Amicus Curiae Brief — 44 Liquormart, Inc. and Peoples Super Liquor Stores, Inc., v. Rhode Island, and Rhode Island Liqor Stores Association
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No. 94-1140 Fone eaate merennenenenr-san
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IN THE mac
JUL § 1995
Supreme Court of the Hnithd States
CLERK
OCTOBER TERM, 1994
-
44 LIQUORMART, INC.,
Petitioner,
—V.—
THE STATE OF RHODE ISLAND E£T. AL.,
ssiengs Respondents.
ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIRST CIRCUIT
BRIEF AMICI CURIAE IN SUPPORT OF
PETITIONER SUBMITTED BY THE
ASSOCIATION OF NATIONAL ADVERTISERS,
INC.; THE NATIONAL ASSOCIATION OF
BROADCASTERS; AND THE AMERICAN
ASSOCIATION OF ADVERTISING AGENCIES
Henry L. Baumann Burt Neuborne
Valerie Schulte 40 Washington Square South
National Association of New York, New York 10012
Broadcasters (212) 998-6172
1771 N. St., N.W.
A * *¢ .
Washington, D.C. 20036 ftorney for Amici Curiae
C lof R d
Attorneys for N.A.B. ssa conser ds. pnmapee
Gilbert H. Weil
pee: F. ae Seo , 60 East 42nd Street
merican Association o New York, New York 10165
Advertising Agencies
Att A.N.A.
1899 L. Street, N.W. wavnny Jar
Washington, D.C. 20036
Attorney for A.A.A.A.
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TABLE OF CONTENTS
PAGE
ee i et Ee 1
Introductory Statement and Summary of Argument ... 3
ee kg BR nh a ee 6
I.
Il.
CENSORSHIP OF TRUTHFUL INFORMATION
ABOUT PRICES MAY NOT BE USED AS AN
INDIRECT METHOD OF IMPOSING PRICE
PLMCASD ANU nedscaecedeuetenuecdddchaveceos
A. Rhode Island's Use of Censorship to
Impose De Facto Price Control Bypasses
the Democratic Process and Suppresses
Information Needed to Form an Important
POGMINORS SUGBMIOUE occ sc ccccccecccccscccccccs
B. The 21st Amendment Does Not Empower
Rhode Island to Use Censorship to Fix
UE ARUN bait ciel cide ee we ceduduntesves
C. The “Greater” Power to Ban Alcohol Does Not
Carry With It a So-Called “Lesser Power” to
Ban Truthful Speech About Prices ..........
RHODE ISLAND'S EFFORT TO DENY
CONSUMERS ACCURATE INFORMATION
ABOUT A PRODUCT THEY ARE ABOUT TO
BUY VIOLATES THE COMMERCIAL SPEECH
POE NE cued Sudan cavaebentaddkd véderecsapese
A. Consumers Have a First Amendment Right to
Uncensored Information About the Lawful
Products They Are About to Buy............
13
15
17
18
PAGE
B. Rhode Island Has Not Asserted an Interest of
Sufficient Magnitude to Override the
Consumer’s Right to Know ................5. 20
C. Rhode Island Has Not Demonstrated That Its
Censorship Scheme Will Directly and
Materially Reduce the Irresponsible
Consumption of Alcohol.................005. 24
D. The Scope of Rhode Island’s Censorship
Program Is Far Broader Than Necessary .... 29
CONCLUSION ......cccoccsccesconsenseeesenesennenaeee 30
2S) BG ~
EO
iii
TABLE OF AUTHORITIES
Cases PAGE
Abrams v. United States, 250 U.S. 616 (1919) ........ 27
Adkins v. Children’s Hospital, 261 U.S. 525 (1923)... o
Arnett v. Kennedy, 416 U.S. 134 (1974) ............... 16
Barnes v. Glen Art Theater, 501 U.S. 560 (1991) ..... 15
Bates v. State Bar of Arizona, 433 U.S. 350 (1977) ...11, 19
Bigelow v. Virginia, 421 U.S. 809 (1975) ............. 10,17
Bloom v. O’Brien, 841 F.Supp. 277 (D. Minn. 1993).. 12
Board of Trustees, State Univ. of N.Y. v. Fox, 492 U.S.
ET 3, 20, 23, 29
Bolger v. Youngs Drug Products Corp., 463 U.S. 60
ae aee cca cpedscueecascececseese: 3,19
Brandenburg v. Ohio, 395 U.S. 444 (1969)............ 27
Brown-Forman Distillers Corp. v. New York State
Liquor Auth., 476 U.S. 573 (1986) ............... 14
California Retail Liquor Dealers Ass'n v. Midcal
Aluminum, Inc., 445 U.S. 97 (1980) .............. 14
California v. LaRue, 409 U.S. 169 (1972)............. 15
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691
een atkaGhadintdussucieccesé<cececec: 13, 14
Carey v. Population Services, Int’l., 431 U.S. 678
ee eON Cidebabebbocedcececéencse 18, 19, 28
Central Hudson Gas & Electric Corp. v. Public Service
Comm'n, 447 U.S. 557 (1980) ..........0..00005. passim
iv
PAGE
Church of the Lukumi Babalu Aye v. City of Hialeah,
BED DAA GESF sxcnncdcngiavduckssbcsakiiabecscsaus 21
Cincinnati v. Discovery Network, Inc., 113 S.Ct. 1505
CEP PES knasnontudivetisnnendieedkuuelenes 3, 5, 26, 28
Citizens Against Rent Control/Coalition for Fair
Housing v. Berkley, Cal., 454 U.S. 290 (1981)... 4,8
City of Newport, Ky. v. lacobucci, 479 U.S. 92 (1986) 15
Clark Distilling Co. v. Western Md. Ry., 212 U.S. 311
GRIPE Fi cavsnhandecassastanactsansandadesauneeiine. 13
Cleveland Board of Education v. Loudermill, 470 U.S.
POP GEO EEE stisondvacuctskar clah> cues camupedesess 16
Consolidated Edison Co. of New York v. Public Service
Conan’, 447 U.S. $30 CI9GG) ... oc ccccccccccccces 10
Craig v. Boren, 429 U.S. 190 (1976) .................. 14
Dunagin v. City of Oxford, Mississippi, 718 F2d 738
(Sth Cir. 1983), cert. denied, 467 U.S. 1259
CRED esi. rctve nds dbs is ndkvceucaodialdiwekde.ateneis 13
Edenfield v. Fane, 113 S.Ct. 1792 (1993)............. passim
Edwards v. California, 314 U.S. 160 (1941)........... 14
F.C.C. v. Beach Communications, Inc., 113 S.Ct. 2096
GWU kakekdensavismeodsnecumeadineiskbabsaiioenebes 5, 26
F.C.C. v. League of Women Voters, 468 U.S. 221
GRD ck Ganecuds cessacksescencis enckedeusebendeans 16
First National Bank of Boston v. Bellotti, 435 U.S.
Fe LOEOEE Kndunesncdsnniecasensdeiaisesuadsenevia 10
Fisher v. City of Berkeley, Cal., 475 U.S. 260 (1986) . 9
Vv
PAGE
Florida Bar v. Went for It, Inc., 1995 WL 365648
DRE tulteddbiddadititeubitecttrivtaatéd ds 20, 22, 23, 28
Friedman v. Rogers, 440 U.S. 1 (1979)................ 20
Gilbert v. Minnesota, 254 U.S. 325 (1920) ............ 27
Gitlow v. New York, 268 U.S. 652 (1925).............. 27
Gold v. DiCarlo, 380 U.S. 520 (1965) ................. 9
Harry & Bryant Co. v. FTC, 726 F2d 993 (4th Cir.),
cert. denied, 469 U.S. 820 (1984) ................ 12
Healy v. The Beer Institute, 491 U.S. 324 (1989) ..... 14
Houston E. & W. Texas Ry. Co. v. United States, 234
ee PE Ci vbtdakandibedubcahudeibakuaeccws: )
Ibanez v. Florida Board of Accountancy, 114 S.Ct.
rk RAE Regan Ae 19, 25, 26, 28
OO Cbd, SEO Wee BBE CIGUED hkcicicéccccccéccocc 19
Kent v. Dulles, 357 U.S. 116 (1957) ..............0..5. 10
Lamont v. Postmaster General, 381 U.S. 301 (1965).. 4
Larkin v. Grendel’s Den, Inc., 459 U.S. 116 (1982) ... 14
Leisy v. Hardin, 135 U.S. 100 (1890).................. 13
Linmark Associates, Inc. v. Willingboro Tp., 431 U.S.
gs BR SAC ee A ce nD 18, 19, 28
Lopez v. United States, 63 U.S.L.W. 4343 (1995) ..... 25
Louisiana Consumers League, Inc. v. Louisiana State
Board of Optometry Examiners, 557 F.2d 473
Se es ET che bnda tink adiedvanustentcekiress cc 12
Lowe v. S.E.C., 472 U.S. 181, (1985).................. 10
PAGE
Michigan Beer & Wine Wholesalers Ass'n v. Attorney
General of Michigan, 142 Mich. App. 294, 370
N.W. 2d 328 (1985), cert. denied, 479 U.S. 939
COME duds deqneuéxsevvuiesies neceusbeweatbedtenss 12
Motor Vehicie Mfgs. Assoc. v. Abrams, 684 F.Supp. 804
(S.D.N.Y. 1988), rev'd in part, 899 F.2d 1315 (2d
Cir. 1990), cert. denied, 499 U.S. 912 (1991).... 12
Mt. Healthy School District v. Doyle, 429 U.S. 274
GW I sdas cndanicudedcncivddunhenkd 400 deddanan 044. 4,21
Munn vy. Illinois, 94 U.S. 113 (1877)................... 9
Nebbia v. New York, 291 U.S. 502 (1934) ............. 9
New York State Liquor Authority v. Bellanca, 452 U.S.
