Anheuser-Busch v. Mayor and City Council

855 F. Supp. 811

ANHEUSER-BUSCH, INC. and Penn Advertising of Baltimore, Inc., Plaintiffs, v. MAYOR AND CITY COUNCIL OF BALTIMORE CITY, et al., Defendants.

Civ. A. Nos. HAR 94-117, HAR 94-145.

United States District Court, D. Maryland.

March 28, 1994.

Thomas M. Wood (Neuberger, Quinn, et al.) Baltimore, MD.

John J. Walsh (Cadwalader, Wiskersham & Taft), Mary E. Taylor, Steven G. Brody, New York City, for plaintiff or petitioner.

Burton H. Levin (Office of the City Solicitor), Sandra R. Gutman, Baltimore, MD, for defendant or respondent.

MEMORANDUM OPINION

HARGROVE, District Judge.

Plaintiffs Anheuser-Busch, Inc. ("Anheuser-Busch") and Penn Advertising of Baltimore, Inc. ("Penn Advertising") have each brought suit for declaratory and injunctive relief against defendants Mayor and City Council of Baltimore City (the municipal corporation), Kurt L. Schmoke (and his successors as the Mayor of Baltimore City), the City Council of Baltimore City, and David Tanner (and his successors as General Superintendent of Zoning Administration and Enforcement), (hereinafter collectively referred to as "the City"). Anheuser-Busch and Penn Advertising challenge Article 30, Section 10.0-1H and Article 30, Section 11.0-7 of the Baltimore City Code, as promulgated by Bill No. 626 (hereinafter collectively referred to as "the Advertising Ban" or "the Ordinance"), as violating the First Amendment to the Constitution of the United States and Article 40 of the Declaration of Rights of the Maryland Constitution. The Court consolidated the two separate actions on the record in open court in light of their common questions of law and fact. Fed.R.Civ.P. 42(a).

Presently before the Court is a Motion for Preliminary Injunction brought by Anheuser-Busch and Penn Advertising, and a Motion to Dismiss submitted by the City. Because the Court has considered matters outside of the pleadings, the Court will treat the Motion to Dismiss as a Motion for Summary Judgment under Rule 56. Fed.R.Civ.P. 12(b). Having reviewed the parties' memoranda and exhibits, and heard oral argument on the motions, this Court holds that the Ordinance does not violate the First Amendment or Article 40 for the reasons set forth in this memorandum opinion.

FACTS

On May 27, 1993, the Maryland legislature amended Section 222 of the Alcoholic Beverage Statute ("the Maryland Statute") to delegate to the Mayor and City Council of Baltimore the authority to adopt an ordinance restricting outdoor advertisements of alcoholic beverages in Baltimore City if the Mayor and City Council determine the ordinance is "necessary for the promotion of the welfare and temperance of minors." Md. Alco.Bev.Code Ann. §§ 222 and 222(c) (1993). The Maryland Statute exempts from regulation neon or other electric signs in the windows of premises licensed to sell alcohol, signs on MTA vehicles and taxicabs, signs on commercial vehicles used for transporting alcoholic beverages, signs at Memorial Stadium and any property owned, leased or operated by the Maryland Stadium Authority, and signs on property next to interstate highways. Md.Alco.Bev.Code Ann. § 222(c)(2).

Pursuant to its authority under the Maryland Statute, the City enacted the Ordinance on January 6, 1994, which bans, with certain exceptions, the display or advertisement of alcoholic beverages on billboards in publicly visible locations. The Ordinance contains a lengthy Preamble in which the City describes the problem of underage drinking in the City and asserts that such regulation is necessary to promote the welfare and temperance of minors exposed to such advertisements. The City Council enacted the Ordinance after holding a public hearing on the issue on November 17, 1993, at which private citizens, public officials, experts on advertising, legal scholars, and representatives of Anheuser-Busch and Penn Advertising testified.

Prior to the date the Ordinance took effect, Anheuser-Busch and Penn Advertising brought suit alleging that the Ordinance is unconstitutional.

