Justins’ House of Bourbon sues Kentucky ABC: Where are seized whiskey bottles now?

More than a year after Kentucky alcohol regulators raided prominent vintage bourbon seller Justins’ House of Bourbon, the case in still in limbo.

Justins’ has sued Kentucky ABC over the raids and has attempted to have the case to shut the vintage seller down thrown out entirely.

A Frankfort judge returned more than 600 bottles of rare bourbons and other whiskeys but Justins’ is still barred from selling any of it.

The whiskey seller has accused the state of damaging several bottles, including one worth more than $100,000.

And one of Justins’ House of Bourbon’s owners has gone to court trying to get his own bourbon back, including one bottle signed by Julian Van Winkle.

With a hearing scheduled for Feb. 21 on a possible conflict of interest, here’s an update on how the high-profile case in the world of Kentucky bourbon started and where it stands now.

How the Justins’ House of Bourbon case started

Justins’ House of Bourbon is owned by Justin Thompson and Justin Sloan, with Lexington developer Lee Greer as a silent partner. Tom Bullock, attorney for Thompson and Sloan, did not respond to a request for comment for this story, neither did Greer. Kentucky ABC officials do not comment on open cases, according to a state spokesperson.

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At issue are more than 600 bottles of whiskey allegedly worth more than $2 million, according to Justins’ House of Bourbon.

The bottles, which included more than 70 bottles each of premium bourbons Blanton’s and Weller, were seized by Kentucky Alcohol Beverage Control agents on Jan. 17, 2023, at the Justins’ stores at 601 W. Main St. Lexington and 101 W. Market St. in Louisville.

Dozens more cases of rare and expensive bourbons including Weller and imported Blanton’s were confiscated in a simultaneous January 2023 raid at a warehouse in Washington D.C. where Justins’ operates BourbonOutfitter.com, shipping out bottles ordered online.

At the time, the raids made waves throughout the bourbon world; vintage bottle collectors and tourists frequently included stops at the stores while visiting Kentucky distillers. The Kentucky case involved “complaints alleging several violations associated with Justins’ House of Bourbon for the improper acquisition, possession, transport, and sale of bourbon, including Vintage Distilled Spirits,” according to ABC comments at the time.

How does Kentucky’s vintage spirit law work for selling antique bourbons?

The D.C. case file alleged 11 code violations including illegally transporting alcohol into the district and unlawfully obtaining product from outside the U.S. Federal alcohol investigators placed hundreds of bottles of imported Blanton’s in “voluntary detention” while the case was sorted out.

The D.C. case file said that Sazerac, which makes Blanton’s, Weller and other premium bourbons at its Buffalo Trace Distillery in Frankfort, told federal investigators the company had been dealing with a widespread counterfeit of their product and that it was originating from the Netherlands.” A federal investigator, who said an agent already was working in Kentucky on counterfeit Sazerac bourbons, told D.C. alcohol officials: “Sazerac product is more lucrative than heroin right now.”

How to spot counterfeit Pappy and other pricey bourbons, from an expert

While the case in the District of Columbia has been settled, with Justins’ House of Bourbon agreeing to pay $3,000 in fines and admitting to reduced violations, the Kentucky case has yet to be decided.

And things have gotten messy.

Justins’ House of Bourbon sues Kentucky ABC over store raids

Two of the store’s owners have been arguing in Franklin Circuit Court, so far unsuccessfully, to have the Kentucky ABC case thrown out. No criminal charges have been filed.

In August 2023, Kentucky ABC charged Justins’ House of Bourbon with nine counts of administrative violations of Kentucky alcoholic beverage laws and moved to shut down the stores, which remain open and licensed. According to the state, Justins’ House of Bourbon:

▪ Failed to report vintage distilled spirits purchases to the state;

▪ Illegally transported bottles between its two Kentucky stores;

▪ Illegally shipped bottles in and out of the state;

▪ Unlawfully bought and sold alcoholic beverages;

▪ And failed to place a sticker on vintage distilled spirits purchases on bottles to indicate they were from the secondary market.

According to the state, Justins’ also bought and sold rare bourbons that did not qualify as vintage.

Last July, shortly before the ABC notice of violation, Thompson and Sloan — but not Greer — sued the Kentucky ABC saying the bottles had been improperly seized and asked Franklin Circuit Court to declare the Kentucky Vintage Distilled Spirits law allow the purchase of rare but not necessarily old bottles.

‘Like money laundering:’ Thousands of new bourbons sold via Ky. spirits law loophole

Bourbon CEO: Kentucky vintage law fueling ‘secondary, smuggled & counterfeit’ market

Franklin Circuit Court Judge Thomas D. Wingate has so far declined to wade into the controversy over whether Kentucky’s Vintage Spirits law covers current bottles such as Pappy Van Winkle, Weller and Blanton’s as well as pre-Prohibition era whiskeys and other collectible “dusties.”

But Wingate did give Justins’ House of Bourbon one big win: The store got its bottles back. It just can’t sell them.

State admits bottles came ‘into contact with rainwater and mildew’

The move came after Wingate learned that some of the seized bottles may have been damaged in a water leak at an evidence facility in Louisville. Wingate expressed “grave concern” about the way the bottles were stored after the state “admitted that some of the seized property has come into contact with rainwater and mildew,” according to court records.

In court, Wingate questioned what would happen if the state was found liable, noting that there is a potential $200,000 cap on damages.

