2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit

7-29-2004 

# The P itt N ews v

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P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de n t i al

D ocke t N o . 03-1725

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Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

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UNIT ED STA TES C OURT OF

APPEALS FO R T HE TH IRD CIR CU IT

____________
No. 03-1725

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THE PITT NEW S,
Appellant

v.

GE RA LD J. PA PPE RT , in his ca pacity as Attorney Generalof the Co mm onw ealth o f Pe nnsylva nia * ; FR AN K K OS CE LN AK , in his ca pacity as Direct or, Bureau of

Liquor Control Enforcement, Pennsyl vania State Poli ce; JOHN E. JONES, III, in his capacity as Chairman Pennsy lvania Liquor Control Board

___________________
ON APPEAL FROM THE UNITED STATES DI STRI CT COURT FOR THE WESTE RN DI STRI CT OF

PEN NS YL VA NIA

Distri ct Court J udge: Honorable Willi am

L. Standish (D.C. No. 99-cv- 00529)

____________________ Argued: January 22, 2004
Before: ALITO, CHER TOFF, and DEBEVOISE, ** Circuit Judges
(Opinion Fi led: J uly 29, 2004 )

WITOL D J. WAL CZAK (argued) American CivilLiberties Union 313 Atwood Street Pitt sburgh, PA 15213
Counsel for

Appellant

J. BART D eLONE (argued) 15 th Floor Office of A ttorn ey Gen eral o f Pen nsylvan ia Strawb erry Square Harrisburg, PA 17120
Counsel for

Appellee

GAYLE C. SPROU L Lev ine, Su llivan, K och & Sch ultz 2004 Makefield Road Yardley , PA 19067

Counsel for Amicus Curi ae The S tudent Pres s L aw Center, PA Newspaper Associat ion, and Reports C om mittee for Freedom of the Press

____________________
OPINI ON OF THE COURT

* Purs uant to Fed eral R ule of Ap pellate Proced ure 43(c)(2). ** The Hon or abl e Di cki nso n R. Debevoise, Distric t Judge of the Un it ed States Dis tric t Co urt for the Dis tri ct of New Jersey, sitting by

designation.2

____________________
AL ITO , Circuit

Judge :

The case conc erns th e
cons ti tutiona li ty of a Pennsy lvania law that bans advertisers f

ro m payi ng for the dissemi nationof “alcohol ic bever age adverti sing” by com mu nicatio ns m edia affil iate d with a univ ersity, colle ge, or other“edu cation al i n sti tuti on.” The Pitt News , a u ni ve rsi ty new spaper, sought an injunct ion ag ai ns t e nf

or ce men t o f the la w, bu t th e District Cou rt granted sum mary judgmentfor the de f endants, holding t hat the law “has no effect

on The Pitt News’ freedom of express ion” becaus e the paper remains fr ee to sa y wha tever i t wishes about alcohol ic bever ages as l ong as it is not paid for eng agin g in the e xpr essio n.

We hold that t

he First Amendment preclude s th e en for ceme nt of the law in ques ti on against

adverti sers i n The Pitt News , and we t he refore reverse t he order of the D istrict Co urt and remand for the entryof a permanent i njuncti on.

I .

The Pitt News is a certi fied student organiza tion at the U ni ve rsi ty o f Pitt sburgh (“the Unive rsit y”) . The Un iversity has more than 25, 000 students, at least two-thi rds of

whom are old e nough to drink under

Pen nsylv ania law

. Ov erall,

more than 7 5% of the tota l U nivers ity population (students, faculty, and staff) is more than 21 y ears of age. The Pitt N ews was create d by the Un iversity Board of Truste es “i n
reco gn iti on of the const itutional right of stude nts to free dom of s peech. ” The parti es do not dis pute that the paper repres ents i ndependent st udent speec h, not offici al speech dis seminate d on b ehalf of the Un iv e rsity. The n ew spap er is publis hed daily

during t he school y ear and week ly during t

he summer, and it is dist ributed free of char ge at 75 l ocati ons around the c am pus

. Th e P itt News is displ ayedat the se locat ion s toge ther w ith otherfree weeklynewspap e rs, includi ng In Pitt sburgh , City Paper , and UR Pitt sburgh

. None of these ot her pub licatio ns is affi liat ed with a n educ ati onal institution , and th ey all con ta i n alcoh olic beverage adv ertise me nts. All of The Pitt New s’ revenue i s deri ved from adverti sing, and untilAct 199 took effe ct, the pape r recei ved substantialincome from alco hol ic be ver age ads

