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Here’s where a Granville man’s legal battle on home distilling stands

Sep 12, 2024

This article was first published in the Newark Advocate.

The Buckeye Institute filed a document last month challenging the federal government's argument that a Newark brewer can't bring his case to overturn a home-distilling ban forward.

John Ream, represented by Buckeye Institute lawyers, sued the Treasury Department in January, seeking to overturn a ban on home distilling of alcohol for personal use. One of his lawyers, Buckeye Institute President and CEO Robert Alt, filed a reply brief Aug. 28 supporting a motion for summary judgment, according to a news release.

Ream lives in Granville and owns Trek Brewing, 1486 Granville Road, Newark. He opened the brewery with his wife, Kristin, in 2017. He is interested in trying home distilling but won't violate the ban that prevents him from doing so, Alt said.

Alt is the lead attorney in the case and filed the lawsuit in the U.S. District Court for the Southern District of Ohio.

Alt named the Treasury Department, Secretary Janet Yellen, the Alcohol and Tobacco Tax and Trade Bureau and bureau administrator Mary Ryan as defendants in the lawsuit.

The case remains pending in U.S. District Court. Attorneys representing the Treasury Department declined to comment.

Here's what both sides are arguing.

Why can't Ream distill at home?

Federal law prohibits people from producing distilled spirits at their home. There are several reasons for this, one of which includes preventing tax evasion. It also can be dangerous to do so, according to Fintech and the Whiskey Wash, because it involves mixing materials that require considerable care.

However, people can distill and produce spirits if they apply to establish a distilled spirits plant. Distillers must pay taxes when operating a plant. In general, spirits are taxed at higher rates compared to those set for beer and wine because of their higher alcohol content.

Producing distilled spirits at any other place than a qualified plant is a felony punishable by up to five years in prison and fine up to $10,000, according to the Alcohol and Tobacco Tax and Trade Bureau.

What Ream's attorneys are saying

In the brief, Ream's attorneys claimed he satisfies constitutional requirements to challenge the ban because he has an "injury in fact," meaning an infringement of a legally protected interest that is "concrete" and not "hypothetical." They argue Ream's "injury" is his inability to distill at home because of the ban.

"Mr. Ream has taken every possible step to prepare for the lawful and safe distillation of spirits in his own home. All except for the last one, that is - purchasing the still itself - which would subject him to criminal prosecution," Alt said in the news release.

"If one buys the government's argument about standing in this case, Mr. Ream would need to actually proceed to break the law and subject himself to federal prosecution and fines - potentially destroying his and his family's lives - in order to challenge this unconstitutional ban on home distilling in court."

The attorneys also claimed that the ban is unconstitutional because it's not within Congress's taxing power, making it neither "plainly adapted" or appropriate to execute a federal tax on distilled spirits.

They also argue that the ban is not an "appropriate" means of facilitating tax collection because it's outside of Congress's regulatory scope.

What the defendants are claiming

Attorneys representing the treasury secretary filed a motion in April seeking to dismiss Ream's complaint, arguing that he "lacks standing" and his complaint fails to state that the ban is unconstitutional, court records show.

They argue that Ream hasn't "plausibly" alleged that an inability to distill at home is causing or will cause him any "concrete" harm. They countered the Buckeye Institute's argument regarding tax collection, saying because a tax on distilled spirits is a "first lien" that attaches when it's created, the government has an interest in tax revenue from them once they're produced.

The attorneys also argued that though Ream said he wants to distill at home, he hasn't provided information of any possible distilling equipment or layout of the place where he wants to do so, which is required to apply for a federal distilled spirits permit and provides "probability that he will engage in such conduct."

Ream's attorneys refuted this claim, writing that Ream provided details of the equipment and wanted to install it at his home.

Others fighting home-distilling ban

Ream isn't the only person fighting the ban.

In July, a Texas judge ruled the federal ban on home distilling is unconstitutional, siding with the Hobby Distillers Association, which is seeking to legalize production of spirits for personal consumption.

U.S. District Judge Mark Pittman said the ban isn't a valid use of Congress's taxing power because it doesn't raise revenue and "did nothing more than statutorily ferment a crime," Reuters reported.

The U.S. Department of Justice had claimed the ban protects revenue the government raises from taxing distilled spirits, primarily by limited where plants are located, according to Fox News.

In August, the U.S. Department of Justice appealed Pittman's ruling, court records show.