“They claim (the bottles are worth) $2.5 million, you got sovereign immunity. I guess he could sue the Director of the officer or something like that, right?,” Wingate said, according to a court record.

Wingate ordered the bottles be cataloged, photographed and returned to Justins’ for storage. The store is prohibited from selling or displaying the bottles and must make them available for ABC inspection at any time.

But his order made clear that this move was only to address the storage and not a ruling on the case against Justins’: “The Court’s decision to order return of the bottles to Plaintiffs for storage has no impact on the Court’s opinion on the validity of the administrative action and shall in no way be interpreted as the Court expressing opinion on the administrative action.”

All 640 bottles were transported in boxes to the Lexington store on Sept. 8, documented with photos, and signed for by Justin Sloan. The bottles then were placed on shelves in a storage area and photographed again.

Accusations of bottles damaged by Justins’ House of Bourbon

Almost immediately, both sides cried foul: The attorneys for Justins’ accused ABC board member Allyson Taylor of trying to insert a liability shield into the receipt signed for the bottles.

Wingate struck out language that specified the bottles were in “good, undamaged condition” when received.

Then Justins’ claimed, with photographic evidence in a filing, that several bottles were damaged while in ABC’s custody: “A near-priceless bottle of Old Taylor bourbon, for which there are only two known in existence ... was returned to (Justins’) wet and partially-evaporated due to leakage and/or heat exposure. Another bottle of Red Hook Rye, valued at approximately $100,000 was returned by the (state) with a cracked and destroyed wax seal ... Another bottle of Pacific Union bourbon was returned ... with damage and white scrapes all over the label ... These are just a few examples of dozens, in which the Plaintiffs’ millions of dollars’ worth of inventory suffered torn and scratched labels, obvious water damage, content evaporation or faded labels due to heat exposure, wrinkled and dented seals, and broken wax.”

However, the ABC disputed all of this and submitted its own photos, showing the same bottles as they appeared in Justins’ before they were taken into custody in 2023, with closeups of the bourbon level in the “near-priceless” Old Taylor, of the cracked wax on the Red Hook Rye, and of the scratches on the Pacific Union label.

“All the damage ... including the alleged ‘evaporation’ evidenced by the amount of spirits in the bottle of Old Taylor ... can be seen in these photographs,” the ABC responded. Two of the bottles — the Red Hook and Pacific Union — were seized from Lexington and only boxes of bottles from the Louisville store were damaged, the state said.

And while the bottle of Old Taylor 101 was seized from the Louisville store, ABC said, its investigators took the extra precaution and kept it in a safe, unopened and not exposed to rainwater.

The question of when any bottles were damaged and who is responsible has not yet been decided.

The ABC’s attorneys filed a motion for contempt against Justins’, arguing that the bottles should have been left in the boxes where they were organized by groups.

“Outside of the boxes, Plaintiffs can point to damage that existed before the bottles were seized or scuff up or otherwise damage bottles due to accidental mishandling or even deliberate actions and claim that the Department caused the damage,” the state argued.

Wingate again sided with Justins’ and denied the contempt order.

Lee Greer asks for bourbon bottles back

Perhaps prompted by concern for the bottles, in January, Justins’ House of Bourbon investor Lee Greer petitioned the court. He wanted certain bottles, including one signed by Julian Van Winkle, return directly to him, claiming that they are his personal property and extremely valuable: Two bottles of Society of Bourbon Connoisseurs (19 years); one bottle of Old Fitzgerald 12-year Blackhawk Barrel Proof; and one bottle of Old Rip Van Winkle — Van Winkle Private Selection 15 & 20 year.”

The ABC objected, pointing out that Greer “is not a party to this matter, has made no motion to intervene ... and has no standing to move this Court.” ABC also said that since all the bottles, including these, are still part of an ongoing ABC case (and that Greer isn’t a party to that either) his motion is “groundless.”

All four bottles had been on display in Justins’ Rare and Vintage Spirits room and three have price tags, with the fourth saying “Ask Ryan or Caro,” Justins’ employees, according to ABC court filings.

And if they do belong to Greer, and not to Justins’ House of Bourbon, then offering them for sale in the store would be illegal, ABC said.

This time, Wingate sided with the ABC for now, denying Greer’s motion. “The court will not entertain dividing the bottles” and making it more difficult to check on them but Wingate did put the matter on hold until the ABC case is decided.

Where does the ABC case against Justins’ House of Bourbon stand now?

In February, Justins’ House of Bourbon filed a motion asking Wingate to lift his stay issued last fall, saying that the administrative process “is an exercise in futility,” with biased decision makers.

On Feb. 16 Wingate denied the motion and kept in place the stay while the administrative process at the Kentucky Department of Alcohol Beverage Control plays out.

But Wingate said in his order that “the Court understands Plaintiffs’ frustrations with the longevity of the administrative process. The Court directs the agency to expedite this matter.”

That could be difficult, given that the state may have to find another hearing officer. Why? Because the current one has volunteered he might have a conflict of interest because he has his own bourbon collection. A conference is scheduled for Feb. 21 on the matter.

Meanwhile, Doc Crow’s, a second Kentucky vintage seller accused by the ABC of violating the Vintage Spirits law in October, last week formally admitted that the violations occurred and agreed to pay $5,000 in fines rather than face a 100-day closure.