.
In 1996, the Pennsy lvani a Legislature ena cted an amendment to the state LiquorCo de tha t is pop ul ar ly kno wn
as “Act 199.” A prov isi on o f this

ame ndm ent, 42 P a. Sta t. A nn. §4-498 (e)( 5)(g) (herei nafter

“Secti on 4- 49 8”), proh ibits “any ad vertising of alc oho lic beverag es ” in virtuall y anymedium of

mass communicati on that is affiliate d w ith “any educati onal ins tit

ution, ” incl uding a

c o llege or u n i v e rsi ty. 1

1 “A ct 199 ” states in releva nt part:
§ 4 -49 8. U nlaw f u l3 Violati ons of thi s provis ion ar e misdem eanors and may be punish ed by fines of up to $500 or impri sonment for up to three months on a firs t charge , an d b y a mand atory minimum sentence of t hree

mo n ths in jai l for a s ubsequent offe nse. See 47 P a. St at. A nn. § 4-4 94( a).
To clari fy the meaning of Act 199, the Pennsyl va nia Liquor C ontrol Bo ard (LCB) issu ed AdvisoryNotice No. 15, wh ich state s in relev ant pa rt:
W h a t k i n d o f adv ertis e men ts would be affect ed by the prohibiti on against advertise ment s in publi cati ons publ is hed by, for and in beha lf o f

any educat ionalinstitu tio n?
A dverti sem ents wh ic h indica te the av ail abi lit y and/orprice of

alcoh ol ic beverages m ay not b e contai ned in publi cati ons publis hed by, f or an d in beha lf o f any educ ationa l instit utions. Uni versi ties are consider ed educati ona l advertisi ng
(e) The follow ing sh all app ly to all alcoh olic beverage and malt bever age advertisi ng:
(4) The use i n any adverti sement of alc oho lic beverages of any s ubject matt e r, language or

slogan direct ed to minors t o promot e consumption of alcoh olic beverages i s prohibi ted. No thing in this secti on shallbe dee m ed to restrict or prohi bit any adverti sement of alc oho lic beverages to thos e persons of legaldrinki ng age.
(5) No advertis ement shall be permitted, ei ther di rec t ly

or indirec tly, in any boo klet, program book, y earbook, maga zine, ne wspaper , period ical, broch u r e , circul ar or oth er sim il a r publication publis hed by, for
or in behal f of an y educati onal ins tit

ution.
(g) For purposes of t his subsect ion, the t e r m “adv ertisem ent” shallmean any adve rti sing of

alcoh olic beverages throug h th e
me d ium of rad io bro adca st, tele visi o n broadcast , newspapers, p eriodi cals or otherpubl i cati on, outdoor adve rtiseme nt, any form of electr o nic trans missi on or any other printed or

grap hic matter, i n cluding booklets, flyers or cards , or on t he productlabel or att ac h ment its elf.4

institu tions un der thi s
s e ction. Thu s, a n adverti semen t in a col lege newspaper or a coll ege foo tball progra m
an noun cing beverage s
wo uld not be permiss i ble. How ever, an advertisement

me rely in di cat

in g the n ame and addres s o f a li censee or license d premise, or an adve rtis ement w hic h indicates wh at non alcoh olic prod ucts may be acquire d at the lice nsed premise making

no refe rence to th e availa bility o f alco holic beverages would b e p ermissi ble. Further , adver tiseme nts i n magazines, newspapers or other period icals w hich have

no connecti on to a n educati onal institution other than the fact the school may subscribe to that

parti cular

new spaper are perm issible

.

. . . During testimo ny in th i s ca se, a repres entative of the LC B, F aith S. D iehl, stated that, in the LCB’s vi ew, Secti on 4

- 498 contai ns two rest

rictions that are not expr essly set ou t in the s tatut e. First , Diehl testifie d that

Sectio n 4-4 98 is e nfo rceab le only against

adverti sers andnot agai nst the

m edi a

. Seco nd, ac cord ing to D iehl, Section4-498 appli es onlywhen the m edia recei ves some f orm of payment

for an adve rtiseme nt. 2

On December 9, 1997, Ter ry Luc a s, the general manager of Th e Pi tt News , recei ved a fax f

rom the owner of an ar ea restau rant, the Fuel & Fuddle, which had prev iously placed al coholic beverage adve rtiseme nts i n t he paper. The fax consisted of

a December 4, 199 8, letter to the rest au rant from the Bureau of Li quor Control Enf orcem ent of the P enns ylvania State Pol ic e ( BLCE) st at in g that th e BLCE had receiv ed inf orm ation th at the F uel & Fud dle had “advertised .

. . alcoh olic beverages, either d irectly or ind irectly, in

a publication pub lished b y, for or in beha lf of an educati onal ins tit

ution” and that

this could resul t in t

he suspensi on or revocation o f its lice nse or i n the imposition of

a fin e. Based on this notice , the owner of the r estau rant ca ncele d its adverti sing contrac t with T he Pitt News, and t he pa per, in o rder to protec t i t s advertisers, felt compelled t o s top accep ting alcoholic bev era g e adv ertise me nts.
The Pitt Ne ws then s oug ht to persua de establ ishments with li qu o r

