The Supreme Court Took the Home-Distilling Case the Government Picked, Not the One Ream Filed

On October 19 the Supreme Court granted the Justice Department's petition in United States Department of Justice v. McNutt, No. 26-204, which will decide whether the federal ban on distilling spirits at home is a necessary and proper way to collect the tax on whiskey. The Court did not take up the better-known petition, Ream v. Department of the Treasury, No. 26-93. The Solicitor General had asked it to hold that one, and news coverage describes it as held, while the McNutt docket records only the grant.

What the statute does

Under 26 U.S.C. 5178(a)(1)(B), a distilled-spirits plant may not be located "in any dwelling house" or "in any shed, yard, or inclosure connected with any dwelling house." Section 5601(a)(6) attaches the penalty to anyone who uses, or possesses with intent to use, a still for producing spirits in a prohibited place: a fine of up to $10,000, up to five years in prison, or both. The federal tax on a spirit attaches as soon as it is "in existence," under 26 U.S.C. 5001(b), so the location rule exists to keep the thing being taxed where an inspector can reach it.

The location rule traces to the 1866 revenue act and was extended in 1868. According to the government's brief in Ream, a House select committee at the time estimated that "at least seven-eighths" of the spirits made had escaped taxation, and the Treasury Secretary's 1866 report described small stills hidden in the garrets and cellars of cities.

Why the government chose McNutt over Ream

John Ream wants to distill whiskey at home and sued before any enforcement, in the Southern District of Ohio. He had not bought a still, had not applied for a distilling permit, and had not received a warning letter from the Alcohol and Tobacco Tax and Trade Bureau, the government's brief says. The district court dismissed for lack of standing. The Sixth Circuit, in an opinion by Judge Kethledge, found standing and upheld the ban on April 21. Judge Mathis dissented only on standing, writing that Ream had shown no credible threat of enforcement.

Scott McNutt's record is different. He owned a still he used to legally distill fuel alcohol, received a "Notice of Potential Civil and Criminal Liability" from the bureau, and was told by an employee that he "could not acquire [a] permit[] to distill at home," the brief says, quoting the Fifth Circuit opinion. The Hobby Distillers Association, a membership group, also has standing in that case, which the government says protects against mootness.

The government made a second choice in plain view. Ream's petition spends most of its pages asking the Court to overrule or narrow Gonzales v. Raich, the 2005 Commerce Clause decision. The brief answers that neither lower court addressed the commerce power and that the government "is no longer advancing that theory." What reaches the Court is the narrower taxing-power question.

The two readings of the same history

The Sixth Circuit held the ban "plainly adapted" to collecting the tax, reasoning that stills are more easily hidden in homes than in bonded distilleries, per the government's quotation of the opinion. The government's brief describes the Fifth Circuit as holding the opposite for a different reason: that the restriction is not necessary and proper because it reduces revenue by prohibiting taxable conduct. A person who cannot make whiskey at home pays no tax on it.

Ream's lawyers at the Buckeye Institute press the same point from the other side. Their case page says Ream is prepared to get licenses and pay taxes "after he wins his case and can legally distill at home." Ream himself told Yahoo News he does not want to break the law but objects to "this level of intrusion into my home and hobbies."

What the grant does and does not settle

A grant is not a ruling. The government's brief notes that the Court's "usual" approach is to take cases in which a court of appeals holds a federal statute unconstitutional, so the vote itself says little about the outcome. This account of the Fifth Circuit's reasoning comes from the government's description of it and from news coverage, not from a reading of the 173 F.4th 204 opinion, so the exact holding is worth checking against the text once briefing starts.

The practical effect is already uneven. The Fifth Circuit covers Texas, Louisiana and Mississippi, and the Sixth covers Kentucky, Michigan, Ohio and Tennessee. In each group the same federal statute now has a different answer, at least until the justices decide. Yahoo News reports that argument is likely in early 2027 and a ruling expected that summer, with Ream likely to be sent back to the lower courts after McNutt is decided.