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Published in Food/Agribusiness
Federal judge rules in favor of Northern Michigan wineries challenging local ordinance restrictions COURTESY PHOTO

Federal judge rules in favor of Northern Michigan wineries challenging local ordinance restrictions

BY Tuesday, June 07, 2022 05:13pm

PENINSULA TWP. — A group of Northern Michigan wineries have found relief from a collection of township ordinances that business owners said restricted their operations and limited significant revenue streams.

A federal judge in Grand Rapids on Friday ruled in favor of 11 wineries belonging to the Old Mission Peninsula Association in their yearslong battle with Peninsula Township near Traverse City.

The opinion from Judge Paul Maloney in the U.S. District Court for the Western District struck down long-standing ordinances — some that date back 50 years — that included restrictions on the types of events wineries could host, the food they could serve out of their kitchens, and where they source their grapes.

The wineries of the Old Mission Peninsula Association claimed in an October 2020 lawsuit that the township’s ordinances were unconstitutional by violating free speech protections and illegally restricted commerce. Maloney agreed, issuing an injunction on several ordinances that involve these claims.

A judge will now determine the financial damages inflicted by the township. 

Joseph Infante, head of the alcoholic beverage regulation team at Miller, Canfield, Paddock and Stone PLC, which represented the association, said a trial date is scheduled for Aug. 16.

Infante’s expert witnesses have estimated that Peninsula Township and its constraining ordinances have cost roughly $203 million in profits for the wineries, though Maloney said in his opinion that “no evidentiary support” was provided to back up the figure.

“They have full use of their winery businesses now,” Infante told MiBiz. “I think that’s the most impactful thing. They can now offer a broader range of services and experiences to their customers that they couldn’t do before.”

Plaintiffs in the case were 2 Lads Winery, Bowers Harbor Vineyard & Winery Inc., Brys Winery LLC, Chateau Grand Traverse Ltd., Chateau Chantal, Peninsula Cellars, Hawthorne Vineyards, Bonobo Winery, Tabone Vineyards LLC, Black Star Farms LLC and Mari Vineyard.

One of the more public-facing changes of the ruling is that wineries will be able to serve a full range of food that a restaurant could instead of being limited to cheese, crackers and charcuterie.

“I’ve talked to several people (on the peninsula) that aren’t involved in the case, and they’re ecstatic to be able to go and get a meal instead of driving into Traverse City,” Infante said.

The Peninsula Township wineries can also host more types of events after being limited to cooking classes and meetings for 501(c)(3) nonprofit organizations based in Grand Traverse County.

The township has contended throughout the proceedings that the ordinances are in place to maintain order throughout designated agricultural land. Peninsula Township officials told Crain’s Detroit Business that they are reviewing the opinion.

“The sky is not falling. … They have been good neighbors and they are going to continue to be good neighbors,” Infante said. “They’re not there to make life miserable for folks who live out there. They just want to be able to run their businesses with the rights they are guaranteed under the constitution and that’s how the courts ruled.”

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