Supreme Court takes up federal ban on home distilling

The U.S. Supreme Court agreed Monday to decide whether Congress can ban people from distilling spirits at home, taking up a federal law dating to the 1860s that a federal appeals court struck down this year.

The court granted review on Oct. 19 in Department of Justice v. McNutt, No. 26-204, according to the court’s Oct. 19 order list. The ban is punishable by five years in prison, a $10,000 fine and forfeiture of the offender’s home, according to a petition filed by a separate challenger, John Ream, as described by the National Constitution Center.

The law, 26 U.S.C. 5178(a)(1)(B), bars distilling spirits in a dwelling house or in a shed, yard or enclosure connected to one. The question for the justices is whether the ban is “necessary and proper for carrying into execution Congress’ enumerated power to lay and collect taxes,” the wording used in the government’s petition as quoted by SCOTUSblog and the Constitution Center.

The case began when Scott McNutt bought distilling equipment and received a letter from the federal Alcohol and Tobacco Tax and Trade Bureau warning that unlicensed distilling is a crime, John Elwood wrote for SCOTUSblog on Oct. 14. A federal court in Texas blocked enforcement of the ban against McNutt and the Hobby Distillers Association and its members.

The U.S. Court of Appeals for the Fifth Circuit upheld that injunction, reasoning that a ban “reduces taxable activity rather than helping to collect the tax,” Elwood wrote, so it is not “plainly adapted” to collecting taxes under the 1819 precedent McCulloch v. Maryland. The court denied a request for a rehearing by the full circuit without a noted dissent.

The Sixth Circuit reached the opposite result in Ream’s case, according to the National Constitution Center. Ream, a former home brewer and brewpub owner from Newark, Ohio, wants to distill whiskey at home. A divided panel ruled in April that he had standing and upheld the ban, reasoning that it shifts consumption toward commercial spirits that are less prone to tax evasion. Judge Andre Mathis dissented on standing.

The split between circuits is one reason the court took the case. Elwood noted that the justices usually grant review when a court of appeals has invalidated a federal statute, and that this was “a rarity” because “everyone agrees the court should take a case.” Ream’s petition calls the ban “a relic of Reconstruction-era politics.” The Constitution Center reported that the government no longer defends the law under Congress’s power to regulate commerce and relies on the taxing power instead.

Ream’s petition, No. 26-93, was still pending when SCOTUSblog reported on Oct. 14. We did not find a ruling on it in the Oct. 19 order list. No argument date had been set in the sources reviewed. Cases granted at this point in the court’s term are typically argued in the new year.

The grant was one of two announced Monday. The court also agreed to hear a challenge to lottery-based admissions at competitive magnet middle school programs in Montgomery County, Md. It follows a string of high-profile orders this month, including the court’s decision to take up the Trump administration’s no-bond detention policy and its refusal to hear a fired labour board member’s appeal.

The dispute is a U.S. constitutional question and has no direct effect on Canadian law. The Dorsey & Whitney law firm also summarized the Oct. 19 grants in a client alert.

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