44 Liquormart Inc. v. Rhode Island

517 U.S. 484

116 S.Ct. 1495

134 L.Ed.2d 711

44 LIQUORMART, INC., et al.

v RHODE ISLAND et al.

Certiorari to the United States Court of Appeals for the First Circuit.

No. 94-1140.

Supreme Court of the United States

Argued November 1, 1995

Decided May 13, 1996

Syllabus ^*

Petitioners, a licensed Rhode Island liquor retailer and a licensed Massachusetts liquor retailer patronized by Rhode Island residents, filed this action seeking a declaratory judgment that Rhode Island laws banning the advertisement of retail liquor prices except at the place of sale violate the First Amendment. In concluding that the ban was unconstitutional because it did not directly advance the State's asserted interest in the promotion of temperance and was more extensive than necessary to serve that interest, the District Court reasoned that the party seeking to uphold a restriction on commercial speech carries the burden of justifying it and that the Twenty-first Amendment did not shift or diminish that burden. In reversing, the Court of Appeals, inter alia, found "inherent merit" in the State's submission that competitive price advertising would ultimately increase sales, and agreed with it that the Twenty-first Amendment gave its advertising ban an added presumption of validity.

Held: The judgment is reversed. 39 F. 3d 5, reversed.

Justice Stevens delivered the opinion of the Court with respect to Parts I, II, VII, and VIII, concluding:

1. The Twenty-first Amendment cannot save Rhode Island's price advertising ban because that Amendment does not qualify the First Amendment's prohibition against laws abridging the freedom of speech. Although the Twenty-first Amendment-which repealed Prohibition and gave the States the power to prohibit commerce in, or the use of, alcoholic beverages-limits the dormant Commerce Clause's effect on a State's regulatory power over the delivery or use of liquor within its borders, the Amendment does not license the States to ignore their obligations under other constitutional provisions. See, e.g., Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691, 712. California v. LaRue, 409 U. S. 109, 118-119, disavowed. Because the First Amendment must be included among those other provisions, the Twenty-first Amendment does not shield the advertising ban from constitutional scrutiny. Pp. 28-30.

2. Because Rhode Island has failed to carry its heavy burden of justifying its complete ban on price advertising, that ban is invalid. P. 31.

Justice Stevens delivered the principal opinion with respect to Parts III-VI, concluding that Rhode Island's ban on advertisements that provide the public with accurate information about retail liquor prices is an unconstitutional abridgment of the freedom of speech. Pp. 8-28.

(a) Justice Stevens, joined by Justice Kennedy, Justice Souter, and Justice Ginsburg, concluded in Part III that although the First Amendment protects the dissemination of truthful and nonmisleading commercial messages about lawful products and services in order to ensure that consumers receive accurate information, see, e.g., Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U. S. 748, 765, the special nature of commercial speech, including its "greater objectivity" and "greater hardiness," authorizes the State to regulate potentially deceptive or overreaching advertising more freely than other forms of protected speech, see, e.g., id., at 771-772, n. 24, and requires less than strict review of such regulations, Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N. Y., 447 U. S. 557, 566, n. 9. However, regulations that entirely suppress commercial speech in order to pursue a policy not related to consumer protection must be reviewed with "special care," and such blanket bans should not be approved unless the speech itself was flawed in some way, either because it was deceptive or related to unlawful activity. See ibid. Pp. 8-13.

(b) Justice Stevens, joined by Justice Kennedy and Justice Ginsburg, concluded in Part IV that a review of the case law reveals that commercial speech regulations are not all subject to a similar form of constitutional review simply because they target a similar category of expression. When a State regulates commercial messages to protect consumers from misleading, deceptive, or aggressive sales practices, or requires the disclosure of beneficial consumer information, the regulation's purpose is consistent with the reasons for according constitutional protection to commercial speech and therefore justifies less than strict review. However, where a State entirely prohibits the dissemination of truthful, nonmisleading commercial messages for reasons unrelated to the preservation of a fair bargaining process, there is far less reason to depart from the rigorous review that the First Amendment generally demands. The special dangers that attend such complete bans-including, most obviously, the fact that they all but foreclose alternative channels of communication-present sound reasons that justify more careful review. Pp. 14-17.

