On March 1, 1976, an agent of the Illinois Bureau of Investigation, working in Aurora, requested a search warrant to search the Aurora Tap Tavern and its bartender for evidence of heroin trafficking, after an informant, "on the weekend" of February 28–29, observed 15 to 25 packets of tinfoil on the person of a bartender only known as "Greg," along with seeing the packets on him and in a drawer behind the bar when he went there on at least 10 other occasions.

One of the officers, Jerome Johnson, conducted a pat-down on all of the 13 customers while the rest of the force focused on extensively searching the property.

When Johnson opened the package, he found six packets of foil containing a brown powder that was later identified as heroin.

During the hearing on the motion, the prosecution argued that the search was justified by Section 108-9 of the Illinois Code of Criminal Procedure of 1963 (Ill. Rev.

Justice Potter Stewart authored the opinion, arguing that Terry v. Ohio does not apply in the circumstances surrounding the case because the search warrant was only for the tavern property and the bartender, not their customers.

Justice Warren E. Burger filed a dissenting opinion, joined by Justices William Rehnquist and Harry A. Blackmun, arguing that the Court has violated the rationale of Terry by limiting the scope of to "a particularized and individualized suspicion" that a person is armed and dangerous and that although, the warrant narrowed the search to the bartender, the search was valid because the tavern's patrons had a reputation for involvement in the narcotics trade, which made the possibility that they are armed reasonable.

Justice William Rehnquist wrote his dissent, stating that the Court's reasoning was faulty, and claimed that since one or more of the tavern's customers could potentially be involved in the narcotics trade, the situation can escalate to dangerous levels due to the possibility of firearms.

Furthermore, he argued that Johnson's testimony during the pre-trial hearing that he had "felt objects" in the cigarette box created reasonable suspicion that heroin was in the container, which, he claimed, was within the boundaries of Terry v. Ohio.