemption, Indiana food and drug labeling regulations]; see generally Fisher, The Proposed Food and Drugs Act: A Legal Critique (1933) 1 Law & Contemp.

Probs. 74, 75 & fn. 4 (Proposed Food and Drugs Act) [noting case law holding that states were permitted to prescribe “additional standards” and that “[compliance with federal standards does not secure the right to interstate transportation free from ‘reasonable’ regulation by the state”].) Soon after passage of the 1906 federal act, the California Legislature, in an apparent effort to combat the continuing problem of the labeling of California wines as foreign wines, adopted a statute requiring a “uniform wine nomenclature” that, for the first time, specifically regulated the use of place names on wine labels.

The statute provided for “pure” California wines to be labeled with the “prefix ‘Cal’ or ‘Cala’... as for example, ‘Calclaret,’ ‘Calburgundy,’ ‘Calariesling,’ etc., . . .” (Stats. 1907, ch. 104, § 1, pp. 127-128.) The statute further prohibited the use of any such label on wines other than pure California wines.

It barred “labeling any vessel, bottle, ... or package containing any liquid other than pure wine of California manufacture, ... or any paper or brand in similitude or resemblance thereof, or any paper or brand of such form and appearance as to be calculated to mislead or deceive any unwary person or cause him to suppose the contents thereof to be pure wine of California manufacture, origin or production . . . .” (Id., § 2, p. 128.) Following passage of the 1906 federal Pure Food and Drugs Act, states left in place or expanded (or in other instances enacted for the first time) then-own statutes to address the problems of adulteration, misbranding, and mislabeling of food and beverages. (See generally American Pure Food and Drug Laws, supra, at pp. 260-1450; Proposed Food and Drugs Act, supra, 1 Law & Contemp.

Probs. 74, 75 & fn. 4.) California, for its part, adopted such a general scheme in March 1907, addressing the problem of “adulterated, mislabeled or misbranded food, or liquor.” (Stats. 1907, ch. 181, § 1, p. 208; 1907 Pure Foods Act or 1907 State Act.) That statute—like those of many other states—specifically adopted under state law the food standards (including the wine standards) that had been formulated by the Secretary of the United States Department of Agriculture, but which, as described above, were unenforceable under federal law. (Stats. 1907, ch. 181, § 3, p. 209.) Further going beyond anything set forth in the federal law, the state statute also made it illegal to, among other things, ‘falsely brand[]” any food or liquor concerning the “county; . . . city, town, [or] state ... in which it is manufactured, or produced’ (id., § 5, p. 210, italics added), and provided that “[flood and liquor shall be deemed mislabeled or misbranded within the meaning of this act . [][] [i]f the package containing it or its label shall bear any statement, design or device regarding the ingredients or the substance contained therein, which statement, design, or device shall be false or misleading in any particular.” (Stats. 1907, ch. 181, § 6, p. 210, italics added.) Accordingly, as of March 1907 and continuing through the next three decades, California (like many other states) had adopted specific and enforceable wine standards that exceeded federal law.

During this same period—and indeed, until repeal of the 1906 federal Pure Food and Drugs Act in 1938—the Secretary of Agriculture’s food standards remained unenforceable under federal law despite periodic attempts to provide otherwise. (See Interpretative Regulations, supra, 29 Geo. LJ. 1, 6-17.) e. California’s post-Prohibition-repeal wine labeling regulations With the advent of Prohibition, which became effective on January 29, 1920 (U.S.

Const., 18th Amend.), the California wine industry fell into a dormant phase, awakening upon repeal of Prohibition in December 1933 through adoption of the Twenty-first Amendment to the federal Constitution. At least two years prior to adoption of the FAA Act in August 1935—and indeed before, and in anticipation of, the repeal of Prohibition—the California Legislature, exercising both its traditional police powers and its authority under newly enacted

article XX,

section 22 of the state Constitution, adopted as an interim measure the State Liquor Control Act (Stats. 1933, ch. 178, p. 625; id., ch. 658, p. 1697) and thereafter adopted the California Alcoholic Beverage Control Act (ABC Act), which went into effect on June 13, 1935. (Stats. 1935, ch. 330, p. 1123; see Bus. & Prof.

