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Cheering the 5th Circuit's recent holding that "a ban on home distilling isn't justified under Congress's taxing power," the Wall St Journal editorial board turned its attention to the Commerce Clause this wk. Identifying the clause's mention in a mere footnote (as INSIGHTS cited), the WSJ opined that the 6th circuit has the oppy to go one step further than the 5th when it rules on a similar case. The appellate justices should look at the Commerce Clause arguments and tee those up for the Sup Ct to review, perhaps once and for all, the editors wrote. But the paper's timing was unfortunate. The editorial appeared on the very eve of the 6th Circuit handing down its own, very different opinion on essentially the same questions of law. In fact, in a 2-1 decision, the appeals ct didn't just diverge from the 5th Circuit. First, it reversed an Ohio fed ct's ruling which decided the case on standing alone: the prospective home distiller here does indeed have standing to sue, the appellate ct wrote. (Note that the sole dissenting judge parted ways here, agreeing with the lower ct and leaving it at that.) But the ban on home distilling is absolutely "necessary and proper" to collect excise taxes, these judges decided.That sets up a straightforward "circuit split," when 2 appeals cts answer the same legal question in different ways, the kind of disconnect that often invites the attention of the Supreme Ct. So the WSJ might have gotten its wish that the high ct will look at these cases. But it might not be the vehicle for hemming in the federal power thru the Commerce Clause that some observers have long sought.Both Necessary and Proper, Ban Raises Revenue by Shifting Consumption On a couple of points, the 6th Circuit panel agreed with the 5th Circuit. For instance: the ban is not supported by "the taxing power itself," which only grants Congress the power to collect taxes. Simple. Instead, the key question for the 6th Circuit is "whether the home-distilling ban is a necessary and proper means of collecting the federal excise tax on spirits." Ultimately, it determined that the law is both "plainly adapted" to tax collection and a "reasonable" restriction to aid in that effort.As in the 5th Circuit case, the plaintiff here argued that the ban reduces rather than increases revenues, adding that he is willing to pay taxes on his homemade spirits. But "for every at-home distiller who pays the tax, many others would not," the 6th Circuit panel argued, presenting that as a reasonable assumption made by Congress when passing the law. And "stills are more easily hidden in homes than in bonded premises dedicated to distilling spirits," the ct explained, making the "rationale" for the law "almost self-evident." If most home-distilled spirits would go untracked and untaxed, "the ban thus shifts consumption from untaxed spirits to taxed spirits," they continued, "thereby increasing revenue."Alcohol is Unique, Requires Special Care These 6th Circuit judges "take seriously" a larger legal fear raised by plaintiffs, that this reading of the law "could expand Congress's power beyond its proper limits." But they found that "concern" to be "misplaced" in the context of the home distilling ban. The notion that Congress could apply the same logic to bread or clothing made at home "would strip away nearly all the particular facts on which the judgment here is based," they wrote. This case is about alcohol. And alcohol deserves particular care in its regulation, the opinion highlights."As to liquor and taxes alike," they wrote, "human nature remains decidedly unchanged." That is: people like to drink liquor and they don't like to pay taxes. So "rules concerning alcohol more generally are unique as to the evasion that often accompanies them," according to the 6th Circuit. Time after time, facts show, "empirically, alcohol is sui generis, or very close to it," the judges wrote, using the Latin term for "of its own kind" or "unique."The panel highlighted this uniqueness throughout. "For much of American history, evading excise taxes on liquor has been nearly a national pastime," the opinion begins, tracing its roots from before the Revolutionary War to just after the Civil War, when the home distilling ban was put in place. It notes numerous methods used to "secure the revenue" or protect and collect spirits taxes beyond just this ban. Congress specifically barred stills from being placed in breweries, which regularly hid them among their brewing equipment, a major source of liquor tax evasion in the mid-1800s, the judges review. The law also requires permitted distilleries to allow access for inspection at "all times," day or night, including by "furnish[ing&hellip;such keys as may be required." The judges wonder: would the plaintiffs here be so willing to provide fed agents similar access to their homes?Beware Judicial, Not Just Congressional Overreach When bringing the opinion to a close, the judges threw some additional shade at cts that came (or could come) to a different conclusion in the name of limiting the legislative and executive branches. "Congress's power is not the only one bounded by constitutional limits. The judicial power is too," the judges wrote. In their view, "for us to conclude that a law of 160 years' vintage, with this kind of empirical pedigree, has all along been both unnecessary and improper," just as the Dist Ct in TX and the 5th Circuit did, "would border on rationalist conceit." Others may ding the novel ways the govt tries to enforce its power, they conclude, but "here the novelty lies with the challenge to the law, not with the law itself. We should not be so eager to police the limits of Congress's power, that we exceed the limits of our own."

Alcohol Requires Special Regulation, Like Home Distilling Ban, 6th Circuit Sez; Cuts Against 5th Circuit, WSJ

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