Claiming that Consumer Reports made damaging factual errors in an article published last November, Korbel Champagne agreed today to withdraw its Federal lawsuit against Consumers Union, publisher of "Consumer Reports," since the magazine had recently published corrections and made concessions sought in the litigation.

"It's a sad day in America when it takes a Federal lawsuit before Consumers Union would concede as they have done in their press release and on their website, that Korbel is a 'high-quality' champagne and is manufactured through 'Methode Champenoise'," said attorney Richard Rosenthal on behalf of Korbel.

Dr. R. David Pittle, Consumers Union's Senior Vice President and Technical Director stated in a published press release, "Our expert consultants found Korbel California Champagne, Brut to be a solid, drinkable champagne, which they evaluated as 'good' overall." Dr. Pittle also stated in the press release, that Korbel was, in fact, produced by the more expensive "Methode Champenoise," a point which was at issue in the lawsuit.

Dr. Pittle had appeared on the CBS News program "60 Minutes II," last November and in answer to a question about what information Consumer Reports would give to manufacturers who had questions about the evaluations of their products, Dr. Pittle told CBS News reporter Vicki Mabrey:

"We'll show them our data. We'll show them -- we'll introduce them to the people who performed the test. They can query them and talk back and forth. So we have nothing to hide."

Korbel sought that very information at a meeting in January at the New York headquarters of Consumers Union with Consumers Union president, Rhoda Karpatkin, Dr. Pittle, and several others involved in the cover story on champagne.

Korbel counsel, Mark Lane demanded that Consumers Union comply with their publicly stated policy since there was the possibility of a conflict of interest in terms of the "experts," so long as their identities were kept secret. However, at that meeting, Dr. Pittle refused to disclose the names of the "experts" despite his prior statement on "60 Minutes II."

While Consumer Reports has continued to refuse to name their "experts," a point Korbel counsel Lane asserted goes directly to the question of the article's credibility, Dr. Pittle recently revealed new information about their "experts" in a Consumers Union press release and on their website. Finally, Dr. Pittle stated about their "experts," "Neither has worked for any of the companies whose products were compared in this project."