Code, § 23000 et seq.) Meanwhile, in late December 1934—before adoption of any federal regulation applicable to wine labels—California, acting through its Department of Public Health, Bureau of Food and Drug Inspections, and pursuant to its own 1907 Pure Foods Act (Stats. 1907, ch. 181, §§ 5 & 6, p. 210), adopted regulations concerning “Definitions and Standards—Wines.” (Cal. Dept. of Pub. Health, Bur. of Food and Drug Inspection, Regs, adopted Dec. 31, 1934, amended April 13, 1935, as printed Jan. 18, 1936 (1934 Regulations).) A

preamble set forth in broad terms the purpose and scope of the regulations. The stated goal was to protect both “the consuming public” and “the wine industry as a whole.” (Id., at p. I.) To this end, the regulations adopted specific chemical

definitions for dry red wines, dry white wines, and sweet wines (id., at pp. 1-2), similar in substance to the standards incorporated into the state’s 1907 Pure Foods Act, and which, as explained ante,

part II.B.l.d, had by then been in place in California (and numerous other states) for nearly 30 years. The 1934 Regulations also established strict and detailed labeling requirements for sparkling and artificially carbonated wines (Regs., at p. 2) and for still wines (id., at pp. 2-3).

In the latter respect, the regulations addressed the decades-old problem of California wines being labeled with foreign place names such as “Burgundy.” The state regulations allowed the unqualified use of that name and similar French place names “only [for] products from France,” and provided that a wine would be “regarded as misbranded!'’ (and hence in violation of the state’s 1907 Act and ensuing regulations described ante, pt.

II.B.l.d.) if the label read “Burgundy” (or any other foreign place name) and the wine was not produced there, unless the label also “displayed with prominence equal to that” of the foreign place name, “the name of the state or country where the wine is produced.” (1934 Regs., at p. 2, italics added.) Bronco insists that these various state regulations, viewed as a whole, “did not represent any innovation by California” and that “similar, albeit more detailed and comprehensive . . . standards already had been adopted nearly thirty years before by federal regulators.” As explained ante,

part II.B.l.c, however, the historic record does not support Bronco’s claim. The standards to which Bronco refers never were enforceable under federal law, but in fact, by 1907, they had become part of the substantive (and enforceable) law of California—and within a short time, of most other states as well. In other words, the touted innovation (enforceable wine labeling standards) was accomplished by California and other states, and not by the federal government. f.

Initial (and short-lived) federal wine labeling regulations issued by the Federal Alcohol Control Administration As Bronco emphasizes, a few months after adoption of the 1934 California wine labeling regulations, federal wine labeling regulations (which, as explained below, proved to be short-lived and never became effective) were for the first time adopted in late March 1935 by the recently created Federal Alcohol Control Administration (FAC Administration), which had been established by executive order under the National Industrial Recovery Act (15 U.S.C. § 703). (See Harrison & Lane, After Repeal (1936) p. 24 (After Repeal).) The FAC Administration’s regulations, like the numerous similar state food and beverage regulations that preceded them, were directed against, among other things, “misbranding”—the false or misleading labeling of alcoholic beverages. (See FAC Admin., Misbranding Regs., Series 7, Regs.

Relating to the Labeling of Wine (Mar. 25, 1935) § 3(b)(3) (Misbranding Regulations) [a wine bottle is misbranded if its label “tends to create a misleading impression of the wine”]; see generally O’Neill, Federal Activity in Alcoholic Beverage Control (1940) 7 Law & Contemp. Probs. 570, 572; After Repeal, supra, at pp. 27-29.) Nowhere in these nascent federal regulations was there any suggestion that they preempted stricter state regulations.

In any event, within two months of their adoption and prior to their effective date (see Misbranding Regs., supra, § 1(a)(3)), the federal regulations became unenforceable in late May 1935 after the United States Supreme Court invalidated as unconstitutional similar “fair competition” codes adopted under the National Industrial Recovery Act. (Schechter Corp. v. United States (1935) 295 U.S. 495, 541-542 [79 L.Ed. 1570, 55 S.Ct. 837].) g. Continuing regulation by other states Despite the initial failure of federal regulation of wine labels, regulation by the states continued in and through 1935.

In addition to California’s then long-established general food and beverage regulations, and its then recent specific wine regulations, described ante, part H.B.l.d-e, the Ohio and Oregon wine labeling statutes, described above (ante, fus. 24 & 26), still were in effect and most other states had food and beverage statutes, the majority of which regulated mislabeling or misbranding of beverages, including wine.

