Hobby Distillers Ass’n v. Alcohol and Tobacco Tax & Trade Bureau

Overview

(U.S. District Court for the Northern District of Texas, July 10, 2024) The U.S. District Court for the Northern District of Texas granted summary judgment to overturn two regulations restricting the possession and placement of distilled spirits grains and distilling equipment, holding that the restrictions were a Congressional overstep not authorized by the Tax or Commerce powers. Although the government described the overturned regulations as taxes, the Court held that they were not authorized by the Tax Power because they did not generate revenue and they lacked the essential features of a tax. The Court also evaluated whether the Commerce Clause might justify the regulations but held that the federal regulation of alcohol was insufficiently comprehensive to extend to the regulation of personal production. Comprehensive regulatory schemes, like those for marijuana (Gonzales v. Raich) or wheat (Wickard v. Filburn), “justif[y] Congressional regulation of local behavior.” By contrast, federal alcohol regulations only address interstate activity, leaving substantial control over production, distribution, and consumption to the states. The Court also held that the overturned regulations were not “necessary and proper” because the regulations lacked a “sufficiently clear corollary” connecting them to either the Tax or Commerce Powers. The Court struck down both contested regulations as unconstitutional overreaches of Congress’s enumerated powers. Read the full opinion here. 

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