Damaging Ethanol Fume Fungus at the Center of a Newly Settled Lawsuit Involving Cruzan and Captain Morgan Rums

(Photo: monticello/Shutterstock)

Two of the U.S. Virgin Island’s biggest rum producers, Diageo’s Captain Morgan and Cruzan, reached a settlement in a lawsuit involving property damaging ethanol fume fungus. Lawyers representing people affected by the fungus said the rum titans agreed to a cash settlement on Dec. 29. 

According to The Source, the settlement has Diago USVI selling its rum aging warehouses. The resulting funds will be part of the compensation for the people affected by the fungus. 

The scientific name for this fungus is Baudoinia compniacensis. It is also known as whiskey fungus or rum fungus and tends to colonize in places with airborne alcohol like the ethanol fumes produced when aging spirits. It is black and sooty and can sometimes spread miles away from the barrels where the aging occurs. 

The complaints about the fungus started in 2013 and a year later a lawsuit began with both Diageo and Cruzan. 

An attorney for St. Croix residents, Warren Burns said, “They dispute all the facts that we’ve alleged, as you’d expect them to. When all is said and done, the settlement will approach, hopefully, nearly $10 million.”

The dollar amount for individual payouts will depend on the number of claimants. Properties owners or renters in the Williams Delight, Estate Cane, Enfield Green or Estate Diamond since April 29, 2007, could be eligible, as reported by The Source.

Burns said, “In this case, we’re fortunate that we have a pretty robust database of property owners, which we will be using to do direct mail notice. Every property owner will get a piece of mail that explains their rights and their ability to make a claim in the settlement or opt out of the settlement.”

In another case, a homeowner in Tennessee claims Jack Daniel’s is building warehouses that create an out-of-control fungus resulting in property damage. In this case, the homeowner Patrick Long has not yet taken his complaints to the courts. After the people of the U.S. Virgin Islands win in court, there could be a precedent set for further lawsuits against alcohol brands with large spirit aging facilities. 

A final hearing in the Diago and Cruzan lawsuit is set for Mar. 30, when a judge will decide the fairness of the settlement. 

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