As already explained, many of those statutes adopted specific and comprehensive wine standards that were enforceable only under state, and not federal, law—and as of 1935, many had been revised specifically to bar misrepresentations on labels concerning the place of manufacture or production. 2.

Propriety of imposing a presumption against preemption in this case In light of the history set forth above, we disagree with Bronco’s assertion, advanced in its original brief in this court, that federal regulation of wine labeling prior to Congress’s adoption of the FAA Act in August 1935 was “well established,” and that “[b]y contrast, the states’ regulation of wine labeling . . . ranged from limited to none.” Nor do we agree with the accusation of amici curiae Abundance Vineyards et al. that the Department and the NVVA have “suggested, misleadingly, that the States, and not the Federal government, historically played the dominant role in the regulation of the alcoholic beverage industry before enactment of the FAA Act.” (Italics added.) Based upon our review of the relevant history, we conclude that from the mid to late 19th century until shortly after the repeal of Prohibition, the states’ exercise of their traditional police power to regulate the labeling of food—including wine and other alcoholic beverages—was both extensive and dominant.

This historic evidence demonstrates that when, as described below, Congress finally entered the specific field of wine label regulation in August 1935 by enacting the FAA Act, under which the federal regulation here at issue was promulgated, Congress was legislating in a field “traditionally regulated by the States.” (ARC America Corp., supra, 490 U.S. 93, 101, and cases cited.) Accordingly, a strong presumption against preemption applies, and a court should not find that the traditional police powers of the states to regulate wine labels (in order to prevent the deception of consumers) are superseded unless it is clear and manifest that Congress intended to preempt state law.

We turn now to consider whether, as Bronco claims, there was, at the time of the enactment of the FAA Act or thereafter, a clear and manifest intent on the part of Congress to preempt wine labeling regulation by the states such as is found in

section 25241. We find no such intent. We thereafter consider whether, as Bronco claims,

section 25241 is impliedly preempted by federal law because it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” (Hines, supra, 312-U.S. 52, 67.) As we explain, we find no such implied preemption. C. 1. Whether Congress, when it enacted the FAA Act in 1935, intended to preempt state wine labeling regulation 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. (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 [ialcoholic 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. H.B.l.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, [f] 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, 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.

ILB.l.d. & e.), were continuing to exercise their traditional police powers in this area. (See ante, pt. II.B.l.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).) 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.) 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. 2.

Post-1935 congressional and regulatory agency intent to preempt state wine label regulation Bronco further suggests that subsequent to the enactment of 27 United States Code

section 205(

e) in August 1935 and the adoption, by agencies within the Department of the Treasury, of implementing regulations, both Congress and the federal regulators manifested intent that the federal wine labeling regulations would preempt more stringent state wine labeling regulations. Applying again, as we must, a presumption against preemption in this context, we inquire whether Congress or the regulatory arm established within the Department of the Treasury evinced á clear and manifest intent to preempt state wine labeling regulations such as California’s

section 25241. In so doing, we keep in mind the entire history of state regulation of wine labeling and the history and language of the FAA Act described above. As explained below, after reviewing (

i) the early federal regulations and early state regulations that imposed standards higher than the federal regulations, (ii) subsequent federal regulations and pronouncements recognizing the applicability of state labeling law, and state wine regulations enacted in the mid-1970s (especially certain Oregon regulations, one of which is substantively similar to the challenged

section 25241), and (iii) a 1988 amendment to the FAA Act, concerning health warnings on alcoholic beverages, we continue to find no evidence of any clear or manifest intent on the part of Congress or the responsible federal agency to preempt state wine labeling regulation such as

section 25241. Indeed, the evidence demonstrates that the federal agency has long contemplated or at least acquiesced in concurrent and stricter state regulation. a. Federal and California regulations issued after passage of the FAA Act As noted above, prior to adoption of the FAA Act, California had in place, by December 1934, specific and detailed wine regulations restricting, among other things, the use of place names on wine labels. (See ante, pt.

ILB.l.e.) In bulletins and reports issued in the years immediately thereafter, the California Department of Public Health touted its enforcement of those state regulations, which it described as requiring the “honest labeling of wines.” In late December 1935, four months after adoption of the FAA Act, and one year after California’s adoption of its own post-Prohibition-repeal wine labeling regulations, valid federal wine labeling regulations were approved, and those regulations became effective on March 1, 1936. (U.S. Dept. Treas., Fed. Alcohol Admin., Regs.