2 The P itt

New s submitted the depo sit ion of Stanl ey Woloski , an emp lo yee of the Office of the Chief Counsel of t he Pennsy lvania State Pol ice who is ass igned to th e Bureau of Liquor Control Enforcement (BLCE), which stated that, w hil e Woloski did not “w holeh earted ly agree” w ith Diehl’s inter pretat ion of the st atute , the BLCE was bound by the LCB’s inter pretat ion.5

lice nses to pla ce ad s that did not ref er to th e sale of alcoholic beverages, but t hese effo rts were unsucc essful. In 1998 alone, the newspaper lost appr oxim ately $17,000 in revenue, and this loss af f ected the length of the new spap er, as w ell as its ab ility to make capital expen diture s , includi ng payment s for updating its comput ers and acquiring digitalcameras. The ina bili ty to make thes e capit al

ex penditures has harmed The Pitt New s ’ abil ity to compete for

readers with other newspapers. Furthermore, the newspaper may be co mp elled in the fu ture to b egin to charge subscri ber s, and this w ould result in a fu rthe r de crea se in read ersh ip.
In Ap ril 199 9, The Pitt Ne ws 3 file d

a complaint

in th e United States Dist rict Cou rt f o r the Weste rn District of Pen nsylvan ia again st state offici al s respo nsible for the enfo rcem ent of the A ct. Ass er ti ng c la ims und er42 U. S. C. § 1983, The Pitt News alle ged that Section 4- 498 violated its consti tutional rights to freedo m of exp ress ion , free dom of th e pr ess, a n d the equa l prot ectio n of the la ws

. The Pitt News moved for a prelimina ry injunct ion, and an evidentiaryhearing was hel d.
In July 1999, t

he Dist ric t Court denied the motion for a prelimina ry injunct ion and h eld tha t The Pitt Ne ws lacked sta ndin g to ch alleng e th e
cons tituti onal ity of Secti on 4-498. The Distri ct Co urt op ined th at The Pitt Ne ws could not a ssert

First Amendment rights on beha lf of advertise rs o r reader s and that the paper had not

itself suffered any injury in fact b ecau se it cou ld sti ll pu blish anyt hing it wante d as long as i t was not paid for it.
On appeal, a panel of this C our t ( the “ TPN IPan el ”) aff irme d the Distri ct Cou rt’s denia l o f the p reli minar y injunct ion applic ation, but the panel rel ied in part on differe nt gro und s. See The Pitt News v. Fis her , 215 F.3d 35 4, 360 (3d Cir. 2000 ) (“ TP N I ”). Whil e the TPN IPanel agreed with the Dis tri ct Court t hat The Pitt Ne ws did not have st anding to a ssert the third-p arty clai ms of its adve rti sers and readers, the panelfound that The Pitt Ne ws did have standing to raise it s own First Amendment claims. No ting the pape r’s loss of advertisi ng revenue, the pane l held that the paper

had “d emonstrated a personalstake in the ou tcom e of th is litigati on” and that its i nju ry was b oth tracea ble to Section 4- 498 and redres sable by the cou rts. TPN I , 215 F.3d at 360
After determi ni ng that The Pitt News had standi ng to chal lenge Section 4- 498, the TPN I Panel turned to the f amili ar four-pro nged pr elimin ary injunc tio n analysi s, under which a court asse sses “( a) the likel ihood that

the plainti ff

will pre vail

on the m erits at th e finalhearing; (b) the extent to which the plaint

iff is b eing irrepara bly harmed b y t he conduct complainedof; (c) the extent to which the defendantwill su ffer irre parab le harm if 3 The A merican Civil Liberties U nio n StudentClub joine d as a plai ntiff, butt he Distri ct Court dis missed the club for lack of stand ing at a n early point i n the litigati on, and that

order i s not co nte sted her e.6

the preliminaryinjunction is i ss ued; and (d) the pu blic interest. ” TPN I , 215 F.3dat 366. At the fi rst s tep of th is anal ysi s, the TPN I pane l conc luded that The Pitt Ne ws “ha[d] not sh ow n a lik e lihood of succeedi ng on t he m erits.” Id. at 367. The Court reasoned as follows:
The fact th at The Pitt Ne ws is a newspaper does not

give it a con stitutiona l right to a certain level of

pr of ita bi lity,

or even to stay i n business at al l.

. . . Thu s, althou gh it is true t hat the enforcementof Ac t 199 has had the e ffect

o f driving aw ay certa i n closely regulated business es who previous ly ad v erti sed i n T he Pi tt News , thi s does not in itself a mo unt to a violat ion of T h e Pitt News’ Firs t Am end me nt rig hts.
Id. at 36 6.
The TPN I pane l we nt o n to rej ect The Pitt New s’ reli ance on the “l ine of

cases hold ing tha t it is unco nstitution al to impose select

ive taxes orot her financial burdens on n ew spap ers be caus e of th eir

con tent.” TPN I , 215 F.3 d at 3 66- 67. The panel found the se cases to b e disting uisha ble because , “[f]i r st, they involve taxes, no t reg ulations o n adverti sing” a nd , “[s] econd, they i nvolve fees l evi ed d irect ly aga inst a new spa per .” Id

. at 367 . The pane l thus h eld tha t The Pitt News had failed to sati sfy the fi rst prong of the test for the is suance of a preliminary in

j unction, and the panel cons eque ntly did n ot go on to analy ze any of the other prongs. 4 Following the decisi on in TPN I , the parti es fil ed cross- motions for

summ ary judgment, and the District Cou rt issuedan order gr ant ing sum mary judgmentfor the d efe nda nts. The Pitt News then to ok th is app eal.

