A primary role played by a state alcohol regulatory agency is monitoring the
impact of the beverage alcohol industry on the public. Indeed, many state
agencies were created by laws the express purpose of which was the promotion of
temperance among state citizens. Not surprisingly, therefore, should a citizen
voice concerns regarding the content of a particular alcohol advertisement, a
beverage alcohol regulatory official may be charged with investigating the
advertisement in question.
Once a regulatory official has developed concerns about the content of an
advertisement, he or she must carefully consider how to proceed. If an industry
member has expended significant resources in preparing an advertisement and has
employed its own evaluation concerning the ad's suitability, the member
understandably may be resistant to any regulatory pressure to alter the ad.
Should the official decide to restrict an industry member's right to advertise
basic product information, that agency could find itself on the losing end of
costly and protracted litigation.
Utah's Advertising Restrictions Questioned
The difficulty state agencies and state legislators face in attempting to
restrict alcohol advertising is illustrated in the 10th Circuit Court of
Appeals' recent decision in Utah Licensed Beverage Ass'n v. Leavitt, 256
F.3d 1061 (10th Cir. 2001), which enjoined Utah from enforcing certain statutory
provisions governing the advertisement of alcohol beverages. In so doing, the
court cast doubt on the constitutionality of such advertising restrictions in
light of Rubin v. Coors Brewing Company1 and 44 Liquormart
v. Rhode Island2. A review of the 10th Circuit's
decision also provides an opportunity to outline the analysis courts typically
employ when examining content-based advertising restrictions.
In 1996, the Utah Licensed Beverage Association (ULBA) and others filed suit
in federal district court to enjoin Utah from enforcing certain state provisions
restricting advertisements of distilled spirits and wine. After three years, the
district court denied ULBA's request for an injunction. ULBA appealed this
decision.
At issue on appeal were essentially two statutory provisions. UTAH CODE ANN.
32A-12-401(2) (2001) effectively banned all advertising of distilled spirits
or wine, except that retailers could post a sign that designated the retailer as
the holder of a state alcohol beverage license.3 Similarly, Utah Code
Ann. . 32A-12-401(4) (2001) prohibited retailer price advertisements that
could be viewed by passersby.4
The Central Hudson Test
To determine the constitutionality of the provisions, the 10th Circuit
employed the four-part Central Hudson test:
whether the speech concerned is not misleading and concerns a lawful
activity
whether the asserted governmental interest is substantial
whether the regulation directly advances the asserted governmental
interest, and
whether the regulation is more extensive than is necessary to achieve the
asserted interest5
Courts generally have accepted that alcohol advertising restrictions prohibit
truthful statements concerning lawful activity and that governments have a
substantial interest in limiting beverage alcohol consumption. The 10th
Circuit's decision regarding Utah's statutory provisions follows this approach.6
Courts historically have applied the final two prongs of the analysis
differently, however. For instance, courts have disagreed about whether
advertising restrictions have any substantial effect on the overall...