No. 4 Relating to Labeling and Advertising of Wine (Dec. 30, 1935) arts. I-VII, 1 Fed.Reg. 83 (Apr. 1, 1936) (hereafter Regulations No. 4); see, generally, Controls Over Labeling, supra, 7 Law & Contemp. Probs. 645, 652, fir. 25 et seq.) The federal labeling regulations, as amended in 1938 (see 3 Fed.Reg. 2093 (Aug. 26, 1938)) and thereafter, presently are designated 27 Code of Federal Regulations, sections 4.20 through 4.39. One key provision—Code of Federal Regulations

section 4.25(b)(l)(

i) and (iii)—states that a wine is “entitled” to be described with an appellation of origin if “[a]t least 75 percent of the wine is derived from fruit. . . grown in the appellation area indicated” and “it conforms to the laws and regulations of the named appellation area governing the composition, method of manufacture, and designation of wines made in such place.” (Italics added.) Soon after the adoption of this federal provision in 1938, a California statute was enacted, and two regulations were adopted, all three of which imposed more stringent California wine labeling requirements.

First, in 1939, the Legislature amended the state ABC Act (Bus. & Prof. Code, § 23000 et seq.) to prohibit the use on wine labels of the phrase “California Central Coast counties dry wine,” unless the wine was in fact made entirely from grapes grown in specified Central Coast counties. (Stats. 1939, ch. 1033, §§ 1—4, p. 2838; see Bus. & Prof. Code, §§ 25236-25238.) Second, by 1942, a regulation had been adopted imposing a similar 100 percent grape origin requirement for any wine labeled as “ ‘California’ or any geographical subdivision thereof.” (See Cal. Dept. of Pub. Health, Regs.

Establishing Stds. of Identity, Quality, Purity and Sanitation and Governing the Labeling and Advertising of Wine in Calif. (May 23, 1942) art. I, § 2(aa) (hereafter 1942 Regulations), presently found at Cal. Code Regs., tit. 17, § 17015, subd. (a)(1).) Third, by 1942 a California regulation barred the sale of wines labeled with so-called coined (or semi-generic) brand names if the “brand designation resembles an established wine type name such as . . . Madeira, . . . Port, . . . Claret, [or] Burgundy, etc. . . .” (See 1942 Regs., art.

II, § 8.) Under this and subsequent versions of the same regulation, a label such as “Burgundy brand” was long barred in California. The first two California labeling rules described above plainly imposed (and still impose) a more stringent standard than the 75 percent requirement set forth in the federal appellation of origin regulation. (Regs.

No. 4, § 25, as revd., 3 Fed.Reg. 2093, 2096 (Aug. 26, 1938), presently found at 27 C.F.R. § 4.25(b)(l)(i).) The third provision described above prohibited name types that the federal regulations have permitted since 1941 upon a proper showing. (See 27 C.F.R § 4.33(b), as revd., 6 Fed.Reg. 2874 (June 13, 1941) [disallowing such a geographic name unless a federal officer finds the name, either qualified by word “brand” or otherwise, “conveys no erroneous impressions as to the . . . origin ... of the product”].) Although the parties dispute whether the first two state rules cited above are sanctioned by title 27 Code of Federal Regulations

section 4.25(b)(1)(iii)—the federal provision that expressly authorizes state regulation concerning the “composition” (the grape ingredients) or “designation” of wine (the class or type of wine, as distinct from its source or origin)—the third California regulation, the coined brand-name provision, cannot be so distinguished. That state regulation plainly controlled, more strictly than the federal rules, not the mere composition or designation of wines, but the brand-name labeling of wines.

In any event, there is no indication that any question previously has arisen concerning the authority or enforceability of the California statute or of either regulation. Indeed, since mid-1939, the California Legislature has authorized state wine regulations that are stricter than federal wine regulations, and for nearly the past 35 years, the Legislature expressly has authorized state wine regulations to “differ from or be inconsistent with” federal wine regulations (Health & Saf.