Fe CEDEE stad ecuuiaddedddneseagieraevidensancians 15
New York Times v. Sullivan, 376 U.S. 254 (1964) ..... 17
Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447
ERE saeuwddsbunedscakeweasetadetduaantkiaed va 3, 20, 23
Oklahoma Telecasters Ass'n v. Crisp, 699 F.2d 490
Ce Gee: MR oda Kedicccdatiuedansstoraes veudasun 13
Olsen v. Nebraska, 313 U.S. 236 (1941)............... a
Peel v. Attorney Registration and Disc. Comm'n, 496
Sede: he CRIED a eatecectiehetresauctaeninanenithes 19, 29
Pennsylvania State Police v. Hospitality Investments
of Philadelphia, Inc., 650 A.2d 854 (Pa. 1994) .. 13
People v. Mobil Oil Corp., 48 N.Y.2d 192, 422 N.Y.S.
oe em et er eee 12
Phoenix Mutual life Insurance Co. of New York v.
Insurance Department, 500 F.Supp. 2 (S.D.N.Y.
PEE be sncenksdbvdecgneicnngingeusieidrtosanesdt ian 12
a _
EE NE rere Ae es tence EE i a me a Sa All ate _ ee eee &
ek a A 1 6k tes
= a
Vii
Pierce v. United States, 252 U.S. 239 (, 3 27
Pittsburgh Press Co. v. Pittsburgh Comm'n on Human
Relations, 413 U.S. 376 (1973)..............00... 19
Posadas de Puerto Rico Associates v. Tourism Cake
i Tk | Re 16, 22
Queensgate Investing Co. v. Liquor Control Comm’n,
69 Ohio St. 2d 361, 433 N.E.2d 138, app.
dismissed, 459 U.S. 807 (1982)................... 12-13
R.A.V. v. City of St. Paul, 112 S.Ct. 2538 (1992) ...... a, on
Rhode Island Liquor Stores Ass'n v. Evening Call
Publishing Co., 497 A.2d 331 (R.I. 1985) ...... 4,7,21
Ribnik v. McBride, 277 U.S. 350 (1928)............... u
Rubin v. Coors Brewing Co., 115 S.Ct. 1585 ......... passim
S&S Liquor Mart, Inc. v. Pastore, 497 A.2d 729 (R.I.
ESE eee eet: A Ree eRe te ee A ee ee 7,13
Sable Comunications, Inc. v. F.C.C., 492 U.S. 115 a
RECS fan ene a >> a ee ere 25
Schechter Poultry Corp. v. United States, 295 U.S.
ARE Retna ak On ot AO ee 1, 10
Schenck v. United States, 249 U.S. 47 (1919) ......... 27
Schuyler v. United States, 251 U.S. 466 (1920) ....... 27
Schwegmann Bros. v. Calvert Distillers Corp., 341
ey RS ey eee 14
Shapero v. Kentucky Bar Ass'n, 486 U.S. 466 (1988) . 19
Smith v. Goguen, 415 U.S. 566 (1974)................. 10
* re Ob Oe te ES OS Ee OR OO RE eee ete “——- oe -
SB iL eae ce ae aeee ‘
PAGE
South Ogden CVS Store, Inc. v. Ambach, 493 F. Supp.
DPS Goa Cx FORGE « cinnbendbercddtbanthdvedsaaens 12
Stroh Brewery v. Walp, Civ. Action No. 1:CV-93-937
Ges. aA Bt rasdnd nod cndadsedéehpanbuinenkneats 12
Sunshine Coal Co. v. Adkins, 310 U.S. 381 (1940).... Y
Turner Broadcasting Co. v. F.C.C., 114 S.Ct. 2445
CGE dh cbsabcuntenidenedsccntoucthnensekwideoiadus 5, 24
Tyson & Brother v. Banton, 273 U.S. 418 (1927)...... 9
United States ex rel Milwaukee Soc. Democrat
Publishing Co., v. Burleson, 255 U.S. 407 (1920) 27
United States v. Curtiss-Wright Export Corp., 299
Sle DOP CNPEE deined di cacecedéshadeaddetebdesdius 10
United States v. Edge Broadcasting Co., 113 S.Ct.
I LED Sands dundvecadsienetienperepebedsianins 19
Virginia State Bd. of Pharmacy v. Virginia Citizens
Consumer Council, Inc., 425 U.S. 748 (1976)...passim
Wall & Ochs, Inc. v. Hicks, 469 F. Supp. 873
CREPE, HTT Rais cadeebiedsdaenaebensanas ness 12
Wallace v. Jaffrey, 472 U.S. 38 (1985) ................ 21
West Coast Hotel Co. v Parrish, 300 U.S. 379 (1937). 9
Whitney v. California, 274 U.S. 357 (1927) ........... 27
Williams v. Standard Oil Co., 278 U.S. 235 (1929) ... i]
Wisconsin v. Constantineau, 400 U.S. 433 (1971)..... 14
Wisconsin v. Mitchell, 113 S.Ct. 2194 (1993) ......... 5, 26
Yee v. Escondido, California, 503 U.S. 519 (1992).... 8,9
PAGE
Youngstown Sheet & Tube Company v. Sawyer, 343
PE EP EE oulidiekthidwdbsdsvbciaticivicdadssss 10
Zauderer v. Office of Disciplinary Counsel, 471 U.S.
PNT Sitin dnd ddddbilbobten citesonaceusescekse 19
Statutes and Regulations
ee I cis nendsevsuccscscesudecsv caskets 7
SF 8 RR Oe eRe Ee ES EES 6
ie Ws WEE TE Bis Sv cvecccccueensueeessndcceceans 6
ee MEU Lab scsdecsvbaccecheaacedeauscas 6, 30
Other Authorities
Epstein, Unconstitutional Conditions, State Power,
and the Limits of Consent, 102 Harv. Rev. 4
SPN trddi dink dueUnaldanuiintinkchesokneesecdscce 16
Sullivan, Unconstitutional Conditions, 102 Harv. L.
ic Ai fete ek ey 16
ee
ee ee
IN THE
Supreme Court of the United States
OCTOBER TERM, 1994
No. 94-1140
-
44 LIQUORMART, INC.,
Petitioner,
—_—Vi—
THE STATE OF RHODE ISLAND E&T. AL.,
Respondents.
ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE FIRST CIRCUIT
ss
BRIEF AMICI CURIAE IN SUPPORT OF
PETITIONER SUBMITTED BY THE ASSOCIATION
OF NATIONAL ADVERTISERS, INC.; THE
NATIONAL ASSOCIATION OF BROADCASTERS;
AND THE AMERICAN ASSOCIATION OF
ADVERTISING AGENCIES
Interest of Amici Curiae
The Association of National Advertisers, Inc., (A.N.A.), the
National Association of Broadcasters (NAB), and the Amer-
ican Association of Advertising Agencies (A.A.A.A.) respect-
fully submit this brief amici curiae in support of petitioner.
Written consents to its filing have been granted by the parties
and filed with the Clerk of the Court.
2
The Association of National Advertisers, Inc., (A.N.A.), the
advertising industry’s oldest trade association, is the only
organization exclusively dedicated to enhancing the ability of
businesses to advertise on a national and regional basis. With
more than 5,000 subsidiaries, divisions and operating units,
A.N.A. members market a kaleidoscopic array of goods and
services and account for a significant percentage of the
nation’s annual national and regional advertising expendi-
tures. As the nation’s principal community of commercial
speakers, A.N.A. has long been committed to the advance-
ment of truthful commercial speech designed to permit con-
sumers to make informed and autonomous choices in the
marketplace.
The National Association of Broadcasters (NAB), orga-
nized in 1922, is a non-profit incorporated trade association
that serves and represents radio and television stations and
networks. NAB seeks to preserve and enhance its members’
ability to disseminate freely information concerning com-
mercial activities, the activities of government and other mat-
ters of public concern. NAB and its members oppose the use
of government censorship of truthful information about law-
ful activity as a tool to manipulate the behavior patterns of the
American public.
The American Association of Advertising Agencies
(A.A.A.A.) is the national trade association of the advertising
agency industry, representing more than 650 advertising agen-
cies throughout the United States. Members of A.A.A.A.
create and place approximately 80% of all national adver-
tisements, as well as significant portions of regional and local
advertising. A.A.A.A. is dedicated to the preservation of a
robust free market in commercial ideas.
Introductory Statement and Summary of Argument
I.
Serious constitutional questions are posed whenever a state
seeks to impose price controls, even through democratic means.
