Monday, June 4, 2012

Frivolous Fungus Suit Endangers Kentucky Prosperity.

Kentucky is abuzz about a lawsuit filed in federal court last week. It alleges that vapors emitted by aging whiskey carry a fungus that produces persistent black spots on homes and cars.

This is nothing new in Kentucky, or anywhere that distilled spirits are aged. The Louisville Courier-Journal has a well-reported story about it here.

The fungus is well known and generally regarded as harmless, if a bit of a nuisance. It can be removed with a little soap and water. Typically, all a distillery neighbor has to do is ask and the distillery will send a cleaning crew at no charge.

It is extremely doubtful that any complainant bought their house before the accused distillery was built. The fungus was likely on their house when they bought it. It's nothing new, although it may have gotten a little worse lately because more bourbon is being made. This appears mainly to be a case of a lawyer seeing an opportunity to make some money. The allegations of serious harm are dubious and the proposed solutions are much more destructive.

For instance, one of the reasons three of the top five domestic brandies are aged and bottled in Kentucky is because California is forcing distillers there to wrap their barrels in plastic or otherwise prevent the release of ethanol, which also prevents the spirit from aging properly.

The suit alleges that the fungus is borne by the alcohol vapors. This is likely untrue. Much more likely is that the spores are everywhere in the environment, just waiting for the right combination of water and ethanol.

Kentucky is enjoying significant economic development benefit from the present bourbon boom. In addition to increased bourbon production, there is significant ancillary business such as Beam's decision to move DeKuyper Liqueur production to Kentucky and Campari's decision to also bottle Skyy Vodka in Kentucky when it returns Wild Turkey bottling to the Commonwealth next year.

The Kentucky House, primarily because of representatives from dry counties, is constantly in danger of killing the goose that lays the golden egg. Kentucky doesn't have that many booming industries, it needs to play nice with the ones it has. Kentucky readers of this blog are advised to contact your legislators. While this is a court case and not proposed legislation, it never hurts to get a jump on these things. Perhaps something can be done proactively to prevent these nuisance suits from being brought in the future.

If the case gets to trial, it will be in District Court, but if it gets to the Sixth Circuit on appeal, the bourbon-makers will have a sympathetic ear. The senior judge there is Boyce F. Martin, Jr., who demonstrated in the recent case of Maker's Mark v. Diageo that he knows his way around bourbon.

7 comments:

Adam said...

Chuck, what you mention about California and plastic-wrap sounds like urban legend. The distillers out here aren't doing that... just basic warehousing.

Chuck Cowdery said...

It sure sounds like one. I was told this by a reliable source, but reliable sources can be wrong. Any other folks with knowledge of spirits aging in California, and the EPA or other regulation thereof, please weigh in. I'll also do some more research.

tmckenzie said...

Is it buyer beware when it comes to real estate in KY?

NB said...

Copycats have popped up already. Frankfort residents are suing Buffalo Trace and Jim Beam for the same thing...

Anonymous said...

I live across the road from 4 Roses warehouses and my home, children's outside toys, outdoor furniture, maiboxes, trees, etc are covered with this black...whatever it is. I asked the EPA to at least let me know if it was harmful to my family and after an initial investigation, all I got was an anonymous typed letter telling me that bourbon distillers in KY are good neighbors and bring in tax dollars. Really? Because as a state employee who hasn't had a raise in 7 years and now has 6 furlough days every year, I have to ask where all these tax dollars are going? Maybe I can get a second job typing anonymous letters for the distilleries?? I wish the people filing this suit in Louisville all the luck in the world, but I feel they are fighting a losing battle.

Chuck Cowdery said...

I live near Wrigley Field, but not right across the street. When people move in across the street from Wrigley Field, then complain about the noise and the crowds, they don't get a lot of sympathy. Or if you buy a house next to an airport, same thing. The warehouses, the whiskey, and the fungus, were all there when you bought the house.

Michael Kreisle said...

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