Code, § 110525, italics added); yet there is no indication the federal government has taken issue with this long-standing assertion of broad state authority. The history of the early post-Prohibition-repeal California and federal wine labeling regulations reveals no evidence of any clear or manifest intent on the part of Congress, or the regulatory agency charged with executing the relevant law, to preempt state wine labeling regulation such as

section 25241. This history suggests, instead, the opposite. b. Modification of federal regulations in the 1970s and 1980s, and adoption by Oregon of its more stringent wine labeling regulations Beginning in the mid-1970s, the BATF, which in 1972 had been delegated the task of creating and enforcing federal regulations (see ante, fn. 43), began to consider proposals to further define and regulate appellations of origin.

In connection with that inquiry, the BATF also began to consider how better to regulate the use in brand names of terms of “geographic or viticultural significance.” (42 Fed.Reg. 30517, 30518 (June 15, 1977).) In 1978 the BATF adopted, but then postponed enforcement of, new brand-name rules, and it also adopted new regulations concerning appellations of origin— including a new subcategory within appellations of origin known as “viticultural areas.” (43 Fed.Reg. 37672, 37674, 37678 (Aug. 23, 1978).) The 1978 federal appellations of origin regulation expressly recognized the enforceability of state laws in relation to placing a “viticultural area” designation on a wine label, making the right to so label a wine contingent on compliance with, among other things, “the laws and regulations of all of the States contained in the viticultural area.” (27 C.F.R. former § 4.25a(e)(3)(iv) (1978-1981); id., former § 4.25a(e)(3)(v) (1981-1986), italics added.) Prior to and during this same period of federal regulatory action and consideration of geographic brand-name regulations (see ante, fn. 56), in 1977 the State of Oregon departed from the federal labeling regulations in substantial ways, imposing more stringent state rules concerning matters such as percentage content of Oregon appellation wines, use of “semi-generic” place names, percentage content of varietal wines, use of the term “estate bottled,” and the use of geographic brand names.

In each of these respects, Oregon reserved the right to disapprove wine labels that had been granted a valid federal certificate of label approval. For present purposes, the most relevant of these various departures from federal wine labeling regulations concerns Oregon’s geographic brand-name rule. Effective March 1, 1977, Oregon Administrative Rule 845-10-292(6)(

e) provided that appellation names—including the names of Oregon counties, and the names of Oregon wine-producing regions Willamette Valley, Umpqua Valley, and Rogue Valley—“shall not be used in a brand name, in the name of a winery or in any other manner on a label unless 100 percent of the grapes used to produce the wine were grown within the boundaries of that appellation of origin.” (Italics added.) The regulation included a grandfather clause permitting “use by a winery of a brand name which has been in use by that winery on its approved labels prior to January 1, 1977.” (Or. Admin.

R. 845-10-292(6)(e) (1977), italics added.) Like the other Oregon labeling rules that specifically exceed the federal regulations, this Oregon geographic brand regulation remains in force today, more than a quarter-century after its adoption. (See Or. Admin. R. 845-010-0920(4)(f) (2004)). We find these Oregon regulations relevant to our current inquiry in three interrelated respects. First, the state regulations—especially the strict geographic brand-name rule, and the estate-bottled rule—demonstrate that Oregon has long imposed labeling rules that are both (

i) more stringent than the federal rules and (ii) go far beyond 27 Code of Federal Regulations

section 4.25(b)(l)(iii)’s authorization for states to regulate the “composition, method of manufacture, [or] designation of wines . . . .” Second, it is clear that the BATF has long been aware of these stricter Oregon rules and apparently views them as enforceable. The Oregon regulations had been in place for approximately 16 months at the time the BATF adopted its 1978 regulation concerning the use of “viticultural area” appellations on wine labels.

That 1978 BATF regulation, as noted above, expressly acknowledged and required compliance with “the laws and regulations of all the States contained in the viticultural area.” (27 C.F.R. former § 4.25a(e)(3)(iv) (1978-1981); id., former § 4.25a(e)(3)(v) (1981-1986), italics added.) By so providing, the BATF, as of 1978, acknowledged the propriety and enforceability of the more stringent labeling rules promulgated by the states.