See infra at n.12. This case raises the related, and easier, ques-
tion of whether censorship of truthful information about prices
may be used to impose de facto price controls without full
democratic discussion. Amici believe that government may
never bypass the democratic process by using censorship as an
indirect method of exercising its substantive powers.
Whatever merit differentiating between commercial and
non-commercial speech may have in other contexts’, amici
believe that it would be wrong to do so in this case. For, while
truthful price advertising clearly falls within the Court’s tech-
nical definition of commercial speech”, Rhode Island’s cen-
sorship scheme does far more than merely interfere with a
commercial transaction. Rather, it cloaks a controversial
political judgment—whether or not to impose price controls—
and screens the judgment from democratic review. Since, in
politics, as in baseball, you can’t hit what you can’t see,
Rhode Island’s censorship scheme strikes at the heart of a cit-
izen’s right to know in its most deeply political sense. Vir-
ginia State Board of Pharmacy v. Virginia Citizens Consumer
Council, 425 U.S. 748, 764-65 (1976). Accordingly, Rhode
Island's attempt to ban truthful speech about prices should be
Justice Stevens has consistently warned that any effort to treat
commercial speech differently from its non-commercial cousin should be
based on a careful functional analysis of the justification for greater reg-
ulation. Rubin v. Coors Brewing Co., 115 S.Ct. 1585, 1594-96 (Stevens,
J. concurring).
; For efforts to define commercial speech, see Ohralik v. Ohio
State Bar Ass'n, 436 U.S. 447, 455-56 (1978); Central Hudson, 447 U.S.
at 561-566, and n.5; Bolger v. Youngs Drug Products Corp., 463 U.S. 60,
66-68 (1983); Board of Trustees, State Univ. of N.Y. v. Fox, 492 U.S. 469,
473-75 (1989); and Cincinnati v. Discovery Network, Inc., 113 S.Ct.
1505, 1511-13 (1993).
4
measured by stringent First Amendment norms designed to
protect the political process. Lamont v. Postmaster General,
381 U.S. 301 (1965); Citizens Against Rent Control/Coalition
for Fair Housing v. Berkley, Cal., 454 U.S. 290 (1981).
Il.
Measured under the commercial speech doctrine, moreover,
Rhode Island’s censorship scheme fails each prong of the
Central Hudson test. It fails to advance a substantial gov-
ernmental interest; fails to directly and materially advance the
state’s asserted interest in fostering temperance; and ignores
less drastic means of advancing the state’s interest.
A.
Although Rhode Island claims that its censorship scheme is
designed to advance “temperance”, which Rhode Island
authorities equate with the responsible use of alcohol, sub-
stantial evidence exists that a desire to shield small intra-state
retailers from price competition by larger stores is the
statute’s dominant purpose. See 39 F.3d at 7-8; Rhode Island
Liquor Stores Ass'n v. Evening Call Publishing Co., 497 A.2d
331, 335 (R.I. 1985); Jd at 342 n.10 (R.I. 1985) (Murray, J.,
dissenting). Such an interest in economic protectionism does
not qualify as “substantial” within the meaning of Central
Hudson. Indeed, it violates the Commerce Clause. In light of
the strong evidence of improper motive, including the candid
admission by the Rhode Island State Liquor Association that
economic protectionism is a significant goal of the statute, the
First Circuit clearly erred in refusing to require Rhode Island
to demonstrate that promotion of temperance is the statute’s
dominant purpose. Mt. Healthy School District v. Doyle, 429
U.S. 274 (1977) (presence of improper purpose places burden
on censor to show that would have acted identically in
absence of improper motive).
ee ee ar eee
ee a
5
Moreover, even if one takes at face value Rhode Island’s
assertion that preventing irresponsible alcohol use is the
Statute’s goal, Rhode Island does not have a legitimate inter-
est in fostering its goals through state-mandated ignorance.
Rubin v. Coors Brewing Co., 115 S.Ct. 1585, 1596 (Stevens,
J., concurring).
Rhode Island has failed to demonstrate that censoring truth-
ful information about prices will, in fact, materially diminish
irresponsible alcohol consumption. Edenfield v. Fane, 113
S.Ct. 1792 (1993); Rubin v. Coors Brewing Co., 115 S.Ct.
1585 (1995). Both lower courts found that, at most, Rhode
Island has demonstrated a “reasonable” basis for hoping that
banning price advertising will diminish alcohol consumption.
39 F.3d at 7-8; 829 F. Supp. at 549; 554.3 While such a “rea-
sonable” basis might be sufficient to regulate behavior, the
essence of First Amendment protection obliges a would-be
censor to do more than demonstrate that censorship is rea-
sonable. Turner Broadcasting Co. v. F.C.C., 114 S.Ct. 2445
(1994); Edenfield v. Fane, 113 S.Ct. 1792 (1993); Cincinnati
v. Discovery Network, Inc., 113 S.Ct. 1505 (1993). Compare
Wisconsin v. Mitchell, 113 S.Ct. 2194 (1993) (regulating
behavior) with R.A.V. v. City of St. Paul, 112 S.Ct. 2538
(1992) (regulating speech). See generally, F.C.C. v. Beach
Communications, Inc., 113 S.Ct. 2096, 2101 (1993). In order
to carry its burden of justification, Rhode Island must, at a
minimum, demonstrate that censorship of price advertising
will, in fact, materially reduce irresponsible alcohol con-
sumption. The courts below are in agreement that Rhode
Island failed to make such a showing.
, Indeed, the District Court found as a fact that the censorship
scheme does not materially diminish alcohol consumption. 829 F.Supp.
at 549.
6
Cc.
Finally, several alternatives exist that would minimize cen-
sorship. Most obviously, Rhode Island may attempt to regu-
late minimum price levels for alcohol openly, as it has already
done for cigarettes.* See R.I. Gen. Laws, 6-13-2. More con-
structively, Rhode Island could seek to deal effectively with
problem drinking by enacting serious measures providing for
education, treatment and law enforcement. Rhode Island's
failure to explain why such obvious non-censorship alterna-
tives were ignored constitutes an independent ground for
invalidating the statute. Rubin v. Coors Brewing Co., 115
S.Ct. 1585, 1593-94 (1995).
Statement of the Case
Rhode Island attempts to regulate the retail prices of both
cigarettes and beverages containing alcohol.’ But, while
cigarette price fixing is administered openly through legis-
lation setting a minimum floor,® Rhode Island seeks to regu-
late beverage prices without the inconvenience of an open
political debate. Instead, Rhode Island seeks to keep prices
artificially high by forbidding retailers from disseminating
truthful information to consumers about price.’
4
Amici believe that any effort to impose price control by demo-
cratic means would (and should) be soundly rejected by the people of
Rhode Island, since it tampers with the market without meaningfully con-
fronting problem drinking.
5 The constitutionality of Rhode Island's substantive effort to reg-
ulate prices is not before the Court. Were Rhode Island to attempt to fix
the price of beverages containing alcohol openly, it would raise serious
questions under the Commerce Clause. The issue posed by this case is
whether Rhode Island can bypass the democratic process by using cen-
sorship to achieve de facto price control.
6 RI. Gen. Laws 6-13-2.
, R.I. Gen. Laws 3-8-7, the statute at issue in this appeal, as
enacted in 1956. See also, R.I. Gen. Laws 3-8-8.1, extending the ban on
7
Rhode Island claims that its price advertising ban is
designed to keep retail cost artificially high in the hope of
fostering “temperance” .* While the word “temperance” is not
defined in the statute, Rhode Island authorities apply it to
mean the responsible use of alcohol, as opposed to the more
extreme historical usage associated with complete prohibi-
tion.” The Rhode Island Liquor Store Association candidly
admits that the censorship scheme is intended, as well, to
insulate small retailers from price competition.’ See S&S
Liquor Mart, Inc. v. Pastore, 497 A.2d 729 (R.I. 1985); Rhode
Island Liquor Stores Ass'n v. Evening Call Publishing Co.,
497 A.2d 331, 335 (R_I. 1985).
A threshold issue in this case, therefore, is whether a leg-
islature wishing to keep prices artificially high may impose de
facto price control without an open vote on the intensely con-
troversial issue by the simple expedient of censoring truthful
price information. The question is of considerable importance
to the democratic process, since the issue of whether to fix
prices for goods and services remains a matter of intense
price advertising to any communication making “reference to the price
of any alcoholic beverage”. The breadth of the Rhode Island ban is
demonstrated by the conviction of petitioner for using the word “WoW”
in a newspaper advertisement. 39 F.3d at 6. Rhode Island authorities
found that the word connoted a favorable price and imposed a $400 fine
for its use.
6 See 39 F.3d at 6. The statute’s “asserted” purpose is “the pro-
motion of temperance” and “the reasonable control of the traffic in alco-
holic beverages”. See R.I. Gen. Laws 3-1-5. Despite doubts, the Rhode
Island courts chose to accept the “asserted” purpose at face value. Rhode
Island Liquor Stores Ass'n v. Evening Call Publishing Co., 497 A.2d 331,
335 (R.I. 1985).
9 The difference is potentially important, since a precise articu-
lation of the state’s interest is a precondition to the accurate application
of Central Hudson.