II.
W e e xercis e plenary r eview of a Distri ct Court deci sion granting summ ary jud gm ent. See , e.g. , Olso n v. G en. E le c

. Astrospace , 101 F .3d 947, 95 1 (3d C ir. 1996). M oreover, under the c ircumst ances present h ere , the prio r pan el’s de cision in TPN I is no t con trollin g. When a pane l is prese nted w ith legal issues that are rel ated t o issues prev iously addr essed by anoth er pan el in

an earlier a ppea l in th e same case at the preliminary injunct

ion stage, threesepa rate
r ules are rele vant. F irst, it is our C ourt’ s trad itio n that a

panel may not overr

ule “a holding” of a prior

panel. 3d C ir. IOP 9.1. Second, it is well e sta blis hed that neithe r this tradi tion n o r the law-of-the-case doctri ne requires a panel hearing an appeal from the ent ry of a fin al judg men t to fo llow the le gal anal ysi s contai ned in a prior panel decisi on addressi ng the questi on wh ether a

partythat moved for preliminary injunct

ive r e lief

showed a

4 The Pitt News’ petit

ion f o r a writ of certi orari wa s de nied

. See The Pi tt News v. Fis her , 531 U.S . 111 3 (2 001 ).7

likel ihood of s ucc es s onth e me rit s. See Un iversity of T exa s v. C amen isch , 451 U.S. 390 , 395 ( 198 1); C ouncil of Alternat ive Political Parti es v. Hooks , 179 F.3d 64, 69 (3d C ir. 199 9); Am erican Civil Libe rti es Union of New Jersey v. Black Horse Pike Regional Bd. of Educ. , 84 F.3d 14 71, 147 6-14 77 (3 d C ir. 1996 ). Thir d , alth ough a panel en tertaining a preliminary injunct ion appe al gen erally decid es on ly whether the dis tri ct court ab u sed its discr etionin ruli ng on the reque st for reli ef and gener a lly does no t go into the m erits any farthe r than i s necessary to dete rmine whether the movi ng p artyestabl ished a likel ihood of success, a panel is n ot alw ays required to take this narrow app roa ch. If a p reliminary injunc tion ap peal p resen ts a qu esti on of law “and the f acts are establi shed or of no contr olli ng relev ance, ” the pane l may decide the meri ts of the cl ai m. Tho rnbu rgh v . Am . Coll ege of Ob stet rici ans & G ynecologist s. , 4 76 U

. S

. 747, 756 -57 (1 986 ); see also M ald ona do

v. Houston , 157 F.3d 179, 183- 84 (3d Cir. 199 8).
In the typi cal situation – w here the pr iorpane l stopp ed at th e que stio n o f likel ihood of success – the pr ior p anel’s legal analy sis mus t be caref ull y
cons id ered, but it

is not binding on t

he late r pan el. In deed, particularly whe re important

First A men dm ent i ssues are rais ed, t he lat er panel has a duty , in t he end, to exe rcise its o wn best jud gm ent. On the other hand, if the fir st panel does n o t stop at the quest ion of like lihood of

success and ins tead addresses the merits, the late r panel, in accor danc e w ith our Cou rt’s tradi tionalpracti ce, shou ld regard its elf as boundby the prior panel opinion. Here, the TPN I panel did no t de cide wh ether S ection 4-49 8 is or is no t
cons titutional. Inste ad, the TPN I panel

was caref ul to state on ly that The Pitt Ne ws

“ ha[d] not shown a like lihood of succeedi ng on the merits of its c laim .” 215 F. 3d at 367 (emphasis added). Had the TPN I panel gone furtherand taken an unequivocalpositio n on the m erits , we
wo uld consider

oursel ves bound underthe tr aditio n expresse d in IOP 9.1. But the TPN I pan el did not take that a ppr oac h.

III.
We now turn to the quest i on 5 whether Section 4- 498 vi ol ates The Pitt News’ First Amendmen t rights. 6 We

5 At the outs et, we note two iss ues that

are not before us . First, th e Co mm onw ealth does not suggest that The Pitt News repres ents the Com mon wealth’s

own speech as oppos ed to inde pen den t st udent spee ch tha t the U nivers it y facil itates in order

to foster the e xpressi on of a dive rsity of v iew s, see Rosenbergerv. Rector& Vis itors of U niv . o f Vi rginia , 51 5 U.S. 819, 833 ( 1995). Nor does t he Comm onw e al th sugg est that p reced ents concerni ng pub lications assoc iated w ith scho ols below the c oll ege leve l, see , e.g. , Hazelwood School Dist . v. Kuhlmei rer , 484 U.S. 260 (1988) , have anyrelevance her e.

