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Court order provides relief to Kentucky bourbon retailer

On Behalf of | May 13, 2024 | Business and Commercial Litigation

The Kentucky Derby this year was on Sunday, May 5. Like every other year, the derby weekend is a time when bourbon retailers hope for increased sales owing to the influx of the thousands of visitors who are in town for the Derby.

However, for one such bourbon retailer, the derby weekend could have proved to be a major missed opportunity. Fortunately, the Franklin Circuit Court ruled in favor of the retailer and provided them with a respite from legal proceedings that has affected its business since early 2023.

How it started?

In January 2023, a team from Kentucky Alcohol Beverage Control raided the bourbon retailer’s stores in Louisville and Lexington and seized more than 600 bottles of vintage spirits. The agency initiated action to cancel the retailer’s license based on nine alleged violations of state beverage laws.

The court eventually ordered Kentucky ABC to return the bottles but barred the retailer from selling those bottles. Subsequently, two of the business’s three owners filed a lawsuit suing Kentucky ABC, claiming that the agency damaged several bottles, including one valued at more than $100,000.

How is it going?

In April 2024, the retailer encountered a new challenge. An amendment to the Kentucky Vintage Distilled Spirits Act had come into effect. The amendment tightened regulations on the sales and resale of vintage distilled spirits, which includes bourbon.

Per the new regulations, all vintage spirit retailers are required to apply for a supplementary vintage distilled spirits license that costs $300. According to reports, the bourbon retailer applied for this new license on April 22 but did not hear back from the Kentucky ABC by the May 1 deadline.

With the derby weekend right around the corner, the retailer came to know that their application was on hold as the Kentucky ABC administrator is waiting for a resolution of the ongoing case (state beverage law violations) before deciding on the latest application.

The retailer requested the court for an emergency restraining order. They claimed that the “non-decision” is “not only arbitrary, but entirely retaliatory” because in 2023, the agency approved the business’s annual retailers’ license, which was the only license required at that time.

Court relief

The court provided much-needed relief to the business on Friday, May 3. It is a huge relief for the already-troubled business, especially over the derby weekend. According to news reports, Kentucky ABC, for now, will not able to take any action against the business as long as the administrative case is in progress or until there is an order from the court. The next hearing is on May 22.

Legal proceedings can be long-drawn and keeping track of everything that is happening, both on the legal and the business fronts, can be a huge task. Thus, it may become necessary take one aspect of the case at a time and resolving that aspect. This helps build a momentum that may or may not lead to success in the long run, but it is still an idea worth exploring. Small wins can lead to big victories.