10 The intervenors argued below that the advertising ban was
intended to protect small retailers from price competition by “giants”.
See 39 F.3d at 8.
political disagreement. Yee v. Escondido, California, 503 U.S.
519 (1992); Citizens Against Rent Control/Coalition for Fair
Housing v. Berkley, Cal., 454 U.S. 290 (1981). Only if cen-
sorship of truthful price information may be used as an end-
run around the political process is it necessary to ask whether
Rhode Island’s censorship scheme violates the commercial
speech doctrine.
With respect, amici suggest that the First Circuit appears to
have overlooked the threshold issue. The First Circuit simply
assumed that government may substitute censorship of price
information for an open, democratic judgment that price fix-
ing is warranted. But, whatever one’s views concerning the
predictive value of the Rube Goldberg causal chain underly-
ing Rhode Island’s censorship scheme," a critical prior ques-
tion is whether Rhode Island may seek to use censorship of
truthful information about prices to achieve covertly what it
lacks the political will to do openly—fix prices of beverages
containing alcohol at an artificially high level.
- Amici believe that the court below seriously misapplied the Cen-
tral Hudson requirement that all efforts to censor truthful commercial
speech be shown to “directly and materially advance” a substantial gov-
ernment interest. See infra, at 24-29.
Suit,
9
I. CENSORSHIP OF TRUTHFUL INFORMA-
TION ABOUT PRICES MAY NOT BE USED
AS AN INDIRECT METHOD OF IMPOSING
PRICE CONTROL
A. Rhode Island's Use of Censorship to Impose
De Facto Price Control Bypasses the Democratic
Process and Suppresses Information Needed to
Form an Important Political Judgment
No economic issue has triggered more intense disagreement
than government efforts to impose price control.'? While the
Court’s price control cases do not definitively determine the
constitutionality of price controls in all settings, they do
definitively demonstrate the enduring—indeed, unique—polit-
ical controversy that has swirled around the issue throughout
our history.
Given the intensely controversial nature of price control,
amici believe that a decision to fix prices must, at a mini-
mum, be made openly after full opportunity for democratic
reflection.'’ Unfortunately, Rhode Island’s decision to impose
12
Eg. Munn y. Illinois, 94 U.S. 113 (1877) (upholding railroad rate
regulation); Houston E. & W. Texas Ry. Co. v. United States (the Shreve-
port Rate Case), 234 U.S. 342 (1914) (same); Williams v. Standard Oil
Co., 278 U.S. 235 (1929) (invalidating effort to fix gasoline prices);
Tyson & Brother v. Banton, 273 U.S. 418 (1927) (invalidating effort to
fix re-sale price of theater tickets, overruled by Gold v. DiCarlo, 380
U.S. 520 (1965) (per curiam); Ribnik v. McBride, 277 U.S. 350 (1928)
(invalidating ceiling on employment agency fees), overruled by Olsen v.
Nebraska, 313 U.S. 236 (1941); Nebbia v. New York, 291 U.S. 502 (1934)
(upholding minimum price for milk); Sunshine Coal Co. v. Adkins, 310
U.S. 381 (1940) (upholding minimum price for coal); West Coast Hotel
Co. v Parrish, 300 U.S. 379 (1937) (upholding minimum wage legisla-
tion, overruling Adkins v. Children's Hospital, 261 U.S. 525 (1923);
Fisher v. City of Berkeley, Cal., 475 U.S. 260 (1986) (upholding rent con-
trol against anti-trust challenge); Yee v. Escondido, California, 503 U.S.
519 (1992) (declining to address whether mobile home rent control con-
stitutes regulatory taking).
iS As amici have noted, even democratically sanctioned efforts to
impose price controls will often raise serious constitutional questions.
See infra at n.12.
10
price controls indirectly by censoring truthful information
about prices seriously impedes democratic ref] ction in two
ways. First, censorship of truthful information about prices
acts as a wide-ranging restriction on the very information that
citizens need in order to determine whether price controls are
warranted. While the precise application of the prior restraint
doctrine to commercial speech remains to be elaborated, Lowe
v. S.E.C., 472 U.S. 181 (1985), when, as here, systematic cen-
sorship blocks the free circulation of information needed to
make an important political judgment, the censorship scheme
should be tested by First Amendment norms designed to pro-
tect the political process. Bigelow v. Virginia, 421 U.S. 809
(1975); First National Bank of Boston v. Bellotti, 435 U.S.
765 (1978); Consolidated Edison Co. of New York v. Public
Service Comm'n, 447 U.S. 530 (1980).
Second, regulating prices indirectly through censorship per-
mits legislators to avoid both a clear statement and an open
debate on the issue. Instead, the controversial political deci-
sion is shrouded in ambiguity and shielded from public
scrutiny. If the Rhode Island legislature had used vague and
imprecise language to impose price control, doctrines like the
“clear statement” rule,'‘ the “void-for-vagueness” doctrine,’*
and the prohibition on undue delegation'® would operate to
force the legislature to make the important political decision
openly, after full debate and in a manner subject to demo-
cratic review. Youngstown Sheet & Tube Company v. Sawyer,
343 U.S. 579 (1952) (decision to regulate labor market must
be made by legislature, not President, because it requires full
political debate). Surely, an effort to use censorship to achieve
the same result must be subjected to similar scrutiny. Thus,
while price advertising is classically commercial in nature,
14 Kent v. Dulles, 357 U.S. 116 (1957).
1S Smith v. Goguen, 415 U.S. 566 (1974).
16 Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935);
United States v. Curtiss-Wright Export Corp., 299 U.S. 304 (1936).
11
Rhode Island’s censorship scheme strikes at a citizen’s right
to know in its most deeply political sense.
In Virginia State Board of Pharmacy v. Virginia Citizens
Consumer Council, 425 U.S. 748 (1976) and Bates v. State
Bar of Arizona, 433 U.S. 350 (1977), this Court unequivo-
cally held that censorship of truthful price information may
not be used as a back-door means of fixing prices. In Virginia
Pharmacy, the Court invalidated a Virginia ban on advertis-
ing the price of prescription drugs. Virginia argued that its
ban was necessary to stabilize prices in order to assure a com-
petent and effective pharmaceutical distribution network. In
words that are particularly relevant to this case, Justice
Blackmun, writing for the Court, held that censorship of price
information not only deprives consumers of important infor-
mation needed to make rational economic decisions, but also
denies the public the information needed to make a political
judgment about whether a particular market should be regu-
lated at all. 425 U.S. at 764-65. The Virginia Pharmacy Court
recognized that suppressing price information in order to con-
trol prices bypasses the democratic process and begs the very
question of whether price regulation is appropriate.
Similarly, in Bates v. State of Arizona, 433 U.S. 350 (1977),
the Court invalidated an Arizona ban on advertising the price
of routine legal services, noting once again that suppression
of truthful information about price deprives the public of
important information about the need (or the lack of need) for
regulation. 433 U.S. at 364."
In the two decades since Bates and Virginia Pharmacy, the
Court has grappled with a series of complex commercial
speech issues, but it has never wavered from its fundamental
v §6The major issue in Bates was whether price advertising of rou-
tine legal services was inherently misleading. Once the Court determined
that it was not, the Court made short work of the argument that censor-
ship of price advertising was an appropriate way to regulate prices. 433
U.S. at 377.
12
judgment that price fixing may not be imposed indirectly
through censorship. Now, as in Virginia Pharmacy, using cen-
sorship as a de facto road to price control short-circuits the
democratic process, corrodes the operation of a market econ-
omy, and manipulates consumers as if they were wayward
children."*
No basis exists to depart from the holding of Virginia Phar-
macy because the product is alcohol rather than prescription
drugs. Courts that have upheld efforts to censor truthful
information about the price of alcohol’? have rested their
18 Since Virginia Pharmacy, the lower courts have been virtually
unanimous in rejecting efforts to use censorship as a back door means of
regulating prices. Eg. Bloom v. O’Brien, 841 F.Supp. 277 (D. Minn.
1993) (enjoining ban on itemizing gross revenue tax on patient bills);
South Ogden CVS Store, Inc. v. Ambach, 493 F. Supp. 374 (S.D.N.Y.
1980) (invalidating ban on pharmacist advertising 10% discount for
senior citizens); Louisiana Consumers League, Inc. v. Louisiana State
Board of Optometry Examiners, 557 F.2d 473 (Sth Cir. 1977) (invali-
dating ban on advertising price of prescription eyeglasses), Wall & Ochs,
Inc. v. Hicks, 469 F. Supp. 873 (E.D.N.Car. 1979) (ban on advertising
price of prescription eyeglasses “patently unconstitutional”); Michigan
Beer & Wine Wholesalers Ass'n v. Attorney General of Michigan, 142
Mich. App. 294, 370 N.W. 2d 328 (1985), cert. denied, 479 U.S. 939
(1986) (invalidating ban on advertising retail liquor prices); Stroh Brew-
ery v. Walp, Civ. Action No. 1:CV-93-937 (M.D. Pa. 1994) (non-coercive
speech about liquor prices protected by First Amendment); People v.
