WLF Legal Opinion Letter
Fourth Circuit Upholds Ban On Alcohol Advertising
By Katherine A. Fallow, Garrett A. Levin, and Carrie F. Apfel
August 20, 2010 (Vol. 19 No. 20)
In a split 2-1 decision, the U.S. Court of Appeals for the Fourth Circuit recently upheld a Virginia law banning certain advertisements for alcohol in college newspapers. The decision in Educational Media Co. at Virginia Tech, Inc., et al. v. Swecker, et al., 602 F.3d 583 (4th Cir. 2010), puts the Fourth Circuit in conflict with a Third Circuit decision by then-Judge Alito that struck down a similar ban, and could make it more difficult to challenge other advertising restrictions in the future, at least within the Fourth Circuit. The court denied the petition for rehearing on May 28 and issued the mandate on June 29, 2010.
The case involved longstanding regulations of the Virginia Alcoholic Beverage Control Board that restricted advertising for alcohol in college newspapers to a few generic words (e.g., the ads could say "beer" or "cocktails," but not brand names or price). In a facial challenge to the ban brought by two college student newspapers, the Fourth Circuit reversed the District Court's grant of summary judgment in favor of the newspapers.
Both the majority and the dissent analyzed the restrictions under the four-part test set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557, 566 (1980), which considers: (1) whether the expression is entitled to First Amendment protection; (2) whether the governmental interest asserted is substantial; (3) whether the restriction directly advances the asserted interest; and (4) whether the restriction is not more extensive than necessary to serve the asserted interest. The majority determined that the commercial speech was not misleading and that the advertisements concern a lawful activity. Indeed, the majority acknowledged that more than half of the newspapers' readership is over the legal drinking age. Thus, applying the first prong of Central Hudson, the majority held that the advertisements at issue were entitled to First Amendment protection. The second prong was also met because the government has a substantial interest in combating underage and abusive drinking.
In analyzing the third prong, the majority disregarded the District Court's conclusion that there was no record evidence demonstrating that an advertising ban decreases demand for alcohol among college students, and that such bans were ineffective. Instead, the majority looked to "history, consensus, and simple common sense," and concluded -- without any supporting record evidence -- that the speech ban materially advanced the government interest. 602 F.3d at 589. The majority reasoned that first, "college student publications primarily target college students," and second, "alcohol vendors want to advertise in college student publications." Id. at 590. It then concluded that it is "counterintuitive for alcohol vendors to spend their money on advertisements in newspapers with relatively limited circulation, directed primarily at college students, if they believed that these ads would not increase demand by college students." Id. The majority further held that the plaintiffs had failed to produce "specific" evidence to overcome this "common-sense" proposition. Id.
Finally, the majority concluded that because the regulations prohibited only certain types of advertisements in only one type of publication, they were "narrowly tailored" to serve the government's substantial interest "of establishing a comprehensive scheme attacking the problem of underage and dangerous drinking by college students." Id. at 591. The majority left wholly unaddressed the argument raised by the newspapers that because the ban restricted speech of a specific speaker it required heightened First Amendment scrutiny.
In dissent, Judge Moon pointed out that under Central Hudson, the government has the burden to prove that the speech regulation materially advances the government interest. He would have held that the government's speculation about the relationship between advertising and underage or abusive drinking was contradicted by the record in this case. As Judge Moon observed
The regulation not only impermissibly infringes upon the constitutional rights of adults (with the result of limiting the adult readership to receiving only speech that the Commonwealth deems appropriate for persons under the age of twenty-one), it also infringes upon the rights of those readers who are not yet twenty-one, who nonetheless have a protected interest in receiving truthful, non-misleading information about a lawful product that they will soon have the legal right to consume.
Id. at 594. Judge Moon also pointed out that the majority's conclusion conflicts with the holding in Pitt News v. Pappert, 379 F.3d 96 (3d Cir. 2004), a case not even cited by the majority, in which the Third Circuit struck down a similar Pennsylvania statute restricting alcohol advertising in college newspapers. The Third Circuit held in Pitt News that the state could not meet its burden under the third prong of Central Hudson by relying merely on speculation or a hunch that advertising increases demand. 379 F.3d at 107-08.
Several aspects of the majority's analysis are troubling. Of particular concern is the majority's approval of government reliance on mere common sense and speculation to satisfy its burden of showing that the restriction at issue directly and materially advances the purported interest. This is especially problematic given the district court's finding that the record contained no evidence that the speech restriction advanced the Commonwealth's interest. By allowing the state to rely on "common sense" and "history" -- instead of the actual facts in the record -- the majority essentially shifted the government's burden under the third prong of Central Hudson to those who challenge commercial speech restrictions. But Central Hudson and more recent Supreme Court cases (including Lorrilard Tobacco Co. v. Reilly, 533 U.S. 525 (2001) and Rubin v. Coors Brewing Co., 514 U.S. 476 (1995)) make clear that the First Amendment protections for commercial speech should have more bite than the deferential standard of review employed by the majority in Educational Media Co.
Equally problematic is how the decision effectively upholds a speech ban that infringes upon the rights of more than half of the readership of the college student newspapers impacted by the ban, consumers who have a constitutional right to receive truthful information about lawful products and activities. This logic could be extended to defend other restrictions that seek to reduce the content of advertising on billboards, transit systems, or other public venues based on a purported concern to protect minors. Government authorities could use the majority's paternalistic approach to justify other forms of commercial speech restrictions based on disapproval of the underlying product and the belief that it is inappropriate for minors.
Katherine A. Fallow is a partner in the law firm Jenner & Block LLP in its Washington office. Garrett A. Levin and Carrie F. Apfel are associates with the firm. They are members of the firm's Creative Content Practice.