Bourbon and law might seem, to the casual observer, to be connected only in negative ways: Prohibition, illegal stills, and organized crime. While nostalgic in many respects, those connections focus on lawlessness. Lawlessness, however, is the mere tip of the proverbial iceberg for bourbon—the real history of bourbon, hidden beneath the surface, is the foundation of American commercial law and its relation to American history as a whole. Indeed, bourbon justice tells the history of America through the development of commercial laws, guiding our nation from an often reckless laissez-faire mentality, through the growing pains of industrialization, past the overcorrection of Prohibition, and into the tranquility of finally becoming a nation of laws.
American history and bourbon history have each told their separate stories, occasionally intertwined, but never have their connected stories been told exclusively through lawsuits. So much of bourbon history has been lost, sometimes because records and accounts were not kept and other times because records and accounts were swept away during Prohibition. Distillers from the 1800s and early 1900s did not trouble themselves with memorializing their craft for anyone other than a son or apprentice, and first-person accounts are rare. Because of this lack of traditional historical evidence, lawsuits are an abundant resource not just for information but for facts that satisfied rigorous evidentiary standards or withstood the pressure of cross-examination and were found to be reliable. Lawsuits might be the best source of facts. That is why, with only a few exceptions, every source cited in Bourbon Justice is a lawsuit, statute, or regulation.
But why use bourbon law to tell American history? Arguably, no single commodity has contributed more to the development of American legal history than bourbon. Therefore, bourbon and bourbon law trace the development of the United States as a nation, from conquering the wild frontier to rugged individualism to fostering the entrepreneurial spirit to establishing a nation of laws. Bourbon—and whiskey more generally—helped shape the growth and maturation of many substantive areas of the law, like trademark, breach of contract, fraud, governmental regulation and taxation, and consumer protection.
Why not use brandy, rum, or even wine, which all predate bourbon, to tell this story? Not only do these other spirits and wine fail to have a meaningful presence in American legal history; none of them are distinctively American.1 Only bourbon can claim that title; it is distinctively—and legally—American. Congress did not officially recognize this distinctiveness until 1964, but bourbon had certainly been uniquely American since the first drop of majority-corn distillate was barrel aged. Bourbon is distinctively American because Americans are often celebrated as entrepreneurial mavericks. Historically, we have aspired to greatness, we have been ruggedly independent, we have been resourceful, and we have been highly competitive. Because of those characteristics, Americans have flouted the law when it was deemed necessary, lobbied for new consumer protection laws or self-interested protectionism laws, and strategically stretched and used laws to gain an advantage over the competition. Bourbon history covers each of these bases.
We Americans have also not been great fans of paying taxes. After winning a war over taxation without representation, farmer-distillers in Pennsylvania rebelled against the young nation’s first internal tax,2 and many scattered southwestward to the Kentucky frontier in 1794, where immigrants had already established themselves as Kentuckians and as distillers. Kentucky County, Virginia, had recently been formed in 1776, and the establishment of Fort Nelson in 1778 in present-day Louisville, followed by the city of Louisville in 1780, provided safety and a hub for wilderness and river commerce. With the end of the Revolutionary War and the Treaty of Paris in 1783, safe passage to Kentucky was a reality, and families like the Samuels, Beams, Hadens, and Wathens arrived. Statehood followed in 1792, and Kentucky was primed to be a whiskey-distilling powerhouse.
Freedom and survival—combined with bountiful natural resources, fertile soil, fresh limestone-filtered water, and perfect weather—proved to be the mother of bourbon. At its height reports claim that over two thousand farmers were also active distillers in Kentucky. Not only did whiskey provide a source of income for these farmers, but it also provided an exchange for barter transactions, it developed into a loose form of currency, and as transactions became more sophisticated, it served as a commodity backing negotiable instruments.
Over time these farmers with entrepreneurial spirit found it economical to distill on a larger scale, and then, of course, entire families joined the business, and investors provided capital for expansion. One of the earliest family dynasties was the Wathen family. Often relegated to footnotes today, members of the Wathen family were early whiskey pioneers, with Henry Hudson Wathen settling near Lebanon, Kentucky, in 1788 and starting a distillery by 1790. The second Wathen generation (Richard Bernard Wathen) built a bigger distillery, and his five sons each joined the distilling business. One of them, John Bernard Wathen, moved to Louisville to build the J. B. Wathen & Brother Distillery, one of the biggest distilleries of the time. Not only were the Wathens pioneers, but they also showed remarkable survival instincts and business savvy by forming the American Medicinal Spirits Company, which thrived during National Prohibition (January 1920–December 1933) and exited Prohibition as an industry leader. The Wathen family can tell the American dream story as well as anyone—each generation doing better than the previous one.
