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44 Liquormart v. Rhode Island - 517 U.S. 484, 116 S. Ct. 1495 (1996)

Rule:

The State of Rhode Island cannot satisfy the requirement that its restriction on speech in its ban against advertising liquor prices be no more extensive than necessary. It is perfectly obvious that alternative forms of regulation that would not involve any restriction on speech would be more likely to achieve the State's goal of promoting temperance. As a result, even under the less than strict standard that generally applies in commercial speech cases, the State has failed to establish a "reasonable fit" between its abridgment of speech and its temperance goal. It necessarily follows that the price advertising ban cannot survive the more stringent constitutional review that Central Hudson itself concluded was appropriate for the complete suppression of truthful, nonmisleading commercial speech.

Facts:

The state of Rhode Island enacted a statute, which, inter alia, (1) generally prohibited vendors licensed in Rhode Island--as well as out-of-state manufacturers, wholesalers, and shippers--from advertising the price of any alcoholic beverage offered for sale in Rhode Island; and (2) prohibited Rhode Island media from publishing or broadcasting any advertisements, even those referring to sales in other states, that made reference to the price of any alcoholic beverages. Furthermore, the Rhode Island liquor control administrator issued regulations pursuant to the statute. In 1991, the administrator assessed a fine against the operator of a Rhode Island liquor store for running a newspaper advertisement which, although not stating the price of any alcoholic beverage, arguably contained an implied reference to bargain prices for liquor. In 1991 and 1992, the operator of several liquor stores in Massachusetts that were patronized by Rhode Island residents attempted to place liquor price advertisements in Rhode Island newspapers and other media outlets, but such advertising was refused because of the Rhode Island statute.

The store operators filed an action against the administrator in the United States District Court for the District of Rhode Island, which sought a declaratory judgment that the legislation and the administrator's implementing regulations violated the Federal Constitution's First Amendment and other provisions of federal law. The District Court (1) found that Rhode Island's off-premises liquor price advertising ban had no significant impact on levels of alcohol consumption in Rhode Island; and (2) concluded that (a) the price advertising ban was unconstitutional, because the ban did not directly advance the state's interest in reducing alcohol consumption and was more extensive than necessary to serve that interest, and (b) the Constitution's Twenty-first Amendment--which delegated to the states the power to prohibit commerce in, or the use of, alcoholic beverages--did not shift or diminish Rhode Island's burden of justifying the statutes' restriction on commercial speech. The United States Court of Appeals for the First Circuit, in reversing, reasoned that (1) there was merit in Rhode Island's submission that competitive liquor price advertising would lower prices and that lower prices would produce more sales; and (2) the Twenty-first Amendment gave the statutes an added presumption of validity.

Issue:

Did the appellate court err in upholding R.I. Gen. Laws §§ 3-8-7 and 3-8-8.1 (1987) which prohibited advertisements that inform the public about retail prices of alcoholic beverages?

Answer:

Yes

Conclusion:

The United States Supreme Court reversed the finding of the appellate court and concluded that the statutes abridged speech in violation of U.S. Const., amend. I, as made applicable to the states by the Due Process Clause, U.S. Const., amend. XIV. The Court said that the regulations were blanket bans on advertising and thus required special care in analysis. It said the commercial speech was protected and the governmental interest in reducing alcohol consumption was substantial, but the regulations did not directly advance the governmental interest asserted. The Court also held that the Twenty-first AmendmentU.S. Const., amend. XXI, did not save the regulations.

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