Ban on advertisement of liquor prices struck down

WASHINGTON, D.C.–The Supreme Court in mid-May struck down a 1956 Rhode Island law that banned the advertisement of retail liquor prices, holding that the state’s interest in discouraging alcohol consumption did not justify the broad restriction on truthful commercial speech.

A majority of the court also agreed that the Twenty-First Amendment, giving the states power to regulate alcoholic beverages, does not override the First Amendment’s prohibition against laws abridging freedom of speech.

Justice John Paul Stevens delivered the judgment for a unanimous court, but the other justices joined in the analysis to varying degrees. Three other justices wrote concurring opinions, which other justices also joined.

Relying on a 1980 Supreme Court case holding that a restriction on truthful commercial speech must directly advance a substantial state interest, the principal opinion holds that the Rhode Island law is invalid because the state failed to justify a total ban on liquor price advertising as the best way to encourage “temperance.” Blanket bans on commercial speech that deprive the public of accurate price information must be reviewed with “special care” and “rarely survive constitutional review,” Stevens held.

“The First Amendment directs us to be especially careful of regulations that seek to keep the people in the dark for what the government perceives to be their own good,” he wrote.

Justice Sandra Day O’Connor agreed with the opinion of the court that the ban is invalid, but concluded that the state could decrease alcohol consumption without restricting advertising, such as by establishing minimum prices and increasing sales tax. O’Connor’s opinion was joined by three other justices.

The opinions by both Justices Stevens and O’Connor also explicitly rejected language from a 1986 decision stating that it is less restrictive for governments to ban speech about a product than to ban the product itself. This could have ramifications for pending challenges to attempts to regulate tobacco advertising.

Justice Clarence Thomas wrote separately to argue that all “paternalistic” regulations designed to keep accurate information from consumers are unconstitutional on their face.

The case began when two liquor retailers challenged the laws prohibiting newspaper advertisements or any other promotion of liquor price information that would be visible from outside a store.

Although the federal District Court in Rhode Island concluded that the ban was unconstitutional because it did not advance the state’s purported interest, the U.S. Court of Appeals in Boston (1st Cir.) reversed, ruling that the state’s claim that the ban discouraged alcohol consumption was rational, and that because of the Twenty First Amendment, the regulation carried an “added presumption of validity.” (44 Liquormart v. Rhode Island; Plaintiffs’ Counsel: Evan Lawson, Boston)