Mobil Oil Corp., 48 N.Y.2d 192, 422 N.Y.S. 33, 397 N.E. 2d 794 (1979)
(invalidating ban on signs advertising gasoline prices); Phoenix Mutual
life Insurance Co. of New York v. Insurance Department, 500 F.Supp. 2
(S.D.N.Y. 1980) (ban on truthful advertising of “low cost” insurance vio-
lates First Amendment); Motor Vehicle Mfgs. Assoc. v. Abrams, 684
F.Supp. 804 (S.D.N.Y. 1988), rev'd in part, 899 F.2d 1315 (2d Cir. 1990),
cert. denied, 499 U.S. 912 (1991) (invalidating ban on disclosing price
impact of compliance with state law) Cf. Harry & Bryant Co. v. FTC, 726
F2d 993 (4th Cir.), cert. denied, 469 U.S. 820 (1984) (FTC may require
itemized price lists for funeral services).
19 In addition to the court below, several courts have ruled that reg-
ulation of alcohol under the 21st Amendment poses a virtually unique
setting in which states may ban price advertising. Queensgate Investing
Co. v. Liquor Control Comm'n, 69 Ohio St. 2d 361, 433 N.E.2d 138, app.
13
opinions on two shaky props—an argument that the 21st
Amendment erodes First Amendment protections in the area
of state regulation of alcohol; and an assumption that the
“greater” power to ban a product necessarily carries with it a
broad “lesser” power to use censorship to discourage the prac-
tice. Neither argument can withstand analysis. Indeed, both
props were conclusively rejected in Rubin v. Coors Brewing
Co., 115 S.Ct. 1585 (1995).
B. The 21st Amendment Does Not Empower
Rhode Island to Use Censorship to Fix Prices
Prior to Prohibition, the Supreme Court had held that a
state lacked inherent power under its police power to regulate
interstate commerce in alcohol. Leisy v. Hardin, 135 U.S. 100
(1890). In 1913, Congress sought to grant the necessary
power by enacting the Webb-Kenyon Act. See Clark Distill-
ing Co. v. Western Md. Ry., 212 U.S. 311 (1917). Passage of
the 18th Amendment made the issue moot. With the repeal of
National Prohibition,*° however, section 2 of the 21st Amend-
ment was enacted to assure that the dormant Commerce
Clause would not stand in the way of democratic political
judgments to continue Prohibition at the state level.?' Thus,
the 21st Amendment grants the states power to make an
dismissed, 459 U.S. 807 (1982); Dunagin v. City of Oxford, Mississippi,
718 F2d 738 (Sth Cir. 1983), cert. denied, 467 U.S. 1259 (1984); S&S
Liquor Mart, Inc. v. Pastore, 497 A.2d 729 (R.I. 1985); Pennsylvania
State Police v. Hospitality Investments of Philadelphia, Inc., 650 A.2d
854 (Pa. 1994). See also, Oklahoma Telecasters Ass'n v. Crisp, 699 F.2d
490 (10th Cir. 1983), rev'd on other grounds, Capital Cities Cable, Inc.
v. Crisp, 467 U.S. 691 (1984).
20
Ironically, Rhode Island never ratified the 18th Amendment and
was among the first states to ratify the 21st.
a The 21st Amendment expressly provides:
The transportation or importation into any State, Territory, or
possession of the United States for delivery or use therein of
intoxicating liquors, in violation of the laws thereof, is
hereby prohibited.
14
intensely controversial political judgment that might, other-
wise, be blocked by the Commerce Clause. See Edwards v.
California, 314 U.S. 160 (1941).
The corollary of such a grant of extraordinary power is that
it must be exercised, if at all, only after full political debate
and in strict compliance with the Constitution. Not surpris-
ingly, this Court has repeatedly ruled that, far from autho-
rizing an erosion of First Amendment rights, the extraordinary
nature of the power granted by the 21st requires scrupulous
compliance with the rest of the Constitution. In Craig v.
Boren, 429 U.S. 190 (1976), for example, the Court explicitly
rejected an argument that the 21st Amendment eroded the
force of the Equal Protection Clause. In Capital Cities Cable,
Inc. v. Crisp, 467 U.S. 691 (1984), the Court explicitly
rejected an argument that the 21st Amendment altered the
norms governing preemption of state efforts to regulate adver-
tising. In Healy v. The Beer Institute, 491 U.S. 324 (1989) and
Brown-Forman Distillers Corp. v. New York State Liquor
Auth., 476 U.S. 573 (1986), the Court rejected the argument
that the 21st Amendment permitted states to fix prices by
requiring an affirmation that in-state prices were no higher
than prices in other states. In Larkin v. Grendel's Den, Inc.,
459 U.S. 116 (1982), the Court rejected an argument that the
21st Amendment eroded the protections of the Establishment
Clause. In Wisconsin v. Constantineau, 400 U.S. 433 (1971),
the Court rejected an argument that the 21st Amendment
weakened procedural due process guarantees. See also
Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384
(1951) (invalidating under Sherman Act statute authorizing
private enforcement of minimum prices); California Retail
Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97
(1980) (invalidating under Sherman Act requirement that
wine retailers abide by privately set minimum prices). Most
recently, in Rubin v. Coors Brewing Co., 115 S.Ct. 1585
(1995), the Court held that, when states seek to regulate alco-
hol advertising under the 21st Amendment, they are held “to
15
the same First Amendment restrictions that apply to the Fed-
eral Government.” 115 S.Ct. at 1591. Since the 21st Amend-
ment certainly does not enhance the power of the federal
government to censor, Coors makes it clear that the 21st
Amendment does not enhance the power of the states to sup-
press truthful speech. Justice Thomas’ opinion in Coors also
makes it clear that California v. LaRue, 409 U.S. 109 (1972)
and its progeny” do not support the claim that the 21st
Amendment erodes First Amendment rights. LaRue upheld
the power to ban nude dancing in places where alcohol was
served. Since this Court ruled in Barnes v. Glen Art Theater,
501 U.S. 560 (1991) that the nude dancing at issue in LaRue
was not entitled to First Amendment protection, Justice
Thomas’ observation in Coors* puts an end to the effort to
parlay LaRue into a broad authorization to censor truthful
commercial speech under the 21st Amendment.
Thus, the 21st Amendment provides no support for the
proposition that price controls over alcohol may be introduced
covertly via censorship. If anything, the extraordinary nature
of the power granted by the 21st Amendment argues that it be
exercised openly and only after full political debate.
C. The “Greater” Power to Ban Alcohol Does
Not Carry With It a So-Called “Lesser
Power” to Ban Truthful Speech About
Prices
Nor does the second prop fare any better. Some courts have
suggested that the controversial nature of a product carries
a New York State Liquor Authority v. Bellanca, 452 U.S. 714
(1981); City of Newport, Ky. v. lacobucci, 479 U.S. 92 (1986).
23‘ Justice Thomas observed:
Nor does LaRue support the Government's position. LaRue
did not involve commercial speech about alcohol, but instead
concerned the regulation of nude dancing in places where
alcohoi was served. 409 U.S. at 414. 115 S.Ct. at 1590 n.2.
16
with it a broad power to censor information about it.** How-
ever, the notion, expressed in dictum in Posadas de Puerto
Rico Associates v. Tourism Co., 478 U.S. 328, 346 (1986),
that the “greater” power to ban an activity carries with it a
“lesser” power to regulate it free from the usual constitutional
constraints has been repeatedly rejected by this Court.** Most
importantly, the dictum in Posadas was unanimously repu-
diated in Coors. 115 S.Ct. 1589-90 n.2. After Coors, it is now
clear that censorship of truthful commercial speech cannot be
justified as an incident of a power to prohibit the activity in
question.
It was argued in dictum in Posadas that censoring commer-
cial speech about an activity is a less drastic government
response than direct regulation. But such an argument mis-
construes a fundamental postulate of a democratic society—the
importance of open political decision-making. While banning
an activity is an obvious interference with autonomous choice,
the interference occurs openly, and only after a full political
debate. Regulation of speech in an effort to manipulate behav-
ior is a far more “drastic” event, since it often affects behavior
in a covert manner. It can leave citizens with the illusion of
freedom, but the reality of government control. In this case, it
has left the citizens of Rhode Island with de facto price control
over beverages containing alcohol without the “formality” of
an up-or-down vote on the question and without ready access
-“ One of Rhode Island’s principal arguments in the lower courts
was that the power to ban alcohol necessarily carried with it the power
to censor price information. See 39 F.3d at 6.
25 Cleveland Board of Education v. Loudermill, 470 U.S. 523
(1985); F.C.C. v. League of Women Voters, 468 U.S. 221 (1984). Com-
pare, Arnett v. Kennedy, 416 U.S. 134 (1974) (opinion of Justices Rehn-
quist, Stewart and Chief Justice Burger) with /d at 167 (opinion of
Justices Powell and Blackmun); /d at 185 (opinion of Justice White); Jd
at 211 (opinion of Justices Marshall, Brennan and Douglas). See gen-
erally, Sullivan, Unconstitutional Conditions, 102 Harv. L. Rev. 1415
(1989); Epstein, Unconstitutional Conditions, State Power, and the Lim-
its of Consent, 102 Harv. Rev. 4 (1988).
17
to the information about price levels needed to determine
whether price control should be continued.
