Victory Global, LLC, doing business as Brough Brothers, sued Fresh Bourbon, LLC, for false advertising under the Lanham Act. Both companies are African American-owned and market themselves as pioneers in the Kentucky bourbon industry. Victory Global opened its physical distillery in Louisville in December 2020, while Fresh Bourbon had previously distilled its bourbon at a third-party facility, Hartfield & Co. Distillery, starting in 2018, though Fresh Bourbon did not open its own physical location until late 2022. The dispute centered on Fresh Bourbon's marketing claims, including a Kentucky Senate resolution and media articles, stating it was the 'first' African American-owned distillery in Kentucky or the first to produce bourbon there since slavery. Victory Global argued these claims were literally false because it had opened its own distillery first. Fresh Bourbon countered that it was the first to physically distill bourbon in the state, even if at another company's facility.
The Sixth Circuit applied the five-part test for Lanham Act false advertising claims, focusing on whether the statements were 'false or misleading' and whether they 'deceived' consumers. The court distinguished between 'literally false' statements, which are bald-faced lies that allow a presumption of deception, and 'misleading' statements, which require the plaintiff to prove actual consumer deception. The court analyzed Fresh Bourbon's claims and found none were literally false. First, claims that Fresh Bourbon was the 'first' to distill or produce Kentucky bourbon were ambiguous; they could be read to mean the company was the first to physically distill the liquid (which was true in 2018 at Hartfield) rather than the first to open a physical distillery (which was false). Second, the Kentucky Senate resolution stating Fresh Bourbon was 'considered' the first distillery was not literally false because the Senate did issue the resolution, and the term 'distillery' could reasonably refer to the company entity rather than the physical plant. Third, claims regarding the 'first African American Master Distiller' were deemed subjective opinions rather than verifiable facts, as the industry lacks a strict definition for the title. Because the statements were at most misleading, Victory Global bore the burden of proving they deceived consumers. The court noted that Victory Global presented no evidence, such as consumer surveys, to show that any consumers were actually deceived or that the statements had a tendency to deceive. Consequently, the court affirmed the district court's grant of summary judgment to Fresh Bourbon.
The decision reinforces the high burden on plaintiffs in Lanham Act cases involving ambiguous marketing claims. Businesses can now rely on the distinction that if a claim is not a 'bald-faced' lie, the plaintiff must produce affirmative evidence of consumer deception to survive summary judgment. The ruling leaves open the question of materiality but clarifies that without proof of deception, misleading claims cannot support a false advertising verdict. The case is remanded with instructions to enter judgment for Fresh Bourbon.
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