Beer Marketer's Insights - Pair of Parallel Home Distilling Cases Take Different Paths to Separate Circuits, Set for Split Decisions?

The same 2 attys came before separate 3-judge panels in 2 different appellate ct circuits in 2025, offering arguments in roughly similar cases brought by prospective home distillers. In each case, hobbyists sued to overturn what they say is a blanket prohibition on home distilling, claiming a fed law unconstitutionally blocks TTB from issuing a permit for a still in a home. An earlier suit coming out of Texas received a bit more attention than another case out of Ohio, brought by a professional brewer who also wishes to distill at home. District cts issued quite different rulings in response to these parallel cases, leading to fairly disparate hearings on each appeal. And tho neither panel of appellate judges appeared particularly thrilled with the performance by US attys defending fed law so far, jurists at the 6th Circuit seemed far more amenable to the govt's arguments than the 5th Circuit panel. If the circuits split like the lower cts, will these divergent cases converge at the Supreme Ct?Standing in TX, Not in OH The plaintiff in TX (McNutt) successfully convinced the Dist Ct that he had standing to sue, recall, arguing that a letter sent by the TTB in 2014 constituted enough of a threat of enforcement. The same judge also agreed that restrictions on where distilling equipment can be located is neither "necessary" nor "proper" to collect excise taxes. That's the decision the govt appealed to the 5th Circuit. But the ct in OH considered the plaintiff there (Ream) differently. With no such letter, the Dist Ct agreed with the govt that he didn't have standing to sue because there was no cognizable threat. Ream appealed that to the 6th Circuit.Tripping Over Bureaucracy? During each hearing, US atty Caroline Tan appeared hemmed in, unable to speak definitively for either the TTB or for Justice Dept higher-ups, at times frustrating the appellate judges. First, she didn't "want to get ahead of the agency" and confirm or deny which precise locations the TTB may or may not permit. Before the 6th Circuit earlier this mo, she said she could only reference the example of the other case, McNutt, who was granted a permit to distill fuel ethanol in a detached shed, so could have applied to distill beverage alcohol there too, since the location restrictions are the same.Tan also didn't "want to get ahead of&hellip;the solicitor general," top trial atty for the US govt, when a 6th Circuit judge pressed for her to engage with arguments about the constitutionality of the law. Because the lower ct tossed the case on standing, the govt opted not to address more substantive issues in its brief for the Appeals Ct. The interaction turned tense, as this is "not the first time" the judge faced govt attys who "presumed to make a decision that is ours to make." The judge urged her to bring a somewhat scolding message back to her colleagues to be "respectful of our court's discretion" to take up additional arguments. Days after the argument, the judges requested additional briefing to explain why the govt feels the laws are constitutional.What's a Threat? US atty Tan's interactions at the 5th Circuit also got a little tense. One judge there agreed with the lower ct's reading of the TTB's 2014 letter as "threatening," paraphrasing it as saying "we're going to sue the pants off you or send you to jail" if you distill liquor at home. But "I wouldn't characterize it as a threatening letter," Tan responded, adding that it's "more reasonably read as a reminder" of the law.Tan also rejected characterizing the law as "a blanket prohibition" or a "ban on distilling," framing it as a "narrowly tailored" set of restrictions on the permissible locations for stills. But as atty for both plaintiffs, Andrew Grossman, kicked off arguments at the 6th Circuit, the govt is "talking out of both sides of its mouth" in this regard. TTB's own home distilling webpage says it strictly prohibits the practice and details penalties including heavy fines and "seizure and forfeiture" of property where an unpermitted still is located. That's "a credible threat," in his view.What's Missing? Health & Safety Ironically, neither hearing even touched what some industry members may consider as key reasons to restrict distilling, namely health and safety. That is, improper distillation can get very dangerous (and is often viewed as considerably more so than fermentation, for instance). An improperly designed or maintained still can be literally explosive. And an improperly used still can create not only ethanol but methanol, which can be deadly in even very small doses. (It's been the culprit in many dozens of tragic cases abroad in the last couple yrs, which resulted in the deaths of either locals or tourists who consumed counterfeit liquor.)Bigger Issues in Play? Then too, these suits are rooted in the much larger project of reining in federal power, as we alluded to early this yr when a slew of liberty-loving think tanks filed briefs in the 5th Circuit case. They did the same at the 6th Circuit. There's no small number of folks keen on limiting the executive branch by attacking administrative agencies like the TTB. In other words, issues facing home distilling may be more incidental and overturning this particular statute may merely be the means to a much larger end.That not only impacts the arguments of the plaintiffs here, but could also contribute to the govt's decisions about which arguments it sends up for jurists to either embrace or swat down. The cases must also be considered in the context of the current Supreme Ct majority's much-discussed interest in narrowing the "sweeping" fed powers granted by the Commerce Clause, as plaintiffs' atty Grossman described it to the 5th Circuit. Indeed, he kicked off his arguments before each panel of judges this yr by claiming the statute in question "usurps the police power" that the Constitution leaves to the states, touching on a particularly hot constitutional topic. It doesn't hurt that the 21st Amendment ceded even more federal power to the states with respect to regulating alcohol, specifically.Barring any breaking news, this will be our last issue for the week. Wishing everyone a very Merry Christmas and Happy Holidays!

Pair of Parallel Home Distilling Cases Take Different Paths to Separate Circuits, Set for Split Decisions?

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