Inc. v. Rhode Island Liquormart (44 )

Although disagreeing as to the exact method of applying the First Amendment's protection of free speech to statutes prohibiting truthful commercial speech, all the justices applied tests that make it extremely difficult, if not impossible, for such bans to withstand constitutional scrutiny. Thus, after the Court's decision, it is unlikely that complete bans on truthful advertising will ever be valid under the First Amendment.

The First Amendment to the U.S. Constitution provides, in part, that the government "shall make no law . . . abridging the freedom of speech[.]" Since the adoption of the First Amendment in 1792, it has been clear that the amendment protects speech by citizens on political issues and other matters of public concern. However, the Supreme Court has struggled to define the extent to which the amendment protects other areas of speech. One such area in which the Court has been inconsistent in defining the extent of the First Amendment's protection of speech involves so-called "commercial" speech, most notably advertising. In 44 Liquormart, Inc. v. Rhode Island, the Court once again struggled on this subject.

In 1956, the state of Rhode Island passed a law prohibiting any liquor manufacturers, wholesalers, or retailers from advertising the price of alcoholic beverages. The theory behind the law was that it would discourage drinking because the advertising ban would force consumers to spend more time trying to locate the best deals for alcohol. In 1991, 44 Liquormart, an alcoholic beverage retailer, ran an advertisement in a Rhode Island newspaper. Although the ad did not explicitly state the price of any alcoholic beverages, it did show pictures of alcoholic beverages and low prices of other goods such as peanuts, potato chips, and soda pop. The Rhode Island Liquor Control Administrator concluded that the advertisement implied that 44 Liquormart was selling alcohol for bargain prices, and thus violated the state's ban an advertising of liquor prices. Accordingly, the administrator assessed a $400.00 fine against 44 Liquormart.

After paying the fine, 44 Liquormart, along with Peoples Super Liquor Stores, filed a lawsuit in the U.S. District Court for the District of Rhode Island. 44 Liquormart sought a declaration that the price advertising ban was an impermissible restriction on its right to free speech, and thus violated the First Amendment. The district court found that the statute was unconstitutional because it did not "directly advance" the state's interest in reducing alcohol consumption and restricted more speech than was necessary to promote the state's interest. Rhode Island appealed the decision to the U.S. Court of Appeals for the First Circuit, which reversed the district court's decision. The court of appeals concluded that the price advertising ban was permissible because it advanced the state's interest in promoting temperance. The court of appeals reasoned that competitive price advertising would lower the prices for alcoholic beverages, and the lower prices in turn would result in increased consumption. Accordingly, the court of appeals concluded that the price advertising ban was permissible under the First Amendment.

44 Liquormart and Peoples Super Liquor Stores sought to appeal the decision to the U.S. Supreme Court by filing a petition for a writ of certiorari, which the Court granted. On appeal, the Court was unanimous in reversing the court of appeals and concluding that Rhode Island's ban on alcohol price advertising violated the First Amendment's guarantee of freedom of speech. However, the justices were unable to agree on the approach to follow in analyzing claims involving restrictions on truthful, non-misleading commercial speech, issuing four separate opinions.

Initially, all the justices agreed that the Twenty-first Amendment provided no support for the Rhode Island price advertising ban. In 1919, the Eighteenth Amendment was ratified, prohibiting the manufacture or sale of intoxicating liquors in the United States. The Era of Prohibition ushered in by the Eighteenth Amendment lasted until 1933, when the Twenty-first Amendment was ratified. The Twenty-first Amendment expressly repealed the Eighteenth Amendment. However, the amendment also provided that the states remained free to prohibit the sale and use of alcoholic beverages. Rhode Island argued that this portion of the Twenty-first Amendment altered the analysis for resolving claims involving commercial speech regulations related to alcohol by giving such regulations a presumption of validity. All of the justices agreed with Justice Stevens's conclusion that "the Twenty-first Amendment does not qualify the constitutional prohibition against laws abridging the freedom of speech embodied in the First Amendment." However, beyond that, the justices disagreed over the appropriate test for analyzing challenges to laws prohibiting truthful commercial speech.