A legal dispute is unfolding in Santa Barbara County’s wine industry as Flying Goat Cellars, represented by the Goldwater Institute, challenges a mandatory assessment fee tied to the county’s Wine Business Improvement District.
The lawsuit seeks to allow Flying Goat Cellars to opt out of the district and stop paying a required 1% assessment fee collected from wineries under the program.
The Wine Business Improvement District was created in 2023 after supporters said a countywide marketing effort would help promote Santa Barbara County as a wine destination, increase tourism and create a more stable funding source for regional advertising and events.
According to the lawsuit, wineries are required to pay the assessment fee to the Santa Barbara Vintners Association, which administers the district.
“Whether the vineyards want to or not, they have to pay a 1% fee to the Santa Barbara County Vintners Association, and the association will then use those funds to advertise or promote,” said Adam Shelton, an attorney with the Goldwater Institute representing Flying Goat Cellars.
Shelton said Flying Goat Cellars attempted to opt out before filing the lawsuit.
“We sent them a letter back in February asking them to give Flying Goat the opportunity to opt out of this association, and neither responded, which necessitated this lawsuit,” Shelton said.
Katie Joseph, chief philosopher for Flying Goat Cellars, said the winery is not alone in opposing the district.
“Flying Goat Cellars is not the only winery in Santa Barbara County that is protesting the Wine Business Improvement District,” Joseph said. “About 50 wineries haven’t paid their assessment to the Vintners Association, which created a $1 million shortfall.”
The Santa Barbara Vintners Association said in a statement that it is aware of the lawsuit and disagrees with the claims outlined in the complaint.
“Santa Barbara Vintners is aware of the lawsuit filed by Flying Goat Cellars,” the statement said. “While we respectfully disagree with the claims outlined in the complaint, we remain committed to supporting and strengthening the Santa Barbara County wine community through collaborative marketing and regional promotion initiatives that benefit the broader industry.”
A Santa Barbara County spokesperson said the county does not comment on pending litigation.
