John Ream v. U.S. Dep't of the Treasury

CourtCourt of Appeals for the Sixth Circuit
DecidedApril 21, 2026
Docket25-3259
StatusPublished

This text of John Ream v. U.S. Dep't of the Treasury (John Ream v. U.S. Dep't of the Treasury) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John Ream v. U.S. Dep't of the Treasury, (6th Cir. 2026).

Opinion

RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 26a0117p.06

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

┐ JOHN REAM, │ Plaintiff-Appellant, │ │ v. > No. 25-3259 │ UNITED STATES DEPARTMENT OF THE TREASURY; │ SECRETARY SCOTT BESSENT; ALCOHOL AND TOBACCO │ TAX AND TRADE BUREAU; ADMINISTRATOR MARY G. │ RYAN, │ Defendants-Appellees. │ ┘

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:24-cv-00364—Edmund A. Sargus, Jr., District Judge.

Argued: December 10, 2025

Decided and Filed: April 21, 2026

Before: SILER, KETHLEDGE, and MATHIS, Circuit Judges.

_________________

COUNSEL

ARGUED: Andrew M. Grossman, BAKER & HOSTETLER LLP, Washington, D.C., for Appellant. Caroline W. Tan, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Andrew M. Grossman, Kristin A. Shapiro, BAKER & HOSTETLER LLP, Washington, D.C., Robert Alt, THE BUCKEYE INSTITUTE, Columbus, Ohio, Patrick T. Lewis, BAKER & HOSTETLER LLP, Cleveland, Ohio, for Appellant. Caroline W. Tan, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. Michael Pepson, AMERICANS FOR PROSPERITY FOUNDATION, Arlington, Virginia, Thomas A. Berry, CATO INSTITUTE, Washington, D.C., Thomas R. McCarthy, Tiffany H. Bates, CONSOVOY MCCARTHY PLLC, Arlington, Virginia, Michael A. Petrino, CENTER FOR INDIVIDUAL RIGHTS, Washington, D.C., Reilly Stephens, LIBERTY JUSTICE CENTER, Austin, Texas, for Amici Curiae.

KETHLEDGE, J., delivered the opinion of the court in which SILER, J., concurred. MATHIS, J. (pp. 12–18), delivered a separate dissenting opinion. No. 25-3259 Ream v. U.S. Dep’t of the Treasury, et al. Page 2

OPINION _________________

KETHLEDGE, Circuit Judge. For much of American history, evading excise taxes on liquor has been nearly a national pastime. At the time of the Revolution, one historian has written, “nearly every farmer distilled his own whiskey and deemed it his inalienable right to evade the tax, and resist the collector whenever a favorable opportunity presented itself for doing so.” Gallus Thomann, Liquor Laws of the United States 58 (1885). Soon after the Constitution’s ratification, in western Pennsylvania, this evasion came by force of arms—in the Whiskey Rebellion, which President Washington put down only after assembling “an army larger than any he had commanded during the Revolution.” Gordon S. Wood, Empire of Liberty: A History of the Early Republic, 1789–1815, at 138 (2009). Just after the Civil War, in 1867, a select committee of the House of Representatives heard more than a month of testimony, and concluded: “in the manufacture and sale of tobacco, cigars, and spirits, and especially the latter, the most stupendous frauds are practiced against the government in the collection of its revenue.” H.R. Rep. No. 39-24, at 1 (1867).

The following year Congress enacted comprehensive legislation to end those frauds, which among many other provisions included a ban on distilling spirits in one’s home. Now, almost 160 years later, John Ream argues that the home-distilling ban has been beyond Congress’s enumerated powers all along. We disagree with the district court’s conclusion that Ream lacks standing to bring his claims; but we hold that the ban is a necessary and proper means of collecting the federal excise tax on distilled spirits.

I.

A.

The home-distilling ban is among the “ingenious and complicated provisions” of the statutory regime that Congress enacted, in 1868, to “secure the revenue” (as the phrase went) from federal excise taxes on distilled spirits. United States v. Ulrici, 111 U.S. 38, 40 (1884). This regime remains largely intact today. In its current form, the excise tax attaches the moment No. 25-3259 Ream v. U.S. Dep’t of the Treasury, et al. Page 3

a distilled spirit comes into “existence as such,” generally “at the rate of $13.50 on each proof gallon.” 26 U.S.C. § 5001(a)(1), (b); see id. § 5004(a)(1). A “proof gallon” is one gallon of 100 proof liquor; as the proof increases or decreases, so does the tax. See id. §§ 5002(a)(10)-(11), 5006(a)(1); 27 C.F.R. § 30.1.

With certain exceptions not relevant here, “operations as a distiller” may “be conducted only on the bonded premises of a distilled spirits plant.” 26 U.S.C. § 5171(a). A person may commence such operations only after registering the “plant” with the Secretary of the Treasury and obtaining a permit to distill spirits. Id. § 5171(c)(1), (d)(1). Large-scale distillers (i.e., distillers whose annual tax liability is at least $50,000) must also furnish the Secretary with a bond, which serves as security for all the taxes and penalties owed by the distiller. Id. § 5173(a)(1), (e)(1)(B).

Congress has authorized the Secretary to “prescribe such regulations relating to the location, construction, arrangement, and protection of distilled spirits plants as he deems necessary to facilitate inspection and afford adequate security to the revenue.” Id. § 5178(a)(1)(A); see also id. § 5301(a)(1) (authorizing the Secretary to regulate the containers used for distilled spirits whenever “such action is necessary to protect the revenue”). But to that same end—of securing the revenue—Congress has prescribed more than a few rules of its own. As relevant here, “[n]o distilled spirits plant for the production of distilled spirits shall be located in any dwelling house, in any shed, yard, or inclosure connected with any dwelling house, or on board any vessel or boat, or on premises where beer or wine is made or produced, or liquors of any description are retailed.” Id. § 5178(a)(1)(B). Moreover, every “person having in his possession or custody, or under his control, any still or distilling apparatus set up, shall register such still or apparatus with the Secretary immediately on its being set up.” Id. § 5179(a). And every “person engaged in distilled spirits operations shall place and keep conspicuously on the outside of his place of business a sign showing the name of such person and denoting the business, or businesses, in which engaged.” Id. § 5180(a).

Further, every “proprietor of a distilled spirits plant shall furnish the Secretary such keys as may be required for internal revenue officers to gain access to the premises and any structures thereon.” Id. § 5203(a). Those officers may “enter any distilled spirits plant, or any other No. 25-3259 Ream v. U.S. Dep’t of the Treasury, et al. Page 4

premises where distilled spirits operations are carried on,” at “all times, as well by night as by day.” Id. § 5203(b). Thus, to paraphrase somewhat: the owner of a still for making liquor must register it; stills may be possessed only on “bonded premises” that are themselves subject to inspection at any time, day or night; and stills must not be possessed in a home, shed, yard, boat, or place where beer or wine is produced.

Violations of these laws trigger harsh penalties. Anyone who possesses an unregistered still, or neglects to furnish the required bond, or distills in a proscribed place, “shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, for each such offense.” Id. § 5601(a). The same goes for any person who tries otherwise to defraud the government of taxes owed on distilled spirits. Id. § 5602.

B.

This case comes to us on a motion to dismiss, so we take the facts alleged in the complaint as true. Sturgill v. Am.

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