6 The Pitt Ne ws urges us to revis it t he issue of i t s standing to assert the First8

conc lu de tha t Secti on 4-498 i s unconsti tuti onal as ap plie d to The Pitt News for two reas ons. Fi rst, the la w repres ents an impermis sibl e rest riction on commercial spe ech . Sec ond , th e law is presu mp tively u n cons titutional b ecau se it targets a narrow segment of t he media, and the Co mm onw ealth has notover com e this pre sum ptio n. A. Although the Common we alth makes much of the fact

that Sec tion 4-498
does not p rohib it The Pitt News from printing alcoh olic be verag e ads but sim ply preve nts the paper from receiv in g payme nts for runni ng such ads 7 , Section 4- 498 c lea rly restri cts speech. T he very purpose of Secti on 4-498 is to dis courage
a form of speech (alcoholic beverage ads) that the C om mo nw ealt h regards as harm ful. If govern ment w ere free to suppress disfavor ed speech by pr eventi ng potenti al speakers fr o m being paid, there

wo uld not be much le ft of the Firs t Am endm ent. Imposing afinanci al burden

on a speaker ba sed on the co ntent o f the speaker’s e xpressi on is a content-bas ed restriction of ex pressi on and must be

ana lyzed as su ch.
The Su p reme Co urt’s de cision in Simon & S chuster, Inc. v. Members of the N ew York State Cri me Victims Bd. , 50 2 U.S. 105 (1991), illust rates thi s p oint. There, a career

criminal named He nry Hill provi ded an author wit h the inf ormation that the author used in writing a book about Hill’ s li fe. Under a cont ract wit h the book’s pub lis her, H ill was e ntitled to compensati on, but New York’s “Son of Sam” law required that

these funds be held in escro w for fiv e years fo r use in sati sfy ing any civiljudgments obt ained by the victi ms of H ill’s cr ime s. Although the Son of Sam law d id not prohi bit Hil l from tell ing his stor y and did not pr ohibit the publis her from publis hing the book, the Supreme Co urt held that th e law placed a content -based rest

rictio n on Hill’ s speech and that of

the pu blish er bec ause it “im pose[d] a fina ncial disi ncenti ve onlyon speech of a particular content .” Id . at 116. Si m ila rly, Secti on 4-498 imposes “ a financi al disi ncenti ve” on ce rta in speech by The Pitt News (alcoh olic beverage ads) because would-be advertisers c a nnot pay the pa pe r to run such ads, an d

cons eque ntly Section 4- 498, li ke New York ’s Son of Sam law, must be anal yzed

as a con tent- bas ed r estric tion of s pee ch.
At a minim um, there fore, Section4- 498 must satisfythe te st for rest rictions on commercial speech set out in Central Hudson Gas & Elec. Corp. v. Pub. Serv. Com m’n of New York , 447 U.S. 557 (1980). Und er Central Hudson , we m ust Amendment right s of it s advertiser s and readers. We find it un necessary t o reach this issue, however, becaus e we hold that Section4-498 violates The Pitt Ne ws ’ own Firs t Am end me nt rig hts.

7 In dee d, th e Comm onw e alth sug gests that The Pitt News has not “suffered a First Amendment violat

ion” becaus e Secti on 4- 498 “places no restriction on wh at the P itt News can or cannot

publish.” A ppellee’s Br. a t 9.9

engage in “a f our-p art ana lysis .” Id . at 566. First, “w e mu st dete rm ine whether th e expr ession is prote cted b y the Fir s t Am end me nt,” and this means that “it at least must con cern lawful activit y andnot be misleadi ng.” I d . Se cond, “we ask whether the ass erted governmental interest is subs tanti al. ” Id . If the fir st and second “inquiries yield positive answers, we mu st determi ne wh ether th e regu lation d irectly adv ances the gove rnmen tal intere s t asserted, and whe ther it is not more extensi ve th an is nece ssaryto serve that interest. ” Id

. He re, the f ir st an d second prongs are sati sfied. As noted, Section4-498 burdens speech. In additi on, the la w ap pli es to ads that

concern lawful activit

y ( the la wful sale of alcoh olic beverag es) and that are not misleadi ng, and we see no other gr ound on which it could be ar gued that the cover ed ads are outs ide theprotect ion of the First Am end me nt.
There can also be no disput e that the asserte d go vern men t inte res ts – preventi ng underage dri nking and alcohol abuse – ar e, a t mi nim um , “su bsta ntial .” See , e.g ., Lo rillard To bac co C o. v Re illy , 533 U.S. 525, 589 ( 2001)(opi nion of Th oma s, J.); M ichiga n D ept. of State Police v. Sitz , 496 U .S. 444, 451 (1990).
Section4-498 f ounde rs , how ever,
on the third and f ourth pr ongs of the Central Hudson test . To s at isfy the third prong , t he go vern men t mus t dem onstra te that the chal lenged l aw “allev iat e[s]” t he cite d harms “to a materialdegree. ” Flori da Bar v. Went For It, Inc. , 515 U.S. 618, 624 (1995)(c itat

