Inc. v. Rhode Island Liquormart (44 )

Justice O'Connor, writing an opinion which was joined by Chief Justice Rehnquist and Justices Souter and Breyer, thought that the Court should continue to apply the four part test established by the Court in the 1980 case of Central Hudson Gas and Electric Corp. v. Public Service Commission of New York. In Central Hudson, the Court found that a New York law prohibiting all promotional advertising by electric utilities violated the First Amendment. In doing so, the Court established a four part test for analyzing commercial speech claims under the First Amendment. Under this test, the Court first asks whether the speech is truthful and concerns lawful activity. If not, then the First Amendment provides no protection. If the speech is truthful and concerns lawful activity, then the Court asks whether the interest which the government seeks to advance is substantial. If it is not, then the regulation on speech is invalid. If the government interest is substantial, then the regulation will be upheld if it meets the third and fourth part of the test: the regulation must directly advance the government's interest, and may not restrict more speech than is necessary to advance that interest.

Justice O'Connor concluded that because Central Hudson involved a statute prohibiting truthful commercial advertising similar to the one involved in this case, there was no reason to depart from the Central Hudson four part test in analyzing the constitutionality of the Rhode Island price advertising ban. Applying the Central Hudson test, Justice O'Connor concluded that the Rhode Island price advertising ban was unconstitutional because it did not meet the fourth prong of the test. She reasoned that, assuming that the price advertising ban directly advanced Rhode Island's interest in reducing alcohol consumption, it nevertheless restricted more speech than was necessary to advance that interest. She reasoned that Rhode Island had other, more effective methods for reducing alcohol consumption, such as establishing minimum prices for alcohol, increasing sales taxes on alcoholic beverages, limiting purchase of alcohol, or conducting an educational campaign about the dangers of drinking. Thus, Justice O'Connor concluded that Rhode Island's price advertising ban failed to meet the Central Hudson standard and was an infringement on the First Amendment right to free speech.