Justins’ House of Bourbon: Potential conflict of interest forces change to Kentucky case

Janet Patton
·4 min read

A hearing officer scheduled to hear the Kentucky Department of Alcoholic Beverage Control’s case against Justins’ House of Bourbon is off the case.

Why? Because he has a potential conflict of interest: The value of his own bourbon collection could be impacted by the ruling.

According to an order with the Public Protection Cabinet, which is the parent agency of the ABC, Shawn Chapman, the executive director of the cabinet’s Office of Administrative Hearings, voluntarily withdrew from the case on Feb. 21.

A new hearing officer, Jesse L. Robbins, has been assigned, according to a Feb. 22 order issued by the cabinet.

In the recusal, Chapman said that “it is well known that certain rare, older, or otherwise collectible bottles of bourbon and other distilled spirits can be quite valuable, which has led to various black markets where unlicensed persons sell the bottles for many times their retail cost. ... One of the legal questions in (the Justins’ House of Bourbon) case is whether certain bottles of rare or older distilled spirits, including brands and bottlings that are still currently or regularly produced but are rarely available from a wholesale, constitute “vintage distilled spirits” that may be legally sold by an unlicensed person.”

A closed sign on the front door of Justins’ House of Bourbon at 601 West Main St. in downtown Lexington, photographed Jan. 19, 2023. The vintage liquor was raided by the ABC after “complaints alleging several violations associated with Justin’s House of Bourbon for the improper acquisition, possession, transport, and sale of bourbon, including Vintage Distilled Spirits.” The case is still ongoing.

Chapman’s personal bourbon collection apparently includes such bottles.

Chapman said in his recusal that “if this case proceeds to a hearing on the merits, it will likely set precedent that will affect the value and salability of those bottles.” He said he had previously disclosed to the parties in the case that “he owns a collection of bourbon bottles, some of which may qualify as vintage distilled spirits, depending on how the statutes at issue are interpreted and applied. Thus this action will likely affect the value of bottles owned by the hearing office — and whether those bottles may legally be sold at all. This creates at least the potential for a conflict of interest.”

Latest update on ongoing Kentucky vintage bourbon case

The Justins’ House of Bourbon case has been going on for more than a year; ABC agents raided two stores in Kentucky and while District of Columbia agents raided a storehouse in D.C. in January 2023.

Two of the owners of Justins’ House of Bourbon are suing Kentucky ABC in Franklin Circuit Court, attempting to have the case tossed out and their sales of rare and valuable but not old spirits declared legal.

More than 600 bottles, including bottles of Blanton’s and Weller premium bourbons, seized by the state have been returned to Justins’ House of Bourbon, which is still barred from selling them while the administrative case is pending.

More than 600 bottles of bourbon seized by Kentucky Alcohol Beverage Control in January 2023 from Justins’ House of Bourbon’s stores in Lexington and Louisville have been returned. But the vintage retailer still can’t sell them.
More than 600 bottles of bourbon seized by Kentucky Alcohol Beverage Control in January 2023 from Justins’ House of Bourbon’s stores in Lexington and Louisville have been returned. But the vintage retailer still can’t sell them.

The vintage whiskey seller has alleged that a bottle worth $100,000 and another that is “near-priceless” were damaged while in state custody; the ABC disputes that.

Earlier this month, Franklin Circuit Court Judge Thomas D. Wingate again declined to act on Justins’ House of Bourbon’s motions but said that “the Court understands Plaintiffs’ frustrations with the longevity of the administrative process. The Court directs the agency to expedite this matter.”

Potential new Kentucky law could impact vintage bourbon stores

Meanwhile, Kentucky lawmakers are considering legislation designed to make large-scale vintage sales and purchases of rare bourbons illegal. The bill would reform aspects of Kentucky Vintage Distilled Spirits Act passed in 2018 to allow private citizens to sell bottles to retailers, bars or restaurants.

House Bill 439 would make it a Class A misdemeanor crime for a first offense punishable by up to a year in jail, and a Class D felony crime, punishable by up to five years in jail for each subsequent offense, to sell more than 24 bottles in a year or to buy more than 24 bottles in a year from the same seller.

Justin Thompson, left and Justin Sloan, right, in the vintage bourbon room at their Justins’ House of Bourbon at the corner of Jefferson and West Main streets. Many of the bottles came from their personal collections.
Justin Thompson, left and Justin Sloan, right, in the vintage bourbon room at their Justins’ House of Bourbon at the corner of Jefferson and West Main streets. Many of the bottles came from their personal collections.

In 2023, the Herald-Leader analyzed Vintage Distilled Spirits sales reported to the Kentucky Department of Alcohol Beverage Control and found some individuals sold hundreds of bottles to retailers over the five years since the Vintage Distilled Spirits Act was passed.

The legislation would cap the number of bottles of popular bourbons such Blanton’s, Weller and Pappy Van Winkle that could be “flipped” to vintage stores such as Justins’ House of Bourbon.