Justice Ginsburg, concluded in Part V that because Rhode Island's advertising ban constitutes a blanket prohibition against truthful, nonmisleading speech about a lawful product, and serves an end unrelated to consumer protection, it must be reviewed with "special care" under Central Hudson, 447 U. S., at 566, n. 9. It cannot survive that review because it does not satisfy even the less than strict standard that generally applies in commercial speech cases under Central Hudson, id., at 566. First, the advertising ban does not directly advance the State's substantial interest in promoting temperance. See ibid. Because a commercial speech regulation may not be sustained if it provides only ineffective or remote support for the government's purpose, id., at 564, the State bears the burden of showing not merely that its regulation will advance its interest, but also that it will do so "to a material degree," see, e.g., Edenfield v. Fane, 507 U. S. 761, 767. In this case, therefore, the State must show that the ban will significantly reduce alcohol consumption, but has presented no evidence to suggest a significant reduction. Second, the ban is more extensive than necessary to serve its stated interest, see 447 U. S., at 566, since alternative forms of regulation that would not involve any speech restrictions-e.g., the maintenance of higher prices either by direct regulation or by increased taxation, the rationing of per capita purchases, or the use of educational campaigns focused on drinking problems-would be more likely to achieve the goal of promoting temperance. Thus, the State has failed to establish the requisite "reasonable fit" between its regulation and its goal. See, e.g., Board of Trustees, State Univ. of N.Y. v. Fox, 492 U. S. 469, 480. Pp. 17-21.

(d) Justice Stevens, joined by Justice Kennedy, Justice Thomas, and Justice Ginsburg, concluded in Part VI that the State's arguments in support of its claim that it merely exercised appropriate "legislative judgment" in determining that a price advertising ban would best promote temperance-i.e., (1) that because expert opinions as to the effectiveness of the ban "go both ways," the Court of Appeals correctly concluded that the ban constituted a "reasonable choice" by the legislature; (2) that precedent requires that particular deference be accorded that legislative choice because the State could, if it chose, ban the sale of alcoholic beverages outright; and (3) that deference is appropriate because alcoholic beverages are so-called "vice" products--must be rejected. See Rubin, 514 U. S., at ___, n. 2. United States v. Edge Broadcasting, 509 U. S. 418, distinguished; Posadas de Puerto Rico Associates v. Tourism Co. of P. R., 478 U. S. 328, distinguished and disavowed in part. Pp. 22-28.

Justice Scalia concluded that guidance as to what the First Amendment forbids, where the core offense of suppressing particular political ideas is not at issue, must be taken from the long accepted practices of the American people. See McIntyre v. Ohio Elections Commission, 514 U. S. ___, ___ (Scalia, J., dissenting). Since, however, the Court has before it no evidence as to state legislative practices regarding regulation of commercial speech when the First and Fourteenth Amendments were adopted, or even as to any national consensus on the subject later developed, he would simply adhere to the Court's existing jurisprudence, which renders the Rhode Island regulation invalid. Pp. 1-2.

Justice Thomas concluded that in cases such as this, in which the government's asserted interest is to keep legal users of a product or service ignorant in order to manipulate their choices in the marketplace, the Central Hudson balancing test should not be applied. Rather, such an "interest" is per se illegitimate, cf., e.g., Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U. S. 748, 768-770, and can no more justify regulation of "commercial" speech than it can justify regulation of "noncommercial" speech. Pp. 1-12.

Justice O'Connor, joined by The Chief Justice, Justice Souter, and Justice Breyer, agreed with the principal opinion that Rhode Island's prohibition on alcohol-price advertising is invalid and cannot be saved by the Twenty-first Amendment, but concluded that the First Amendment question must be resolved more narrowly by applying the test established in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N. Y., 447 U. S. 557, 566. Assuming that the prohibition satisfies the test's first three prongs-i.e., that (1) the speech at issue concerns lawful activity and is not misleading, (2) the asserted governmental interest is substantial, and (3) the regulation directly advances the governmental interest--Rhode Island's regulation fails the final fourth prong because its ban is more extensive than necessary to serve its stated interest. Rhode Island justifies...