A federal court in Kentucky recently weighed in on a branding battle between two bourbon distilleries—Brough Brothers Distillery and Fresh Bourbon, both of which claim to be Kentucky’s “first Black-owned bourbon distillery.” In Victory Global, LLC d/b/a Brough Brothers Distillery v. Fresh Bourbon, LLC, the Eastern District of Kentucky granted summary judgment in favor of Fresh Bourbon, dismissing Brough Brothers’ claims under the Lanham Act and related state law causes of action. The ruling provides a critical analysis of false advertising law and underscores the importance of proving materiality and consumer deception in such disputes.
Case Background
Brough Brothers sued Fresh Bourbon for false advertising, arguing that Fresh Bourbon had misrepresented itself as the first Black-owned bourbon distillery in Kentucky. Brough Brothers, owned by three Yarbrough brothers, contended that it had obtained federal and state licenses and began distilling bourbon at its own leased facility before Fresh Bourbon, which did not obtain necessary licenses or a leased facility until 2022.
Fresh Bourbon, owned by Sean and Tia Edwards, countered that it had been distilling bourbon in Kentucky since 2018 at Hartfield & Co. Distillery under a collaborative arrangement, years before Brough Brothers began operations. Fresh Bourbon also pointed to a 2021 Kentucky Senate Resolution recognizing it as the first Black-owned bourbon distillery in Kentucky, forming part of the basis for its advertising claims.
Court’s Analysis Under the Lanham Act
To prevail on its false advertising claim under Section 43(a) of the Lanham Act (15 U.S.C. § 1125(a)), Brough Brothers needed to show that:
- Fresh Bourbon made false or misleading statements of fact about its bourbon.
- The statements deceived or had the tendency to deceive a substantial portion of the target audience.
- The false statements were material, meaning they likely influenced consumer purchasing decisions.
- The advertisements were introduced into interstate commerce.
- There was a causal link between the false statements and harm to Brough Brothers.
Literal Falsity vs. Misleading Statements
The court first examined whether Fresh Bourbon’s statements were “literally false” or merely misleading. Literal falsity means that a statement is “bald-faced, egregious, undeniable, and over the top.” If a statement is literally false, deception is presumed, and the plaintiff does not need to prove consumer confusion.
Brough Brothers argued that Fresh Bourbon’s claim to be “the first Black-owned bourbon distillery in Kentucky” was literally false because it did not have distillery licenses or a facility before 2022, while Brough Brothers had both in 2020. However, Fresh Bourbon maintained that its statements were based on the recognition it received from the Kentucky Senate and that it had been actively producing bourbon since 2018, even though it lacked a dedicated facility at that time.
The court found that the statement was not literally false because Fresh Bourbon did not claim to be the first licensed distillery—only the first Black-owned bourbon distillery recognized as such by the state. Given that the Kentucky Senate had issued a resolution stating this, the court ruled that Fresh Bourbon’s statement was at worst ambiguous but not an outright lie.
Materiality and Consumer Deception
Even if a statement is misleading rather than literally false, a plaintiff can still succeed by proving actual consumer deception. This requires evidence—such as consumer surveys—showing that people believed the misleading statement and that it influenced their purchasing decisions.
Brough Brothers failed to present any such evidence. The court emphasized that merely asserting the statement’s importance to the bourbon industry did not meet the legal standard for materiality. The court also noted that even if Fresh Bourbon’s statements were misleading, there was no evidence that consumers had been influenced by them when deciding which bourbon to buy. Without proof of materiality, the Lanham Act claim failed.
State Law Claims Also Dismissed
In addition to the Lanham Act claim, Brough Brothers pursued state law claims for unfair competition, deceptive trade practices under Kentucky law, and tortious interference with business relationships. These, too, were dismissed:
- Unfair Competition: The court held that Fresh Bourbon did not attempt to pass off its product as Brough Brothers’ product, which is a key element of unfair competition claims.
- Deceptive Trade Practices (KRS § 365.100): Since Brough Brothers failed to show any consumer harm or damages, it could not recover under Kentucky’s deceptive trade law.
- Tortious Interference: Brough Brothers failed to present any evidence that Fresh Bourbon had interfered with its business relationships or contracts.
Key Takeaways for Beverage and Spirits Branding
This case highlights several important legal principles for businesses in the beverage and spirits industry:
- Proving False Advertising Requires More Than Disagreement – Courts will not deem a statement “literally false” unless it is unequivocally and demonstrably untrue. Ambiguous claims or statements backed by some form of government recognition are less likely to be found literally false.
- Consumer Deception and Materiality Matter – Even if a statement is misleading, plaintiffs must provide concrete evidence that it influenced purchasing decisions. Without survey data or consumer testimony, claims of deception will likely fail.
- State Recognition Can Provide a Safe Harbor – Fresh Bourbon successfully leveraged a Kentucky Senate resolution to support its advertising claims, illustrating how state recognition can help bolster a brand’s credibility in legal disputes.
Conclusion
Brough Brothers took issue with Fresh Bourbon’s branding but failed to prove that its competitor’s claims were materially false or misleading in a way that harmed consumers. The court’s decision reinforces the necessity of concrete evidence in false advertising cases under the Lanham Act. For spirits brands navigating competitive claims in a crowded marketplace, this case serves as a lesson in ensuring advertising claims are clear, well-documented, and—most importantly—supported by objective proof of consumer perception and materiality.
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