Il. RHODE ISLAND’S EFFORT TO DENY
CONSUMERS ACCURATE INFORMATION
ABOUT A PRODUCT THEY ARE ABOUT
TO BUY VIOLATES THE COMMERCIAL
SPEECH DOCTRINE
In Point I, amici argue that Rhode Island’s censorship
scheme is so closely bound up with the fundamental political
decision of whether to impose price controls that its consti-
tutionality should be measured by First Amendment standards
designed to protect the political process. See Rubin v. Coors
Brewing Co., 115 S.Ct. 1585, 1594 (1995) (Stevens, J. con-
curring); Bigelow v. Virginia, 421 U.S. 809 (1975). If, how-
ever, the Court elects to analyze Rhode Island’s scheme under
the commercial speech doctrine, the ban on truthful price
advertising fails every prong of the Central Hudson test.
The court below erroneously treated the Central Hudson
test as if it were a radical exception to First Amendment
jurisprudence.” In fact, the principal difference between First
Amendment protection of commercial and non-commercial
speech lies in the first prong of Central Hudson.”’ The doc-
a For example, the court below took the state’s asserted interest in
promoting temperance at face value, despite its articulated suspicion that
the statute was motivated, at least in part, by a desire to shield small
retailers from price competition. 39 F.3d at 8. Similarly, in testing
whether the statute directly and materially advanced temperance, the
court applied a permissive, rational basis standard more suitable for test-
ing regulation of behavior than censorship of truthful speech. 39 F.3d at
7-8. Finally, the court below simply refused to consider the availability
of numerous less drastic alternatives. 39 F.3d at 8. In fairness, the court
below did not have the benefit of this Court’s unanimous opinion in
Coors Brewing Company directing that less drastic means be explored.
a While accuracy and lawfulness are conditions of commercial
speech protection, it is an article of faith in the non-commercial area that
there is no such thing as “official” truth. New York Times v. Sullivan, 376
U.S. 254 (1964).
18
trinal differences, if any, are far smaller at the level of the
second, third and fourth prongs. In both commercial and non-
commercial settings, a would-be censor must persuade a
reviewing court that the governmental interest is sufficiently
important; that the censorship will actually play a direct and
material role in advancing the government’s interest; and that
adequate alternative means of advancing the state’s interest do
not exist.
When applied with the requisite rigor demanded by a First
Amendment analysis, Rhode Island’s scheme fails all three
tests.
A. Consumers Have a First Amendment Right
to Uncensored Information About the Lawful
Products They Are About to Buy.
The key to a generation of commercial free speech cases in
this Court is respect for a consumer’s right to receive uncen-
sored, accurate information about lawful consumer choices.
Despite claims that the free flow of commercial information
would cause substantial harm, ranging from the undermining
of neighborhood pharmacies”*; to interference with efforts to
maintain integrated neighborhoods;” to erosion of the moral
fiber of the young,*° this Court has repeatedly recognized that
a consumer-driven, free market economy cannot function in
the absence of a free flow of uncensored, truthful commercial
information. Just as a functioning political democracy
requires the free flow of information needed to make
informed political choices, a functioning market economy is
dependent on informed choice by autonomous consumers.
Thus, in the 19 years since the Court explicitly recognized
in Virginia Pharmacy that commercial speech is entitled to
a8 Virginia State Board of Pharmacy v. Virginia Citizens Consumer
Council, 425 U.S. 748 (1976).
29 Linmark Associates, Inc. v. Willingboro Tp., 431 U.S. 85 (1977).
30 Carey v. Population Services, Int’l., 431 U.S. 678 (1977).
19
First Amendment protection, it has repeatedly upheld the con-
sumer’s right to receive accurate, uncensored commercial
information relevant to the making of a lawful economic
choice.*!
In fact, censorship of commercial speech has been upheld
by this Court only when the speech would not assist the con-
sumer in making an informed, lawful choice, or where special
circumstances require a narrowly tailored, temporary restric-
tion. Thus, where a commercial speaker solicits a consumer to
engage in unlawful activity, the speech is not protected by the
First Amendment because the consumer’s choice is not a law-
ful one. Pittsburgh Press Co. v. Pittsburgh Comm’n on Human
Relations, 413 U.S. 376 (1973) (gender-typed want ads not
protected).*?
vw E.g. Virginia State Board of Pharmacy v. Virginia Citizens Con-
sumer Council, 425 U.S. 748, 763-65 (1976) (price information con-
cerning prescription drugs); Linmark Associates, Inc. v. Willingboro Tp.,
431 U.S. 85, 96-97 (1977) (information on availability of real estate);
Carey v. Population Services, Int'l., 431 U.S. 678, 701 (1977) (infor-
mation about birth control devices); Bates v. State Bar of Arizona, 433
U.S. 350, 374-75 (1977) (information on price and availability of routine
legal services); Central Hudson Gas & Elec. Corp. v. Public Service
Comm'n, 447 U.S. 557, 567-68 (1980) (information on availability of
electrical services); In re R.M.J., 455 U.S. 191 (1982) (information on
availability of legal services); Bolger v. Youngs Drug Prods. Corp., 463
U.S. 60, 69 (1983) (commercial information in the mails about birth con-
trol); Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 643, 646-
47 (1985) (information on availability of legal services); Shapero v.
Kentucky Bar Ass'n, 486 U.S. 466 (1988) (same); Peel v. Attorney Reg-
istration and Disc. Comm'n, 496 U.S. 91, 110 & n.18 (1990) (same);
Edenfield v. Fane, 113 §.Ct. 1792 (1993) (face-to-face information about
accountant’s services); /banez v. Florida Board of Accountancy, 114 S.Ct.
2084 (1994) (accurate information concerning lawyers’ qualifications);
Rubin v. Coors Brewing Co., 115 S.Ct. 1585 (1995) (accurate information
concerning alcohol content).
3 United States v. Edge Broadcasting Co., 113 S.Ct. 2696 (1993),
is a complex application of the Pittsburgh Press principle. In Edge
Broadcasting, the United States keyed the legality of broadcast adver-
tisements for state lotteries to whether the activity was lawful in the state
20
Similarly, where commercial speech is shown to be false or
misleading, the speech may be forbidden because it actually
impedes consumers in making the informed and autonomous
choice on which a free market depends. Friedman v. Rogers,
440 U.S. 1 (1979) (ban on misleading trade names).
Finally, where special circumstances are shown to require
it, commercial speech may be regulated by a narrowly tailored
rule designed to protect the consumer without interfering with
the free flow of information. Ohralik v. Ohio State Bar Ass'n,
436 U.S. 447 (1978) (face-to-face solicitation of accident vic-
tims); Board of Trustees of the State University v. Fox, 492
U.S. 469 (1989) (solicitation of students by strangers in col-
lege dormitory); Florida Bar v. Went For It, Inc., 1995 WL
365648 (U.S.) (30 day moratorium on targeted mail solicita-
tion of accident victims). But see Edenfield v. Fane, 113 S.Ct.
1792 (1993) (face-to-face solicitation of business executives
by CPA's protected). Thus, whether one focuses on the many
cases upholding commercial free speech claims, or on the
handful of settings in which commercial free speech has been
regulated, the Court’s central concern has been the con-
sumer’s right to receive information needed to make an
informed and autonomous choice.
B. Rhode Island Has Not Asserted an Interest
of Sufficient Magnitude to Override the
Consumer’s Right to Know
Both the Administrator of the statute** and the intervening
defendants** concede that Rhode Island’s price advertising
from which the speech was transmitted. Thus, Edge Broadcasting is inap-
plicable to truthful speech about concededly lawful economic choices.
33 At a hearing held in connection with petitioner’s use of the word
“wow” in an advertisement, the Administrator of the Liquor Control
Administration, candidly stated:
“I know both 44 and Douglas are well aware that there are some
tremendous concerns at the time of licensing. Many people said
they were a chain, they were going to be able to take over the
(footnote 34 appears on next page)
21
ban is intended, at least in part, to prevent large chains from
subjecting small retailers to price competition. See 39 F.3d at
7-8; Rhode Island Liquor Stores Ass'n v. Evening Call Pub-
lishing Co., 497 A.2d 331, 335 (R.I. 1985); Id at 342 n.10
(Murray, J., dissenting). Such an effort to use censorship to
aid one set of economic competitors against another is not
merely an insubstantial interest, it is patently illegitimate. At
best, therefore, Rhode Island is in the posture of a “mixed
motive” censor, where censorship has been motivated by both
a permissible and an impermissible motive. Mt. Healthy City
School Dist. v. Doyle, 429 U.S. 274 (1977) (when permissible
and impermissible motives present, government censor must
prove that it would have acted identically even in absence of
improper motive). Accordingly, the First Circuit clearly erred
in declining to require Rhode Island to demonstrate that the
dominant purpose of the statute is promotion of responsible
alcohol use, not protection of small retailers.*°
Moreover, even if one accepts at face value Rhode Island’s
claim to be promoting temperance through state-imposed
censorship, an interest in consumer ignorance does not even
qualify as “legitimate”, much less as “substantial”. The “tem-
perance” that Rhode Island seeks to promote is a metaphor for
liquor industry in the state of RI. There was a genuine fear that set
in among the liquor establishments.”
