Commercial Speech And Alcoholic Beverages - Part I

“Can the ABC really prohibit me from telling my customers where I will be conducting a retail wine tasting?  Can the ABC really prosecute me for posting on Facebook that I will be attending an event, if the proper name of the event includes part of a retailer’s name?   Can the ABC prosecute me for my tweets about how cool the establishments are that carry my wine?  What happened to freedom of speech?  Did I lose my right to free speech because I produce or sell alcoholic beverages?

The series of blog posts explores those questions, and more, in the context of basic constitutional rights, rights that have up until now seemingly been ignored by the ABC. We are challenging the status quo, and this is why.

What Is “Commercial Speech”?

Explaining your constitutional rights in the context of the regulation of alcoholic beverage regulations requires some background in constitutional law.   While Con Law may not be your cup of tea (or glass of wine), the goal is to understand how the constitution protects you and your business.  So don your powdered wig, tri-corner hat and waistcoat and come along as we explore how the Founding Fathers’ great achievement applies to you today.

The First Amendment to the United States Constitution provides:  “Congress shall make no law … abridging the freedom of speech…”   That restriction applies to both the executive and legislative branches of the federal government, and it was later made applicable to state and local governments (including the agencies that regulate the alcoholic beverage industry) by the passage of the Fourteenth Amendment. 

The right to free speech is one of the bulwarks of the American system of government.  The vast majority supports free speech, at least in the abstract.   Enthusiasm diminishes when the freedom extends to unpopular speech, such as flag-burning, Neo-Nazi marches, or supporting terrorists, making judicial oversight all the more important.   The First Amendment has provided, and continues to provide, a steady parade of provocative cases that test the limitations of governmental power to suppress expression, either in the form of general prohibitions or post-speech penalties.

The Supreme Court has, in general, construed the freedom of speech broadly and thus constricted governmental power to suppress expression.   Restrictions based on the content of “speech,” which includes “expressive conduct” (such as flag-burning), are invalid, unless the content fits within the few, narrow exceptions that permit government to restrict expression.  Those exceptions include obscenity, defamation, “fighting words,” and incitement to conduct that constitutes a “clear and present danger” (e.g., the well-known exception that allows government to prohibit yelling “Fire” in a crowded theatre).

But what about advertisements, promotions, marketing and other forms of commercial expression?   Do those forms of expression qualify as “speech” protected by the First Amendment?   The Supreme Court has categorized those forms of expression as “commercial speech” and held that the category is protected from governmental interference by the First Amendment.  The protection extended to commercial speech is not as absolute as that extended to “pure” speech, but it is nonetheless substantial.

In the landmark Central Hudson case, the Supreme Court defined “commercial speech”  as “expression related solely to the economic interests of the speaker and its audience.”   Examples from the decided cases include advertisements in print and electronic media, product labels, soliciting customers, free samples, branded merchandise and events, and free gifts incident to purchases.

In Central Hudson, the Supreme Court enunciated a four-step test for determining the legitimacy of governmental restrictions on commercial speech:

  • First, the commercial speech must concern lawful activity and not be misleading.  Put another way, the First Amendment protects neither speech promoting illegal activities or products, nor speech that is fraudulent or deceptive.
  • Is a substantial governmental interest served by restricting commercial speech?
  • Does the restriction on commercial speech directly and significantly advance the interest that the government asserts?
  • Is the restriction on commercial speech narrowly tailored to advance the government’s interest, or is it more expansive than necessary?

The Supreme Court has held that the government has the burden to prove that its restrictions meet the Central Hudson test—a good result for those whose rights of expression are threatened by governmental action.

Join us next week for Part II of this blog.   We will discuss how the “commercial speech” doctrine and Central Hudson protect the free speech rights of those in the alcoholic beverage industry.