Over 150 years ago, Congress passed a statute that criminalized home distilling—the practice of setting up a still in one’s home or backyard to manufacture alcoholic beverages. Last week, however, the Fifth Circuit Court of Appeals affirmed that this statute was unconstitutional. In other words, the Court of Appeals recognized that my clients—the nonprofit Hobby Distiller’s Association and four of its named members—are now free to distill alcoholic beverages at home as long as they comply with existing state and federal law.
As Devin Watkins (my co-counsel and former colleague) noted on April 10, this is a huge victory—not just for homebrew hobbyists, but also for limited government. As we argued in district court two years ago, the theory of this case is simple. The Constitution authorizes only a limited number of congressional powers. If a power is not found in the Constitution, then Congress cannot exercise it. And there’s no congressional power that can be used to criminalize home distilling.
The Department of Justice disagreed: In district court, the DOJ argued that Congress’s power to criminalize home distillery could rest in either or both its tax power and its commerce power. The district court disagreed with the government, however, and it rejected both these arguments. When the DOJ appealed the district court’s decision, however, it abandoned its commerce-power argument (I will leave it to the reader to speculate why); instead, it rested its arguments for the constitutionality of federal home-distillery criminalization entirely on the tax power.
That brings us to last week’s opinion, in which the court of appeals found that the tax power cannot be used to criminalize home distilling. By and large, Judge Jones’s opinion adopted the reasoning that we originally advocated; what follows is a highly informal summary of that opinion. As the opinion explained, the tax power has its limits. Its purpose is to raise revenue for the government, and its authority is limited to requiring the public to pay the taxes that they owe. It cannot be used merely as a tool of prohibition, partly because such prohibition is actually an anti-revenue measure and therefore an improper use of the power, and partly because reading the tax power as including a sub-power to ban activities that might give rise to tax evasion would make the tax power almost limitless.
From a constitutional-interpretation perspective, the most interesting part of Judge Jones’s skillfully reasoned opinion was her explanation of the proper construction of Congress’s constitutional power to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” (As the Supreme Court noted in Printz v. United States, this clause is regularly used—or, more precisely, misused—to defend the overly expansive or permissive exercise of congressional powers.)
As Jones’s opinion explained: In McCulloch v. Maryland, Justice Marshall determined that the clause’s necessity requirement forces federal statutes to be “plainly adapted” to their enabling powers, and because the statutory prohibition at issue is unrelated to the goal of the tax power—raising revenue—it flunks the “plainly adapted” test. Marshall’s explanation of the clause’s propriety requirement was extensive. Most relevant here is this warning: Congress cannot “adopt measures which are prohibited by the constitution,” nor can it pass “laws for the accomplishment of objects not [e]ntrusted to the government … under the pretext of executing its powers.”
The court of appeals found that the statute at issue fails that test as well for at least two reasons: it improperly removes the option of paying the tax that other (non-home) distillers bear, and it appears to rest on an implied federal police power or something very much like it—that is, a general federal power to regulate health and safety.
Several old friends provided a fair amount of informal advice and consultation throughout this action, and I am extremely grateful to them. I won’t name them all, chiefly because the credit or blame for any pleading must ultimately go to the attorneys who sign it, but I do want to express my ardent appreciation of and admiration for ace appellate advocate Andrew Grossman, who did a predictably excellent job in his appearance before the Fifth Circuit for oral argument. I also should clarify that this lawsuit is not, strictly speaking, a Cato Institute product—although it rests on the work of a fair number of attorneys like me and Andrew who have Cato associations.
To be clear: I did the bulk of my work on this suit before I was ever employed by Cato, and when I work on it now, I am not on Cato’s clock—my work on this suit occurs on evenings and weekends; if it is necessary, I will take leave to work on it in the future.
In any event, I celebrated this victory for distillery hobbyists and for freedom this weekend. If you think really hard, I bet you can figure out how!