34‘ The intervenors repeatedly asserted as a basis for intervention
the fact that the statute was intended to protect them against unfair com-
petition. The First Circuit noted the intervenor’s explanation of the
Statute’s purpose, but chose to ignore it. 39 F.3d at 8.
3 For examples of searching inquiry into legislative motive in
First Amendment cases, see, eg. Church of the Lukumi Babalu Aye v. City
of Hialeah, 113 S.Ct. 2217 (searching inquiry into motive necessary in
First Amendment free exercise setting); Wallace v. Jaffrey, 472 U.S. 38
(1985) (searching inquiry into motive necessary in First Amendment
establishment of religion setting); R.A.V. v. City of St. Paul, 112 S.Ct.
2538 (1992) (searching inquiry into motive necessary even when dealing
with unprotected speech).
22
the responsible use of alcohol. As such, it clearly qualifies as
a “substantial” government interest. But Rhode Island’s claim
that state-mandated ignorance is the way to achieve respon-
sible alcohol use runs headlong into the First Amendment.*
The First Amendment flatly rejects the statute’s jaundiced
view of the capacity of American consumers to act responsi-
bly on the basis of truthful information. The very existence of
freedom of speech is premised on an assumption that indi-
viduals are capable of dealing with the truth. If American
consumers cannot be trusted to know the price of a bottle of
scotch, how can the same individuals be trusted to make the
political judgments necessary to govern a free nation?
Not surprisingly, since Virginia Pharmacy, this Court has
never upheld a total ban on the dissemination of truthful
information about a lawful product in an effort to manipulate
consumer behavior. Neither Posadas de Puerto Rico Assocs.
v. Tourism Co., 478 U.S. 328 (1986), nor Florida Bar v. Went
For It, Inc., 1995 WL 365648 (U.S.) are to the contrary.
In Posadas, this Court upheld a narrow regulation banning
advertising of casino gambling “aimed” at natives of Puerto
Rico. The original version of the regulation in Posadas had
flatly banned all advertisement in the Spanish language capa-
ble of reaching the attention of residents of Puerto Rico. /d at
332-33. As such, it was analogous to the total information ban
imposed by Rhode Island in this case. The Superior Court of
Puerto Rico struck down the total information ban as violative
of the First Amendment. Jd at 335-36. In its place, the Court
substituted an amended regulation that permitted widespread
dissemination of truthful information to residents about
casino gambling in the Spanish language press, as well as the
distribution of promotional material in Spanish, but banned
36 A semantic difficulty is concealed in the articulation of Rhode
Island’s “interest”. While Rhode Island asserts a long-range “interest” in
temperance, its short term “interest” is consumer ignorance. In testing the
sufficiency of the state’s interest in censorship under Central Hudson,
amici believe that both long-term and short-term interests must be tested.
23
promotional advertising “aimed” at natives of Puerto Rico.
Posadas, therefore, does not support Rhode Island’s effort to
impose a flat ban on the dissemination of truthful information
about prices, since, in Posadas, ample alternative means
of transmitting the information in question were carefully
left open.*’ Moreover, to the extent that dictum in Posadas
upholds the government’s power to use censorship of truthful
information to manipulate consumer behavior because con-
sumers cannot be trusted to act responsibly, it is inconsistent
with the rationale used by the Court in those few settings
where truthful commercial speech has been regulated.
In Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447 (1978),
for example, a ban on face-to-face solicitation of accident vic-
tims by lawyers was upheld, not because consumers could not
be trusted with the information, but because the Court feared
that the lack of public scrutiny posed an unacceptable risk of
misleading speech and overreaching behavior. Once again, in
Board of Trustees of the State University v. Fox, 492 U.S. 469
(1989), the Court sustained a ban on commercial speech by
outsiders in college dormitories, not because the students
could not be trusted with the information, but because the
presence of outsiders in the dormitory posed a threat to the
students’ physical safety. Finally, in Florida Bar v. Went For
It, Inc., 1995 WL 365648 (U.S.), the Court upheld a 30
day moratorium on targeted mail solicitation of accident vic-
tims by lawyers. But the Florida ban was not premised on
mistrust of the consumer’s ability to deal responsibly with
truthful information. Indeed, Justice O’Connor’s opinion for
the Court carefully disavowed “paternalism” and was
expressly premised on the widespread availability of infor-
mation to the protected consumers.
di Amici believe that Posadas was wrongly decided even when
read properly, since absolutely no basis existed to assume that natives of
Puerto Rico were less competent to deal with truthful advertising than
their North American visitors.
24
A common thread runs through Ohralik, Fox, and Florida
Bar. In each case a consumer’s special circumstances were
held to support a narrowly tailored regulation that: (1) did not
cut off the flow of commercial information to the affected
consumers; (2) did not impede the flow of commercial infor-
mation to the rest of the population; and (3) was strictly lim-
ited in terms of time and physical reach. While amici believe
that Posadas can be read narrowly in a manner that is con-
sistent with Ohralik, Fox and Florida Bar, at bottom it stands
as the only case in the modern era in which the Court has
even arguably upheld censorship based on mistrust of a con-
sumer’s ability to deal with truthful commercial speech. In
Coors, the Court disavowed the most extreme implications of
Posadas. It is long past time to repudiate any surviving pater-
nalistic invitation to treat consumers as unable to deal respon-
sibly with truthful commercial speech. In any event, neither
Posadas, Ohralik, Fox nor Florida Bar support a total ban on
the flow of truthful commercial information to an entire pop-
ulation in the hope of manipulating consumer behavior.”**
C. Rhode Island Has Not Demonstrated
That Its Censorship Scheme Will Directly
and Materially Reduce the Irresponsible
Consumption of Alcohol.
Rhode Island has failed to demonstrate that censorship of
price information will, in fact, “directly and materially”
reduce the irresponsible consumption of alcohol within the
meaning of Central Hudson. When, as here, First Amendment
protection turns on a contested factual question, this Court
has made it clear that the judiciary must conduct an inde-
pendent review of the factual undepinnings of any censorship
scheme. Turner Broadcasting Co. v. FCC, 114 S.Ct. 2445
(1994); Edenfield v. Fane, 113 S.Ct. 1792 (1993); Ibanez v.
38 == Amici believe that the Court erred in Florida Bar in treating
some Florida residents as too thin-skinned to receive commercial infor-
mation in the mail that might be of benefit to them.
25
Florida Board of Accountancy, 114 S.Ct. 2084 (1994). Unfor-
tunately, the court below abdicated its responsibility to con-
duct a searching review of Rhode Island’s claim that banning
price advertising materially diminishes the irresponsible con-
sumption of alcohol. Instead, the First Circuit deferred totally
to the unsubstantiated hunch of the Rhode Island legislature.*
At trial, several experts testified that no correlation existed
between price advertising and per capita alcohol consump-
tion. See 829 F.Supp. at 544-550. Most tellingly, the per
capita consumption patterns of states that limited price adver-
tising were shown to be no lower (and sometimes higher) than
states that permitted it. 829 F.Supp. at 546. Rhode Island’s
inability to document a correlation between price advertising
and per capita aicohol consumption is not a coincidence. It
flows from the inherent difficulty of predicting the effect of
price advertising on retail prices® and from the near impos-
sibility of predicting the effects of small price changes on
demand for beverages containing alcohol.*' Thus, both courts
below agreed that, at most, Rhode Island had demonstrated a
rational basis for hoping that a ban on price advertising would
reduce irresponsible alcohol consumption, but had failed to
demonstrate that it would, in fact, do so.
39 Deference to legislative fact-finding is particularly inappropriate
in this case, since the Rhode Island legislature apparently made abso-
lutely no effort to explore the factual issues before enacting the statute
in 1956. See Sable Comunications, Inc. v. F.C.C., 492 U.S. 115 (1989);
Lopez v. United States, 63 U.S.L.W. 4343 (1995).
40 For example, in Bates, Arizona argued that price advertising
would raise the price of legal services. 433 U.S. at 377-78. Rhode Island
claims in this case that price advertising will depress retail cost.
“ Rhode Island’s assumption that small price differentials will
translate into diminished consumption of alcohol overlooks the fact that
the alcohol market is complex and highly differentiated. Thus, changes
in price generally result in a shift to other brands or to other types of
beverage.
26
The District Court, recognizing that this Court has consis-
tently required would-be censors to demonstrate that cen-
sorship would, in fact, materially alleviate the asserted harm,
found that Rhode Island had failed to carry its burden of
proof. 829 F. Supp. at 554-55. The First Circuit agreed that
Rhode Island was obliged to demonstrate the efficacy of its
censorship scheme, but dramatically reduced the weight of the
would-be censor’s burden. Instead of requiring proof that the
censorship scheme would, in fact, reduce irresponsible con-
sumption, the First Circuit asked merely whether it was “rea-
sonable” for Rhode Island to hope that censorship of price
information would decrease irresponsible consumption. 39
F.3d at 7-8. In effect, the First Circuit substituted a “rational
basis” standard of review more appropriate for testing efforts
to regulate behavior for the heightened scrutiny standard
associated with review of efforts to censor speech.** Compare,
Cincinnati v. Discovery Network, Inc., 113 S.Ct. 1505, 1510
n.13 (1993) (rejecting rational basis review of speech regu-
lations) with F.C.C. v. Beach Communications, Inc., 113 S.Ct.