DISCUSSION¹

Summary judgment will be granted when no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). In considering the City's motion, the Court views the underlying facts and all reasonable inferences drawn therefrom in the light most favorable to the parties opposing summary judgment. Matsushita Electrical Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

While the First Amendment² guards against unwarranted infringements on commercial speech, it is a well settled principle that "commercial speech enjoys a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values, while allowing modes of regulation that might be impermissible in the realm of noncommercial expression." Ohralik v. Ohio State Bar Association, 436 U.S. 447, 456, 98 S.Ct. 1912, 1918, 56 L.Ed.2d 444 (1978).

The Supreme Court in Central Hudson set forth the test for assessing the constitutionality of restrictions on commercial speech:

At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.

Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 566, 100 S.Ct. 2343, 2351, 65 L.Ed.2d 341 (1980).

In this case, the parties concur that the advertising at issue is not unlawful or misleading, and that the City's interest in promoting the welfare and temperance of minors is substantial, thereby satisfying the first and second prongs of the Central Hudson test. The parties dispute at length whether the Ordinance complies with the third and fourth prongs of the test.³

Direct Advancement

In Edenfield v. Fane, ___ U.S. ___, 113 S.Ct. 1792, 123 L.Ed.2d 543 (1993), the Supreme Court revisited the Central Hudson test for commercial speech and concluded that to withstand a First Amendment challenge, the state must demonstrate that "its restriction serves a substantial state interest and is designed in a reasonable way to accomplish that end." Id. at ___, 113 S.Ct. at 1799. The Supreme Court cautioned that mere assertion that a regulation directly advances an asserted interest is insufficient to justify it. Under the Central Hudson test, "this burden 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 restrictions will in fact alleviate them to a material degree." Id. at ___, 113 S.Ct. at 1800.

In Edenfield, a Certified Public Accountant ("CPA") challenged a Florida ban on inperson solicitation by CPAs, promulgated by the Florida Board of Accountancy, as a violation of his rights under the First and Fourteenth Amendments. In striking down the prohibition, the Supreme Court recognized the substantial governmental interest in protecting consumers from fraud or overreaching by CPAs and in maintaining CPA independence in performing their professional duties. However, the Court held that the Florida Board had failed to demonstrate that the ban against solicitation "advanced its asserted interests in any direct and material way." Id. at ___, 113 S.Ct. at 1800.

In invalidating the restriction, the Supreme Court focused on the Board's failure to present any studies, anecdotal evidence, or individual conduct to support its contention that the ban was necessary to prevent the alleged harm that personal solicitation by CPAs created. The only evidence that the Board presented to support the need for its regulation was an affidavit by a former Chairman of the Florida Board that concluded that the solicitation ban was necessary. In evaluating the Board's proffered evidence, however, the Supreme Court discounted the affidavit, which "contained nothing more than a series of conclusory statements that add little if anything to the Board's original statement of its justifications." Id. at ___, 113 S.Ct. at 1800-01. The Court also reviewed a report on CPA solicitation and literature on the accounting profession, which contradicted the Board's concern. Id. at ___, 113 S.Ct. at 1801.

The City maintains that Edenfield does not modify the deference that this Court should afford the legislature under Central Hudson when evaluating restrictions on commercial speech. In repeated litigation over the constitutionality of ordinances that restrict the placement of billboards, the Supreme Court has deferred to a legislative judgment that a link exists between billboards and traffic safety. In Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981), for example, the Supreme Court upheld San Diego's ban on offsite billboard advertising under the Central Hudson test. Although the record failed to establish a connection between billboards and traffic safety, the Court nonetheless upheld the restriction, reasoning: "We likewise hesitate to disagree with the accumulated, commonsense judgments of local lawmakers and of the many reviewing courts that billboards are real and substantial hazards to traffic safety. There is nothing here to suggest that these judgments are unreasonable." Id. at 509, 101 S.Ct. at 2893 (footnote omitted).

The City urges this Court to follow the Fifth and Tenth Circuits in deferring to a legislative judgment that a link exists between alcohol advertising and consumption when evaluating the Ordinance under Central Hudson....