Washington Winery Cayuse's Insurer Sues Cork Producer for $3.5 Million

The company is seeking compensation after the winery lost most of its 2015 vintage due to contaminated corks

Washington Winery Cayuse's Insurer Sues Cork Producer for $3.5 Million
Cayuse general manager Trevor Dorland, left, and founder Christophe Baron walk through one of their Washington vineyards. (Andréa Johnson)
Jan 28, 2020

In fall 2017, leading Washington winery Cayuse informed its customers that faulty corks had ruined the majority of its wines from the 2015 vintage. The winery did not release the affected bottles and worked with its insurance company to reimburse its customers. Now its insurer is suing the cork producer, Lafitte Cork & Capsule, for the more than $3.5 million for damages it paid out.

The contamination affected nearly 3,000 cases of 750ml bottles, as well as 2,678 magnums of Cayuse's wines. They included some of the winery's highest rated bottlings, such as Bionic Frog, Cailloux Vineyard, En Chamberlin and En Cerise. The wines range in price from $90 to $175 a bottle and are sold through a mailing list.

In a letter to Wine Spectator, winemaker and owner Christophe Baron said, "Although we have worked diligently to resolve this unfortunate chapter in our history amicably with the cork supplier Lafitte Cork & Capsule and its insurer for the past two years, those efforts have not been successful."

Cayuse's insurer, Interested Underwriters at Lloyds of London, filed a lawsuit against the cork producer in the U.S. District Court of Northern California in late January. Since the insurer was responsible under the policy for the losses sustained by Cayuse during bottling, it is now attempting to recover the money from Lafitte.

Founded in 1982, Lafitte Cork & Capsule is based in Napa and is part of the Lafitte group, which has cork production facilities throughout Europe and South America.

The suit only involves the insurer for now, but Cayuse general manager Trevor Dorland acknowledged that the situation could change. "We have done everything within our means to find a resolution," he told Wine Spectator. "This isn't turning out the way we hoped.”

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Interested Underwriters alleges that Lafitte breached its contract by delivering defective Cayuse- and Hors Catégorie–branded corks to the winery and made false representations. According to the complaint, the corks used to bottle the 2015 wines "Introduced paraffin particulates, silicon and an oily film into the Cayuse wine, thereby contaminating the wine and making it unfit to sell in the market."

Cayuse purchased more than 44,600 corks from Lafitte in April 2017 for nearly $69,000, according to the court filing, including 38,000 corks for the Cayuse-branded wines. The winery noticed a problem while it was corking its Hors Catégorie Syrah in May 2017. The winery immediately stopped bottling when it discovered paraffin from the faulty corks, and contacted Lafitte. The remainder of the wine was returned to tank and bottled at a later date.

The winery claims that Lafitte assured it that the contamination would only affect the Hors Catégorie–branded corks and that it could proceed with bottling the rest of its wines. "We were told that the Cayuse corks came from a second, separate lot of corks and were fine," said Dorland.

According to the complaint, after the wines were bottled, Lafitte admitted that the corking machine applying the paraffin coatings was new and that the first set of corks had wax contamination.

Later, the winery discovered paraffin and an oily substance in wines bottled with the second set of corks. Cayuse and Lafitte conducted a joint inspection of the wines that confirmed that the entire bottling was affected. "We quickly distributed full reimbursements with interest to every single one of our customers who had purchased the affected bottles," said Baron. "It was a great disappointment to all of us as the wines were highly anticipated and already highly acclaimed."

Born in France’s Champagne region, Baron moved to Washington state in the early 1990s, planting his first vineyard in the Walla Walla Valley. He now has 10 estate vineyards that are planted mostly to Rhône and Bordeaux grapes. His Cayuse wines have often scored 90 points or higher on Wine Spectator’s 100-point scale.

The winery switched to a new cork producer in 2016. Wines from the 2015 vintage that were bottled in 2016 and in July of 2017 were not affected, including the God Only Knows Grenache, Armada Vineyard Syrah and The Lovers.

"It's something we've never seen," said Dorland, who hopes that the situation is resolved swiftly. He says that the winery is committed to its customers and to making world-class wines. "We are going to do everything possible to put this behind us as quickly as possible."

Lafitte representatives could not be reached for comment on the lawsuit.

News Closures Syrah / Shiraz Washington

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