CA6 interprets literal falsity narrowly but says materiality implements the standing requirement, yay

Victory Global, LLC v. Fresh Bourbon, LLC, --- F.4th ----, 2026 WL 836221, No. 25-5173 (6^th Cir. Mar. 26, 2026)

Lower court decision discussed here.

Victory Global, d/b/a Brough Brothers claims to have become the “first” African American-owned company to distill bourbon when it opened its physical distillery in 2020. But Fresh Bourbon counters that it was the “first” because its owners physically distilled their brand at another company’s distillery two years earlier. Brough Brothers sued for Lanham Act false advertising, but failed to identify any unambiguously false statements or evidence of deception. The court of appeals affirmed the grant of summary judgment to Fresh Bourbon.

Brough Brothers sold their its batch of bourbon under the Brough Brothers label in 2020. The bottles truthfully disclosed that they were distilled in Indiana. On New Year’s Eve in 2020, they distilled their first bourbon in Kentucky.

Fresh Bourbon distilled using another distillery’s space starting in 2018; eventually, Fresh Bourbon’s employees knew what they were doing and got “free reign” [sigh] of the Hartfield distillery. It first sold its bourbon made at Hartfield in 2020, using Hartfield’s federal license to sell to distributors. The label stated: “Distilled and Bottled by Buchanan Griggs Inc. Paris, Kentucky For Fresh Bourbon Distilling Company[.]” Fresh Bourbon owned the recipe for this bourbon, and Hartfield agreed not to make it for others. Eventually, Fresh Bourbon opened its own distillery and distilled its first batch either in late 2022 or in early 2023.

“Given that Brough Brothers and Fresh Bourbon developed side by side, various sources have made different claims about who came first.”

“If a defendant makes a literally false statement, the defendant can identify no possible framing in which one could consider the statement true.” [This is an overstatement—we can always imagine secret definitions that make a statement true.]  By contrast, a misleading statement “requires a reader to engage in some mental processing to determine its truth or falsity.” [Also wrong: the whole point of falsity/misleadingness is that the reader does not know the truth by way of the statement. A misleading statement requires some inference that leads the reader to a false conclusion; the mental processing is the process of determining what the statement is saying.] “If, for example, an ambiguous statement is true under one interpretation but false under another, the statement qualifies as potentially misleading (not literally false). The same rule covers a technically true statement that lacks important details.”

The court noted that other circuits have split over whether the false/misleading line matters to materiality. Now here’s a line I like a lot: Materiality “implements the statutory causation requirement because a business is not ‘likely to be damaged’ from a claim that will not affect a consumer’s decision on which product to buy.” The court declined to weigh in on the split here (correctly recognizing that the Fifth Circuit had mistakenly cited it as already having resolved the issue; indeed, the Fifth Circuit cited its misunderstanding of other courts’ holdings as the reason it adopted a separate-evidence-for-materiality requirement; the split emerged from a game of Telephone).

Anyway, Brough Brothers bet it all on literal falsity. But none of the categories of challenged statements met the “high” bar for literal falsity.

First: The first to African Americans to “distill,” “produce,” or “develop” Kentucky bourbon since the Civil War. For example, Fresh Bourbon’s profile on X called the company’s bourbon the “first ... developed grain to glass by African Americans in the state of Kentucky.”

Brough Brothers’ expert conceded that it was “impossible to verify” whether other African American distilleries existed before these two companies because of the history of ignoring Black history. “At least with respect to other bourbon makers, then, Fresh Bourbon’s statements are not ‘verifiable’ as false on this record.” So the alleged falsity was the message that Fresh Bourbon made bourbon at its Lexington distillery before Brough Brothers made bourbon at its Louisville distillery, when the truth was that Brough Brothers obtained its distilling licenses and made its first batch of bourbon at its own distillery in December 2020 before Fresh Bourbon completed the same tasks years later. “If, then, the challenged statements unambiguously suggested that Fresh Bourbon opened its physical location before Brough Brothers, they would likely be literally false.” 