ion om itted); see also G r eater New Orlea ns Broad. Ass’n, Inc. v. U. S. , 527 U.S. 17 3, 188 (1 99 9) . Although t he governmenthas consi derable latitu de in the sources on which it maydraw to make this showing, “[t]his burden is not satisfi ed by mere spec ulati o n or con jectu re.” Ede nfield v. Fane , 507 U.S. 761, 770 -7 1 (1993); Lorill ard Toba cco C o. v. R eilly , 533 U.S . 525, 5 55 (2 001 ). Furth ermo re, it is not en oug h if a la w “ prov ides o nly ineffective or remot e su pport for the govern ment’s purposes, ” Ede nfield , 507 U.S. at 770 (quoting Central Hudson , 447 U.S. at 564 ) or if the re is “little chan ce” that the la w will advance t

he state’s goal. Lorillard , 533 U.S. at 566. The S upr eme Cou rt has notedthat the third prong of the Central Hu dson test “is critical; otherwis e, ‘a State could with ease re str ic t
com merc ial spee ch in the servi ce of other objectives that c ould not them selv es just ify

a burd en on com mercial exp ression.’” Ru bin v. Coors Brewing Co. , 5 14 U.S. 4 76, 487 (1995)(quot

ing Ede nfield , 507 U.S. at 771 ).
In thi s case, the Commonwealth has not show n that Section 4 -4 98 com bats underage or abusi ve dri nking “to a materi al degree, ” Flori da Bar , 515 U. S. at 624, or that

the la w provides any thing

more than “ineff ective or rem ote suppo rt for the go vernm ent’s purp oses. ” Ed en field , 507 U.S. at 770 ( quoting Central Hudson , 447 U.S. at 564 ). We do not di spu te the p ropo sition tha t alcoh olic beverage adverti sing i n ge n eral ten ds to encourage cons umption, and if Section 4- 498 had the e ffect of greatl y r educing the quan tity of alcohol ic bever age ads viewed10

by underage and ab usive drinkers on the P ittcampus, we would hold that the thir d prong of the Central Hudson test w as m et. But Sec tion 4-4 98 ap plies on ly to adve rtis in g in a very

narrow sect or of the medi a (i .e ., me dia ass ociate d w ith educati onal inst itut ions), and th e Co mm onw ealth has not poi nted to any evidence that elim inating ads in thi s
narrow sector wil l do an y good . Eve n if Pitt student s do not see alcohol ic bever age ads in The Pitt Ne ws , they wil l sti ll be exposed to a tor

rent of be er ads on tele visi on and the ra dio, a nd theywill still

see alcohol ic b everage ads in other publications, includi ng the othe r free

we ekly Pitt sburgh papers that ar e disp lay ed on campus together with The P ittNews . The suggestion that the elimi nationof alcoholic beverage ads fr om The Pitt N ew s and other publ ications connectedwith the Universi ty will s lacken th e dem and f or alco hol b y Pitt studen ts is counteri ntuitive and unsupport ed by any evidence th atth e Comm on wealth has call ed to o ur a ttent ion

. No r has the Co mm onw ealth pointed to a ny evi dence that the elimi nation of

alcohol ic bever age ads from The Pitt Ne ws will make it harder for would-be p u rchaser s to l ocate pl aces
near campus where alcohol ic bever age s
ma y be purchased. Com mon sense sugg ests that

wou ld-be drinkers will have

no diffic ulty findin g th ose establish men ts desp ite Sec tio n 4-4 98, an d th e Commonw ealt h has not poi nted to any contrary evidence. In contendi ng that underage an d a bus iv e d ri nki ng w i ll f all if

a lcoho lic beverage ads are el imina ted fro m ju st those me dia affi liated with educational in sti tutions, the Commonwealth rel ies on nothing more than “spe culation ” a nd “conject ure.”
Sect ion 4-49 8 is also not ad equa te l y tail ored to ach ie ve t

he Co mm onw ealth’s asserted objectives. The fou rth step of t he Central Hudson test

do es n ot require governmentto use t

he least restrictive

means to achi eve it s goals, but it does demand a “ re asonable f it between the legislature’s ends and the means chosen to accomplish tho se e nds, . . . a means
narro wly tail ored to ac hieve the desired obj ectiv e.” Lorillard , 533 U.S. at 555 (quotations omitt ed). Here, Section4-498 is both severel y over - and under- inclus ive. As noted, more than 67% of Pitt stude nts and more than 75% of

the tota l Un iversity populati on is ov er the le gal dri nking age, and, in Lorillard , the Supreme Cour t held th at a restrictio n on tobac co ad vertisin g
was not narrowly tai lored in part because it prev ented the co mm unica tion to a dults of trut hful inf ormation about product s that adults could la wfullypur cha se and use. Not only does Sec tion 4-498 s uffer f r om this sa me de fec t, but

th e Comm onw ealth

can seek to com bat u nderage and abus ive drinki ng by other mean s that are far m ore di recta nd that do not affect the First Am endm ent. The mos t d irec t way t o combat underage and abus ive dri nking by colle ge stude nts is the enfor cement of the alcoh olic beverage cont rol l aws on college campuses. Howe ve r, studi es ha ve sh own that enforcementof

