Each man is dangerous and "no conditions of release will reasonably assure the safety of the community," two judges on the three-judge panel said.
During a series of raids in late March, authorities arrested nine members of a southern Michigan group called Hutaree. The government claims they were scheming to kill a police officer then attack officers who attended the funeral in the first steps toward a broader rebellion.
Over the objections of prosecutors, U.S. District Judge Victoria Roberts said they could await trial at home under strict conditions, including electronic monitors. The government later dropped its opposition to releasing four but took her decision on the other five to the 6th U.S. Circuit Court of Appeals.
Defense lawyers say the men legally possessed weapons and that any talk of killing people was simply stupid, hateful speech with no specific targets planned.
"It is also legal to purchase and own fertilizer and diesel fuel, but if a person who has made threats against the government purchases large quantities of both, it creates a different, more dangerous, implication," judges Boyce Martin Jr. and Raymond Kethledge wrote.
Judge Helene White said she was in favor of releasing one of the five, Joshua Clough of Blissfield, Mich. She also would have told Roberts to take another look at evidence against Thomas Piatek of Whiting, Ind.
"I find this to be a far closer call than the majority opinion would indicate," White said of the government's appeal.
She said militia members "had never taken any action except for field training, and some of the taped conversations appeared to be in jest."
Besides Clough, 28, and Piatek, 46, the other members detained are Hutaree leader David Stone, 44, and his 21-year-old son, Joshua Stone, both of Lenawee County, Mich., and Michael Meeks, 40, of Manchester, Mich.
Four others under indictment were sent home in May.