Indeed, any doubt in this regard is dispelled by the BATF’s action and comments seven years later (in late January 1986) when, in the course of repealing as a federal requirement 27 Code of Federal Regulations former

section 4.25a(e)(3)(v)’s rule concerning compliance with state regulations relating to viticultural areas, the BATF expressly and repeatedly acknowledged both the existence and the enforceability of Oregon’s “more stringent” wine labeling regulations. The BATF explained that although it had decided, with regard to viticultural areas, to eliminate compliance with state laws as a federal requirement, the underlying substantive state law requirements relating to viticultural areas would remain, to be enforced solely by the respective states.

The BATF observed: “State laws and regulations of the state in which the wine was fermented or finished will, of course, continue to apply to the producing winery. These state laws and regulations are enforced by the state involved.’'’ (51 Fed.Reg. 3773, 3774 (Jan. 30, 1986), italics added.) Third and finally, the Oregon geographic brand-name regulation, in particular, sheds light upon the BATF’s apparent understanding of the grandfather clause at issue in this case.

Almost 10 years after Oregon adopted its restrictive geographic brand-name labeling regulation, the BATF, after considering various options over the preceding decade (see ante, fn. 56, and post, fn. 70), amended 27 Code of Federal Regulations

section 4.39(i)(

l) in the manner at issue in this case, to prohibit the use of labels with brand names implying that a wine was made with grapes grown in the area suggested by the brand name, unless at least 75 percent of the grapes used to make the wine were in fact from that area.

But, as noted above, the new federal regulation also contained a grandfather clause that lies at the center of the controversy in this case, under which such otherwise misleading labels are not prohibited, so long as the label was in use prior to July 1986 and the label discloses the true appellation of origin of at least 75 percent of the grapes actually used to make the wine inside the bottle. (Id., § 4.39(i)(2)(ii).) In view of the BATF’s explicit acknowledgement, only four months prior to its adoption of the provision at issue in the present case, that the Oregon labeling regulations are proper and enforceable (see 51 Fed.Reg. 3773, 3774 (Jan. 30, 1986)), it is reasonable to assume that the BATF, when it adopted the grandfather clause, was aware of Oregon’s “more stringent” geographic brand-name labeling rule.

And yet the BATF said nothing in its new provision or in its discussion of that new rule to suggest that the new rule preempted Oregon’s long-standing, closely related, and more stringent brand-name labeling rule. Accordingly, contrary to Bronco’s theory that the BATF itself viewed or views its wine labeling regulations as preempting more stringent state regulations, we conclude that the history of the federal and Oregon wine labeling regulations in the mid-1970s through the present reveals no evidence of any such intent.

Instead, that history strongly indicates that the BATF has long contemplated that the states will enforce their own stricter labeling requirements, and that the agency did not and does not view its labeling regulations as preempting more stringent state regulations such as

section 25241. c. Amendment of the FAA Act in 1988, and corresponding regulations, requiring health warning labels and expressly preempting state regulation of such labels In 1988, Congress amended the FAA Act to require that all wine labels (and the labels of other alcoholic beverages) contain a warning on the back label, as follows: “GOVERNMENT WARNING:

(1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects.

(2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems.” (27 U.S.C. § 215(a).) Congress gave the BATF authority to issue appropriate regulations to enforce Congress’s will (27 U.S.C. § 215(b) & (d)), and, stressing the perceived need in this particular area for Congress to “exercise the full reach of the Federal Government’s constitutional powers in order to establish a comprehensive Federal program” (27 U.S.C. § 213), further provided expressly for federal preemption of such health warnings on alcoholic beverage labels: “No statement relating to alcoholic beverages and health, other than the statement required by

section 215 of this title, shall be required under State law to be placed on any container of an alcoholic beverage . . . .” (27 U.S.C. § 216.) The BATF responded by adopting implementing regulations (see 27 C.F.R. § 16.20 et seq.) as well as a provision expressly reaffirming the preemptive effect of that regulation. (27 C.R.F. § 16.32.) As the United States Supreme Court has observed, “ ‘an express definition of the pre-emptive reach of a statute . . . supports a reasonable inference . . . that Congress did not intend to pre-empt other matters.’ ” (Lorillard Tobacco Co. v.