2096 (1993) (applying rational basis scrutiny to regulation of
behavior).*°
Ordinarily, the majority may regulate behavior in the ratio-
nal hope that regulatory activity may bring about a desired
social result. Wisconsin v. Mitchell, 113 S.Ct. 1811 (1993).
Where, however, speech is the target of a censor because of
allegations that its message leads to undesirable behavior, the
42 In fact, the First Circuit's analysis shifts the burden of proof to
the speaker. The Court below held that unless petitioner could disprove
Rhode Island’s assertions, they would remain as a reasonable basis for
the censorship. In effect, therefore, under the First Circuit’s analysis, a
censorship scheme must be upheld unless the speaker disproves all of the
censor’s assertions. See /banez v. Florida Board of Accountancy, 114
S.Ct. 2084 (1994)
43 Justice O’Connor’s opinion in Florida Bar, supra, explicitly
eschews rational basis review. WL 365648 (U.S.) at p.3.
27
government must do more than assert a rational belief that
sweeping censorship of truthful information about price will
foster responsible use of alcohol. In a commercial speech con-
text, the government must demonstrate that banning truthful
information about prices will, in fact, reduce irresponsible
alcohol consumption. Edenfield v. Fane, 113 S.Ct. 1792
(1993). Both lower courts agree that Rhode Island has failed
to carry such a burden.
Prior to the pathbreaking free speech opinions of Justices
Holmes and Brandeis,“* speech could be banned merely
because the censor had a rational basis for asserting that it
had a “bad tendency” to lead to undesirable behavior. Gitlow
v. New York, 268 U.S. 652 (1925). The very essence of mod-
ern free speech protection is a rejection of the bad ten-
dency/rational basis test in favor of heightened judicial
scrutiny of a censor’s assertion that speech may be banned
because it causes undesirable behavior. In many non-com-
mercial speech contexts, the bad tendency/rational basis test
has been supplanted by the “clear and present danger” te t.
Brandenburg v. Ohio, 395 U.S. 444 (1969). In the commercial
speech area, the heightened causation requirement is reflected
by the obligation of a would-be censor to establish that cen-
sorship is necessary to directly and materially alleviate the
asserted harm. Edenfield v. Fane, 113 S.Ct. 1792 (1993); Cen-
tral Hudson Gas & Electric Corp. v. Pub. Svc. Comm'n, 447
U.S. 557 (1980).
44 Schenck v. United States, 249 U.S. 47 (1919); Abrams v. United
States, 250 U.S. 616, 627 (1919) (Holmes and Brandeis dissenting);
United States ex rel Milwaukee Soc. Democrat Publishing Co., v.
Burleson, 255 U.S. 407, 436-38 (1920) (Holmes, J. dissenting); Gilbert
v. Minnesota, 254 U.S. 325, 337 (1920) (Brandeis, J. dissenting); Pierce
v. United States, 252 U.S. 239, 272-73 (1920) (Holmes and Brandeis, dis-
senting); Schuyler v. United States, 251 U.S. 466, 482 (1920) (Holmes
and Brandeis, JJ. dissenting); Whitney v. California, 274 U.S. 357, 372-
78 (1927) (Brandeis and Holmes, concurring).
28
Unfortunately, while the First Circuit claimed to apply First
Amendment scrutiny, its analysis resurrects the discredited
bad tendency/rational basis test. Rational basis is not, how-
ever, the test in a modern First Amendment case. Discovery
Network, 113 S.Ct. 1510, n. 13. Indeed, adoption of a rational
basis/bad tendency standard in commercial free speech cases
would drain the term “directly advance” of any meaning. It
would virtually eliminate any practical distinction between
regulating commercial speech and regulating economic
behavior.
Although this Court has not explicitly defined a commercial
censor’s precise burden of proof, its commercial speech cases
apply a heightened test that requires would-be censors to
prove that censorship will, in fact, “directly” and “materially”
advance the censor’s asserted interest. Eg. Virginia State
Board of Pharmacy v. Virginia Citizens Consumer Council,
425 U.S. 748 (1976); Linmark Associates, Inc. v. Willingboro
Tp., 431 U.S. 85 (1977); Carey v. Population Services, Int’l.,
431 U.S. 678 (1977); Central Hudson Gas & Elec. Corp. v.
Public Service Comm'n, 447 U.S. 557 (1980); Edenfield v.
Fane, 113 S.Ct. 1792 (1993); Ibanez v. Florida Board of
Accountancy, 114 S.Ct. 2084 (1994). Most recently, in Rubin
v. Coors Brewing Co., 115 S.Ct. 1585 (1995), Justice Thomas
observed that “educated guesses” and “anecdotal evidence”
could not substitute for proof of the close nexus that must be
shown to exist between commercial speech and harm. 115
S.Ct. at 1593.*
Justice Kennedy, writing for eight members of the Court in
Edenfield, ruled that Florida had failed to demonstrate the
requisite causal link between the targeted speech and the
= Florida Bar, supra, is not to the contrary. In Florida Bar, Jus-
tice O'Connor noted that both the need for the regulation and its efficacy
were supported by extensive unrebutted factual evidence. In this case,
both lower courts are in agreement that the factual underpinnings of the
Rhode Island statute have been thoroughly eroded. Only by applying a
rational basis standard of review was the First Circuit able to save the
Statute.
29
feared feared evil. In words particularly applicable to this
case, Justice Kennedy noted:
This burden [proving that censorship will “directly
advance” a governmental interest] is not satisfied by
mere speculation or conjecture; rather a governmental
body seeking to sustain a restriction on commercial
speech must demonstrate that the harms it recites are real
and that its restriction will in fact alleviate them to a
material degree. [citations omitted]. Without this
requirement, a State could with ease restrict commercial
speech in the service of other objectives that could not
themselves justify a burden on commercial expression.
113 S.Ct. at 1800. (emphasis added).
Of course, that is precisely what is taking place in this case.
Unless Rhode Island is held to a significant burden of prov-
ing that a ban on price advertising actually fosters temper-
ance, Rhode Island will have succeeded in parlaying a
legitimate concern with fostering responsible use of aicohol
into an illegitimate exercise in economic protectionism.
Under the First Amendment, Rhode Island is obliged to prove
not merely that its desire to censor is reasonable; it must
prove that that its censorship scheme will succeed.
D. The Scope of Rhode Island’s Censorship
Program Is Far Broader Than Necessary.
In the commercial speech context, a would-be censor must
explore less drastic means of advancing the state’s interest
without resorting to censorship. Rubin v. Coors Brewing Co.,
115 S.Ct. 1585 (1995). While the less drastic means require-
ment in a commercial speech context does not require
mechanical invalidation of a regulation merely because other
alternatives may exist, Board of Trustees v. Fox, 492 U.S. 469
(1989), it does require a careful effort to avoid unnecessary
censorship. Peel v. Att'y Registration & Disc. Comm'n, 496
U.S. 91 (1990). For example, in Rubin v. Coors Brewing Co.,
30
115 S.Ct. 1585 (1995), Justice Thomas noted that the exis-
tence of several alternatives “all of which could advance the
Government’s asserted interest in a manner less intrusive to
[the speaker’s] First Amendment rights” provided an inde-
pendent reason to invalidate the statute. In Coors, the most
obvious alternative noted by Justice Thomas was direct reg-
ulation of alcohol content. Direct regulation is equally avail-
able to Rhode Island. If Rhode Island can demonstrate that
unduly low prices cause irresponsible consumption of alcohol,
Rhode Island may seek to set a state minimum price, just as it
has done for cigarettes. R.I. Gen. Laws 6-13-2. While amici
believe that such an interference with the free market would
be unwise, of doubtful constitutionality and unresponsive to
the real issues posed by problem drinking, at least it would
avoid widespread censorship and would permit the people of
Rhode Island to make a decision about the wisdom of price
control after an open debate. More constructively, Rhode
Island could attack problem drinking head-on by enacting
serious programs of education, treatment and law enforce-
ment. For, at bottom, tinkering with the price of alcohol,
either directly or covertly via censorship, does nothing about
problem drinking. It simply transfers wealth from consumers
to favored retailers. When, as here, Rhode Island effects such
a wealth transfer through censorship, it violates the First
Amendment.
CONCLUSION
For the above stated reasons, the decision of the United
States Court of Appeals for the First Circuit should be
reversed.
Dated: July 6, 1995
New York, New York
31
Respectfully submitted,
Burt Neuborne
40 Washington Square South
New York, New York 10012
(212) 998-6172
Attorney for Amici Curiae
(Counsel of Record)
Gilbert H. Weil
60 East 42nd Street
New York, New York 10165
Attorney for A.N.A.
Henry L. Baumann
Valerie Schulte
National Association of
Broadcasters
1771 N. St., N.W.
Washington, D.C. 20036
Attorneys for NAB
John F. Kamp
American Association of
Advertising Agencies
1899 L. Street, N.W.
Washington, D.C. 20036
Attorney for A.A.A.A.
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