Washington- The Supreme Court said Monday it will review the constitutionality of a nearly 160-year-old federal ban on distilling alcohol at home.
The proceedings in this case, known as Department of Justice v. McNutt, will likely take place next year, and a decision will be made by late June or early July.
For more than a century, Congress has restricted the location of distilleries to prevent tax evasion. Under the law at issue in the case, enacted in 1868, “a person may not produce distilled spirits at home for his or her personal use.” Any person who uses or possesses stills or any other equipment to produce distilled alcohol in “any dwelling house” or shed, yard or enclosure may be subject to criminal penalties.
Violators face fines and up to five years in prison. The offender’s home and property are also subject to confiscation.
Congress approved the restrictions after determining there was widespread tax evasion by commercial distillers. At that time, the tax rate on spirits was $2 per gallon, more than their market price, and commercial distillers found it cheaper to bribe tax officials than to pay the tax, according to an 1867 House of Representatives report. Lawmakers determined that “at least seven out of eight” spirits were not taxed at the time.
The legislation that would ultimately ban craft distilling reduced the tax rate and required duties to be paid before the spirits were removed from warehouses. There are no exceptions for distilled spirits intended for personal or family use.
The dispute over the long-standing ban on home distilling was brought by the Hobby Distillers Association and one of its members, who wants to distill spirits at home and argued that the ban on home distilling exceeded Congress’s enumerated powers, including its taxing power. A federal district court sided with the plaintiffs and ruled the ban unconstitutional.
Location restrictions passed by Congress in the 1800s “criminalize the conduct of persons not subject to the tax” and do not “touch the product to be taxed,” the district court said.
The U.S. Court of Appeals for the 5th Circuit later upheld much of that ruling and said limits on home distilling are not “clearly tailored” to support the government’s taxing power, since the restrictions reduce revenue by prohibiting people from making distilled spirits that could be taxed.
The 5th Circuit said upholding the ban would allow Congress to “criminalize almost any conduct within the country solely because it has the ability to conceal taxable activity.”
In urging the Supreme Court to take up the case, Solicitor General D. John Sauer argued that the lower court’s decision striking down the ban was “erroneous.”
Congress, he wrote in his appeal, restricted home distilling “because a distiller can more easily conceal a distilling operation or thwart necessary inspections – thereby avoiding the required tax – if the still is located in a dwelling house or related structure.”
Lawyers for the would-be distillers agreed that the Supreme Court should step in and decide the constitutionality of the ban, which they say exceeds Congress’s power under the taxation and necessary and proper provisions of the Constitution.
They warned in court papers that “there is no limit to the government’s power to criminalize local conduct that may conceal taxable activities.”
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