3rd Gallo Sues Ernest, Julio for Share of Firm
Joseph Gallo, younger brother of wine makers Ernest and Julio Gallo, claimed Thursday that his brothers have for years concealed from him his inherited right to a one-third share in what has become the world’s largest wine-making operation, which is based in Modesto.
“Joe has what appears to be a valid claim to an undivided one-third ownership of the winery as well as his family’s trade name Gallo, “ Joseph Gallo’s attorney, Jess S. Jackson, said in announcing the filing of the claim in U.S. District Court in Fresno.
A spokesman for the winery immediately branded the claim as “ridiculous” and “unbelievable,” noting that it comes as an outgrowth of a continuing legal battle surrounding the commercial use of the Gallo name.
Records Discovered
The battle began in April, when Ernest and Julio Gallo sued Joseph in an attempt to halt his use of the name Joseph Gallo on cheese made and marketed by Gallo Cattle Co., a Livingston, Calif., company owned by Joseph Gallo, his son Michael and other members of Joseph’s family.
Jackson said in an interview that legal research in that case, which is pending in the Fresno court, turned up records proving Joseph Gallo’s claim to a one-third interest in his parents’ estate and the winery that he claims developed from it.
It was not Ernest and Julio but their father--also named Joseph--who first used the Gallo family name in business.
But Daniel J. Solomon, Gallo Winery’s communications director, countered that the older brothers began the winery at the end of Prohibition in 1933 with their “personal savings.” Joseph was 13 at the time.
“The charges are ridiculous,” Solomon commented. “They obviously have been brought in an effort to coerce the winery to drop its trademark infringement suit.”
The older brothers had brought the lawsuit against Joseph, Solomon said, after “more than a year of extended discussion” to settle the name issue.
They “reluctantly” took legal action after Joseph refused an offer of a royalty-free license to use the Gallo mark on his cheese, he said. The name already was licensed to Sara Lee Corp., and the brothers acted, Solomon said, in order to “meet our obligations to Sara Lee and to protect our federal trademark.”
In the counterclaim, however, Joseph argues that Ernest and Julio had acted as his guardian until he reached his majority. In founding the winery, the older brothers “commingled” Joseph’s assets and theirs in continuing the family business, which they renamed as E&J; Gallo Winery and operated as a partnership until 1944, when the present, privately owned corporation was formed, Jackson said.
At that time, Joseph was absent, serving in the U.S. Army Air Corps, Jackson said.
Research for the trademark lawsuit unearthed a court record awarding Joseph a one-third interest in both parents’ estate and in the winery as well, he said. When Joseph reached 21, he continued, the older brothers reported to the court that they had given their brother a one-third interest in the winery, but “this fact was concealed from Joe.”
Gallo Winery, which produces wine under the Gallo and Carlo Rossi brands, wine coolers under the Bartles & Jaymes brand and sparkling wine under the Andre label--the nation’s top sellers in their categories--shipped an estimated 64.2 million cases of wine last year valued at $1.3 billion retail. This dwarfs second-place Seagram, whose brands include Taylor and Paul Masson, with 23.7 million cases valued at $725 million retail, according to Impact, a New York-based trade paper.
