Diageo Sues Tennessee And Heaven Hill

By Richard Thomas

Diageo opened Round Two of the Tennessee whiskey battle by going to court last Friday, filing a lawsuit in Federal Court against Tennessee Alcoholic Beverage Commission Director Keith Bell according to Courthouse News Service. The London-based drinks giant is seeking to overturn a 1937 law that prohibits Tennessee liquor-makers from storing and aging their products anywhere but the county in which it was made. That law was amended in 2013 to allow adjacent counties to be used as well.

Diageo owns George Dickel, Tennessee’s #2 whiskey-maker, which is located in Normandy in Tennessee’s Bedford County. Under the law as it has existed since Dickel’s post-World War Two refounding, the distillery’s whiskey could only be aged in Bedford County, and was indeed aged in warehouses located in the densely forested hills surrounding the famous Cascade Hollow. After last year, Dickel could build warehouses in surrounding counties if it so chose.

Now Diageo is claiming the law is unconstitutional, violating the U.S. Constitution’s 14th Amendment by discriminating against liquor-makers who have facilities outside the state of Tennessee by preventing the use of those facilities. Being allowed to age Tennessee whiskey outside the state of Tennessee was also a key feature of Diageo’s recent, failed attempt to amend the 2013 Tennessee whiskey law.

Yet this is not the only lawsuit Diageo started last week. The company filed suit in Canada’s Federal courts against Kentucky distiller Heaven Hill for trademark infringement, claiming Heaven Hill’s Admiral Nelson’s Spiced Rum was too similar to Diageo’s Captain Morgan.

Diageo’s two new lawsuits put the drinks company in what is now a very litigious time, since they were already fighting off a trademark lawsuit of their own by The Explorer’s Club of New York, who object to the name of the Johnnie Walker Explorer’s Club scotch, a duty free shop expression first released in 2012.