Reilly (2001) 533 U.S. 525, 541 [150 L.Ed.2d 532, 121 S.Ct. 2404], quoting Freightliner Corp. v. Myrick (1995) 514 U.S. 280, 288 [131 L.Ed.2d 385, 115 S.Ct. 1483]; accord, Bass River Associates v. Mayor, Tp. Com’r (3d Cir. 1984) 743 F.2d 159, 162 [“It is of some interest and no small significance that a provision in the same title does provide for federal preemption of state and local laws or regulations . . . .”].) This inference and these observations are especially apt here, in light of the history described above, which strongly suggests (

i) no intent on the part of Congress, in 1935 or thereafter, to preempt any other category of state wine label laws, and (ii) the BATF’s acknowledgement of, and apparent acquiescence in, the more stringent wine labeling laws of the states, and specifically those of Oregon. Indeed if Congress, as Bronco asserts, by enactment of the FAA Act in 1935, already had generally preempted state regulation of wine labels, there would have been no need for any express preemption clause or preemption regulation with respect to the 1988 health warnings for wine labels.

Once again, this history reveals no evidence of any clear or manifest intent on the part of Congress or the BATF to preempt state wine labeling regulation such as

section 25241. Instead, the history supports an opposite inference that neither Congress nor the BATF intended to preempt state wine labeling laws such as

section 25241. D. Having concluded that Bronco has failed to carry its burden of establishing clear or manifest intent on the part of Congress, or congressional intent as interpreted by the BATF, to preempt the traditional exercise of state police power such as the wine labeling regulation found in

section 25241, we proceed under the presumption that no such preemption was intended. We bear this presumption in mind when we consider below Bronco’s assertion that

section 25241, by imposing a labeling requirement that is more exacting than the federal requirement, is impliedly preempted by federal law. 1. Does

section 25241, by prohibiting, with respect to Napa County, what the federal grandfather clause does not prohibit, stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress? In support of its assertion that

section 25241 frustrates the full purposes and objectives of federal law, Bronco cites various cases in which courts have made such (or similar) findings in other contexts. (Geier, supra, 529 U.S. 861, 881 [state tort action based upon failure to equip automobile with airbags would frustrate federal highway safety standards permitting car makers to employ passive restraint devices other than airbags]; Barnett Bank, supra, 517 U.S. 25, 31 [state statute barring national bank from selling insurance would obstruct federal statute that permitted, but did not require, national banks to sell insurance]; Lawrence County, supra, 469 U.S. 256, 260-268 [state law requiring certain method of distribution of federal funds held to obstruct federal statute that was designed to provide local governments freedom to spend those federal funds “as they saw fit”]; McDermott v.

Wisconsin (1913) 228 U.S. 115, 129 [57 L.Ed. 754, 33 S.Ct. 431] [state statute that required removal of certain labels on syrup was preempted by federal statute under which such labels had been approved]; Dowhal, supra, 32 Cal.4th 910, 929, 935 [state law warnings concerning nicotine frustrated the purposes of the federal Food, Drug & Cosmetic Act].) The Department and the NVVA, by contrast, distinguish each of these cases and rely instead primarily upon Sprietsma v.

Mercury Marine (2002) 537 U.S. 51, 68-70 [154 L.Ed.2d 466, 123 S.Ct. 518], in which the high court declined to find preemption of a state tort action seeking to impose standards for boat propeller guards, even in the face of a decision by federal authorities not to impose any general or universal propeller guard requirements. (See also, e.g., California Coastal Comm’n v.

Granite Rock Co. (1987) 480 U.S. 572, 582-584 [94 L.Ed.2d 577, 107 S.Ct. 1419] (Granite Rock Co.) [federal approval of mining project was not frustrated by California’s stricter environmental requirements; indeed, the federal regulations assumed the applicability of the state regulations]; Hillsborough County v. Automated Medical Labs. (1985) 471 U.S. 707, 720-721 [85 L.Ed.2d 714, 105 S.Ct. 2371] (Hillsborough County) [stricter local regulations concerning plasma donors posed no serious obstacle to related federal regulations]; cf. Exxon Corp. v.

Governor of Maryland (1978) 437 U.S. 117, 132 [57 L.Ed.2d 91, 98 S.Ct. 2207] (Exxon) [no preemption of state discriminatory pricing regulations barring conduct that triggered a limited defense under federal law].) Bronco asserts that

section 25241 frustrates the purposes of Congress, or at least of the BATF’s regulation establishing a grandfather clause (27 C.F.R. § 4.39(i)(2)(ii)), in “four interrelated ways.” Bronco argues: (

i) Section 25241 prohibits precisely what t

[…]