these l aws on college11

campuses is oft en half- hearte d 8 , and the Co mm onw ealth has notdemonstrated that its law en f orcement offi cers, at ei ther t he state or locallevel , orthe adm inistrators of its colleg es an d un iversities e ngag e in aggressi ve enforcement of t hese laws on colle ge a nd u niv ersity c am pus es. In arguing t

hat Section 4-498 sati sfies the Central Hudson test, the Co mm onw ealth r eli es he av ily o n Anheus er-B usch, Inc. v. Schmoke , 63 F.3d 1305 (4 t h Cir. 1995) , which sus taine d a Balt imore or dinan ce tha t gene rall y proh ib i ted outdoor alcoholic beverage ads. That de ci si on, how e ver, predate s Lorilla rd , which struc k down a ban on outdoor tobacco ad ve rtis in g, a nd in an y eve nt, Baltimore’s showings in Anheuser-Busch

on the third and fourth pr ongs of the Central Hudson test

were str onger than t

he Comm on wealth’s are here . Because t he ordinance in Anheuser-Busch applie d (with some e xceptions) to a n entire medium of communicati on (outdoor advertising), there was a firm er basi s for concludi ng that the law w ould achie ve its objective (reduci ng underage dri nking) than there i s in this cas e, wher e the cha lle nged law appli es to onl y a nar row sector of the media. Similar ly, in Anheuser-Busch , there w as less f orce to the argument that the city cou ld achie ve its goal by the alternative stra t egy of increa sing enforcementof the laws against underage drinki ng. Because the Baltimore ordinance w as desi gned to combat underage d rin kin g th rou gho ut th e city, a decisi on to forego t

he outdoor adve rti sing ban in favor o f a cam paign of incre a sed enforcementwould have nec es sit ated an increase in enforc ement overa wide area. Here, incr e ased enforce ment could t arget
ve r y limited, easilyidentifiabl e areas –
na m ely, univ ers ity

and coll ege campuses and su r r ou nd i ng ne i gh bo r ho od s. We thus find A nheuser Busch to be dis tingui shabl e , and we hol d t hat Section 4-498 fai ls the Central Hudson test.

B.
Section 4- 498 violates the First Amendmen t for an additi onal, independent

reason: it unju stifiably imposes a fi nancial burden on a parti cular s egment of the media, i.e., med ia asso cia ted w ith uni ver sities and colle ges

.

1.
The Supreme Cou r t recogni zed long ago th at law s that i m pose speci al financi al burdens on the media ora narrow sector of the media present a th reat to the FirstAm end me nt. In Gros je an v . Am. Press Co. , 297 U.S. 23 3 (1936 ), Louisiana had imposed a special 2% gross r eceip ts 8 See Henry Wechsle r, Barbar a A

. Moe ykens, and W ill iam DeJong ,
“ Enf orcing the Minimum Drinking Age Law: A Survey of College Adm inistrators

an d S ecurit

y Chief s” (2001), avail able at http :/ /ww w. edc.o rg/h ec/pu bs/en force .htm

. This study, conducted by the Harva rd School of Publi c Health andpublis hed by the U.S. D epartmen t of Edu cation’s Highe r Education Cent er, conc luded that “a detai led exam in ation of how rules against underage dri nking a r e curre ntly enforced re veals a wide spread l axity .”12

tax on new spap ers with circul ations of

more than 2 0,000 . The Co urt noted that the for m o f the ta x m ade it p lain tha t its purpose was to penali ze and curt ail t he circul ation of “a sel ect group o f

new spa per s,” namely , as t he Court later pointedout, t

he state’s l arge paper s, which had attac ked Go ver nor Hu ey Lo ng. See M innea polis Star & Tribune Co. v. M innes ota Comm’r of Revenue , 460 U. S. 575, 579-80 (1983) . Holding t his t ax unconsti tuti onal, the Court wrote: The tax here invo lved is bad not because i t take s money from the pockets of t he appellees. If that were all, a wh olly differe n t question

wo uld b e in p resent ed

. It is bad because, in the lig ht of its hist ory and of i t s present setting, it is se en to be a deli berate an d calcul ated device i n the guise of a tax t o limi t the circul ationof

information to which the publi c is en ti tled i n v irtue of th e consti tuti onal gua ran ties. A free press s ta nds as one of the gre at inter preter s between th e go vernme nt an d the people. To allow it

to be fett ered is to fette r ourselves. Grosjean , 297 U.S . at 25 0.
In M inn eapoli s Star , the Court struc k down a state l aw that re quired publications t o p ay a use tax i f they consumed more than $1 00,000 worth of paper and ink in a

year . This t ax, l ike the

one in Grosjean , had the effect of f avoring

sma ll newspapers over

large one s, but

the Cou rt did n ot sug gest tha t the M innes ota legislature had passed the chall enged law in orde r to retaliate for an ything tha t th e covered papers had s aid in t he pas t or to influe nce anyt

hing that t

hey might publish in the f utu re. See id . at59 2. Rather , the Cou rt held that, regardl ess of the legislature’s motives, t he state was req uire d to sho w th at the d ispara te treat ment of large an d small pap ers was needed to serve a compelli ng state inte rest, id

