Whiskey fungus lawsuit back on track

LOUISVILLE, Ky. (WDRB) – A federal lawsuit by Louisville residents against a whiskey maker over a fungus allegedly caused by ethanol vapors pouring out of warehouses has been dismissed.

A U.S. District Court judge dismissed the suit filed against Diageo Americas Supply on Oct. 13 at the request of the company and the citizens who live near the company’s whiskey warehouses.

The dismissal did not involve a settlement and both sides agreed to pay their own court costs and attorney fees, according to records in the case.

The lawsuit, filed by business owner Bruce Merrick and several citizens, claimed a black fungus blanketed homes and businesses near bourbon distilleries, called “whiskey fungus” or Baudoinia compniacensis.

Diageo argued it should not be held responsible because it was free to release ethanol under the federal government's Clean Air Act. But an attorney for the plaintiffs, William McMurry, said they could sue under the state's nuisance law, which could be used to protect citizens against air pollution.

In 2012, the Air Pollution Control District issued two notices of violation against Diageo Americas Supply Inc., accusing it of spreading odors and "whiskey fungus."

McMurry, who has filed several similar lawsuits against whiskey makers, said he could not talk about why the suit was dismissed because it violated attorney-client privilege.

“I’m not at liberty to share strategy or my client’s decision making,” he said.

A Diageo spokeswoman released a statement Wednesday evening:

‘We are pleased that the court has agreed to the plaintiff’s request to dismiss this case.”

The plaintiffs had requested Diageo pay for property damage from the fungus and put controls on buildings that would capture and destroy the ethanol.

McMurry has brought similar lawsuits against other liquor companies – Brown-Forman Corp. and Heaven Hill Distilleries - in state court. Those cases are pending before the Supreme Court.

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