But there was another “reasonable” reading [applying the correct standard rather than the “any reading” standard]: “that Fresh Bourbon’s agents made its Kentucky bourbon first—no matter the physical distillery at which it did so.” And that was true. Fresh Bourbon’s founders participated in the distilling process at the Hartfield distillery starting in 2018. During this time, Brough Brothers sourced their bourbon from Indiana and did not help this producer in the distilling process. Under these circumstances, there was ambiguity.

Brough Brothers argued that a party does not “distill,” “produce,” or “develop” bourbon unless the party obtains licenses to open a distillery.

But this technical claim has no place in the “literally false” calculus—which requires a “bald-faced” lie. Fresh Bourbon’s use of these verbs does not meet that high standard. In ordinary language, one would naturally say that a party distilled or produced bourbon when the party put the raw materials into a still and took the other steps necessary to create the alcoholic beverage at the end.… These verbs also would remain accurate even if the party lacked a license.

The legality claim thus “conflicts with the ordinary understanding of the words.” And the facts showed that Fresh Bourbon’s team did more than buy bourbon on Hartfield’s license; they physically participated in the distilling.

Second: “[C]onsidered to be the first black-owned distillery in Kentucky.” This phrase came from the Kentucky Senate’s resolution praising Fresh Bourbon in February 2020, to which Fresh Bourbon’s website links. Brough Brothers argued that it opened its Louisville distillery before Fresh Bourbon opened its Lexington one, making this literally false.

But there was no evidence that Fresh Bourbon itself ever claimed to have opened the first African American-owned distillery in Kentucky. That the Kentucky Senate “considered” it to be the first, even if misleading, wasn’t literally false. Also, “distillery” could mean different things in different contexts. Although both dictionaries and Kentucky law define the term as meaning a place where distilled spirits are made, “consumers do not necessarily flip open a dictionary or check statutes when evaluating products.” And Fresh Bourbon introduced evidence that companies often call themselves a “distillery” even when they are “having a spirit bottled for” them by others. Brough Brothers itself registered the name “Brough Brothers Distillery” in 2018—years before it opened its physical location. The resolution itself suggested that this was how the Kentucky Senate used the term, because it stated elsewhere that Fresh Bourbon had “announced that they plan to build” a physical distillery in Lexington. “[I]t would have made little sense for the resolution to refer to Fresh Bourbon’s (unconstructed) venue as the first.” Under the understanding of “distillery” that means a company that sells bourbon, Fresh Bourbon sold Kentucky-made bourbon while Brough Brothers still sold Indiana-made bourbon, so that was true.

Brough Brothers argued that Fresh Bourbon drafted the resolution and was thus responsible for it, but the Senate didn’t use the language that they drafted, which didn’t include the challenged statement. Thus the court didn’t resolve the question of whether a state Senate resolution could be attributed to a private party for Lanham Act purposes.

Likewise with other claims; the Senate resolution also said that Fresh Bourbon “produces bourbon in the state of Kentucky with an African American Master Distiller, the first in Kentucky since slavery[.]” Brough Brothers argued that this statement was literally false because the putative master distiller lacked the qualifications: “20+ years of experience operating a distillery,” according to its expert. The putative master distiller “worked full time at a bank and merely had an interest in bourbon as a hobby before he took the job with Fresh Bourbon.” But the record showed that whether a producer qualifies as a “master distiller” was opinion not fact; as one witness said, the term is “more of a symbol” that some distillers coined in their marketing to become “rock stars with the bourbon people.” He testified that there is “no set experience level” or “no set anything” for that matter; the claim that a master distiller must have 20 years’ experience would disqualify Brough Brothers’ own master distiller. Brough Brothers’ expert conceded that it “[b]asically” boils down to “a matter of opinion,” which is fatal to a Lanham Act claim.

The court also declined to hold that these statements added up to falsity by necessary implication. Unfortunately casting doubt on whether the circuit actually recognized the doctrine, it understandably refused to “combine statements from different sources into one ‘overall marketing scheme.’” Context is vital, but “we have never treated every advertisement that a business has ever made as the relevant ‘context.’” Even considered together, however, the challenged statements were still ambiguous.