Some entrepreneurs bit off more than they could chew, like the Hope Distillery in Louisville, which was built between 1816 and 1817, with previously unheard-of capacity. Its 1,500-gallon and 750-gallon stills reportedly could produce over 1,200 gallons of whiskey per day. But the nation was not ready for this mass capacity, so the Hope Distillery failed and was abandoned by 1821. Other commercial distillers experienced wild success. But wild success was often accompanied by catastrophic losses. Even successful commercial distillers experienced the highs and the lows of the market, sometimes in less-than-honorable fashion. For instance, one of the most famous figures in bourbon history, Col. Edmund Haynes Taylor Jr., sold the same barrels twice in 1877 and had to physically leave Kentucky to avoid creditors.3
Throughout this time of boom and bust, however, bourbon and America were growing up together. The success of bourbon and American’s insatiable thirst for whiskey opened the door for another American tradition: scammers. In a more charitable light or in their best incarnation, these entrepreneurs were just “innovating” to meet market demands, and some were even honest. In 1853 Pierre Lacour published The Manufacture of Liquors, Wines and Cordials without the Aid of Distillation, which contained a recipe for “Old Bourbon Whiskey” that blended neutral spirits, simple syrup, tea, oil of wintergreen, tincture of cochineal (a bug that when crushed provided red coloring), and burnt sugar. Similarly, in 1885 Joseph Fleischman published The Art of Blending and Compounding Liquors and Wines, which contained a variety of recipes that could be passed off as bourbon and rye, mostly involving neutral spirits, prune and other juices, tea, simple syrup, and coloring. Scammers could sell this “rectified” liquor as “bourbon.”
There was also a dirty underbelly of rectifiers who used hazardous additives, including sulfuric acid.4 Regardless of the methods, whiskey rectifying was big business. The Kentucky Court of Appeals, in E. H. Taylor, Jr. & Sons Co. v. Marion E. Taylor, even recognized that rectified or blended whiskey was more popular than straight whiskey.5 Colonel Taylor was instrumental in changing that tide, running rectifiers out of town through relentless lawsuits, and in passing the Bottled-in-Bond Act of 1897—which, remarkably, was the nation’s first consumer protection law.6 When rectifiers persisted in misleading consumers even after passage of the act, President William Howard Taft took the unprecedented step, in 1909, of formally defining “straight,” “blended,” and “imitation” whiskey to further protect the public and to provide assurances that the public could know exactly what they were buying and drinking.
Both before and after the Bottled-in-Bond Act, straight bourbon whiskey gained some of its fame in part because of who drank it, perhaps showing that Americans have always had a fascination with celebrity trends. Various reports claim that Ulysses S. Grant, Henry Clay, and Mark Twain were avid bourbon fans, particularly of Old Crow. President Truman’s morning routine reportedly involved a shot of bourbon. Many brands today still closely align themselves with celebrities (Wild Turkey and Matthew McConaughey or Jim Beam and Mila Kunis) or try a subtler approach of product placement (Bulleit in HBO’s Deadwood).
No celebrity could prevent the drama of National Prohibition, which destroyed the farmer-distiller and small operations, consolidating ownership with a handful of industrialists, and turned much of bourbon’s rich history into embarrassing family baggage. The most politically savvy and best-funded industrial distillers secured their futures with government-approved medicinal licensing. The rest of the distillers, without medicinal licenses, were mothballed or torn down.
After Repeal in 1933, however, bourbon was back at the forefront of developing law. America was in a new industrial age, and competition was fierce. Distilleries that had been shuttered and neglected during Prohibition were being renovated and fired up. New entrepreneurs and investors were looking for names that harked back to pre-Prohibition memories. The companies that survived Prohibition had an advantage both with production capacity and the all-important stock of aged whiskey, but the new “little guys” were nipping at their heels. Some of these new distillers, however, tried to use the names and goodwill of established brands to promote their new brands.7
The growing industry meant that the nation needed laws again, this time not so much for consumer protection but for business protection. Bourbon law led the charge with new developments in trademarks, trade names, and unfair competition law. Bourbon litigation clarified that trade names are protectable beyond just a company’s line of business.8 Bourbon litigation also clarified when a person could use a family surname or not.9 And it strengthened truth-in-labeling laws that it had prompted in the 1800s.10
Bourbon’s popularity subsided after it was designated as a distinctive product of the United States, and it hit rock bottom in the 1980s. Vodka and wine coolers ruled the day, and there was very little interest in bourbon. The historic Ancient Age Distillery (now Buffalo Trace) in Frankfort, Kentucky, was in danger of closing. It employed only fifty people in 1991, and despite the successful launch of Blanton’s Single Barrel bourbon in 1984, things looked bleak. But the resurgence was practically around the corner for any distillery that could survive. Many, however, did not.
Heaven Hill Distillery set the groundwork for bourbon’s turnaround in 1986 with its release of Elijah Craig 12 Year—the first “small batch” bourbon—named after the Baptist preacher credited through legend as the first distiller to age his whiskey in charred oak barrels. Later, in 1995, Heaven Hill helped revive appreciation for bottled in bond bourbon, with its release of Henry McKenna Bottled-in-Bond single barrel bourbon.
Louisville-based Brown-Forman Corporation, which traces its roots to 1870, when George Garvin Brown started J. T. S. Brown and Brother to sell Old Forester, also helped foster bourbon’s rebirth when it repurchased a small, scenic distillery in Woodford County, Kentucky. In 1996 Brown-Forman introduced Woodford Reserve bourbon and reintroduced the world to the all-but-forgotten Labrot & Graham Distillery and the history of Oscar Pepper and James Crow.
Bourbon was staging a comeback, and a resurgence of litigation came with it to help shape current-day trademark and commercial rights. A certain well-known dripping red wax brand broke new ground while protecting itself against an even better-known tequila giant (and its global spirits owner).11 And bourbon lawsuits are now defining standards of practice for the entire spirits industry for labeling and truth-in-advertising issues.12
Just as there are no shortages of old bourbon lawsuits to tell the story of American history, bourbon remains at the forefront of present-day litigation. Bourbon distillers have always found the right balance between innovation and tradition and mixing Kentucky charm with cutthroat litigation, which makes telling the history of America through the lens of bourbon lawsuits all the more entertaining.