. at 585, and the Court concl uded that the state had n ot satisfie d t his te st, id . at 586- 92. T he C ourt o bserv ed:
Wh atever

the moti ve of t h e legis lature i n thi s c as e, we think that recognizi ng a p o wer in the S tate no t only to single out the pre ss but also to tai lor t

he tax so t

hat it singl es out a few m embe rs of the pres s present s such a potenti al for abuse tha t no interest sugge sted b y Mi nnes ota can justifythe scheme.
Id . at 591-92.
In Ar ka ns as Wr iters’ Proj ect, Inc. v. Ragland , 481 U .S. 221 (198 7), the Cou rt considered a fea tu re o f Arkansas’s gross receip ts tax. Under the Arkansas scheme, general interest magazi nes were subj ectto the tax bu t religiou s, prof essio nal, trade, and sports j our nals we re ex em pt. Id . at13

221, 226

. Noting that the Arkansas

sc heme d rew distinctio ns betwee n publications based o n conten t, the Court appli ed stri ct scr

utiny and held that the

sc heme was unc ons titutio nal. Id . at 231- 32.
B y c ontras t, i n Leathers v. Medlock , 499 U .S. 439 (199 1), the Cou rt rejec ted th e a rgument that the Arkans as
sc heme vio la ted the First Amendment by exempting newspapers but not cable te levis ion. The Co urt no ted tha t th e Arkansas tax was “a tax of gener al ap pl ica bi lity” that ap plied to “r eceip ts from the sale of a ll t angible personal proper ty an d a b roa d ra nge of s erv ices .” Id

. at 44 7. The Court further observed that “[t]he tax does not si ngle out t he press and does not the refor e th reate n to hinder the pre ss a s a watchdog of government activ ity.” Id . Stating that “there [was] no in dication that Arkans as ha[d] t arget e d cable televisio n in a p urpo sefu l attemp t to interfere with its First A m endment acti viti es ,” the C ourt co ntinue d: “N or is the tax one that

is structured so as to raise suspici on th at

it wa s inten ded to d o so .” Id

. at 448. “Unlike the taxes i nv ol ved in Grosjean and Minneapolis St ar ,” the Cou rt wrote, the Arkansas ta x did not “select[] a

narrow g roup to bear

fully the burden of the tax.” Id . In addi tion, the Court s tate d that the fe ature o f th e Ark ans as sc heme that was then at issue was “st ruc turally di ssimilar” to the f

eature chall enged i n Arkansas Writers’ , w he re “o nl y ‘ a f ew’ Arkansas magazines pai d the State’s sales tax. ” Id

. 2.
Under the above cas es, l aws that impose financial burdens on a broad class of entit ies, includi ng the media, do not violate the Firs t Ame ndm ent. “It is bey ond disput e that

the States and the Federal Government can subj ect [the media] to genera lly

applic able eco nom ic regulat ions without creati ng consti tuti onal pro blem s.” M innea polis Star , 460 U.S. at 581. A b usine ss in the com mu nic ation s field cannot escape its o b ligation to
com ply wit

h ge ne ra ll y ap pl ic ab le la ws on the ground that

the cost

of compliance

wo uld be p roh ibitiv e. As TPN I put it , “a newspaper does [n ot have] a consti tuti onal right to a certain l evel of pr ofitabili ty , or
even to st ay i n business at al l.” TPN I , 215 F.3 d at 3 66.
At the same time, ho wev er, cou rts must be w ary that ta x es, regulatory laws, and other l aws that i mpo se financi al burdens are not us ed to undermi ne fr eedom of the pre ss and fre edom o f speech. Government can attempt to cow the media in gener al by si ngling i t out for specialfinan cia l burdens. Government

can also se ek to control, weaken, or destr oy a disfavored segment of the med ia by t argeti ng that s egment. Speaki ng of the diff erence be tween genera ll y applic able tax la ws and tax laws that target the med ia or a s egm ent o f the m edia, the Supreme Court has expl ained:
A p owe r to ta x di ff er en tia lly, as opposed to
a po w er to tax ge ne ra lly, gives a gov ernm ent a14

powerful weapon againstthe taxpay er sele cted

. When the State im p oses a gene rally applic able tax, there is little

cause for con cern

. We need not fear that a government will destr oy a selected group of ta xpa y er s by

bur den som e t axati on if it must i mpose t he same burden on the rest of its co ns titu en cy.

. . . When the State singl e s out the pres s, tho ugh , th e political constr aints that preventa legi slat

ure from passing crip pl ing taxe s of g eneral applicability are weakened, and the threat of bur den som e taxes bec omes acute. T hat threat

can oper a te as effectivelyas a
censorto check criti cal

com me nt b y the p ress

. . . . Minneapolis St ar , 460 U.S . at 58 5.
To prevent s uch abuse, l aws that impose specialfinanci al bur den s on the media or a se gment of the medi a must be caref ully exam in ed . A la w i s presu mp tively invali d if it “singl e[s] out the p ress ” or “a s ma ll gro up o f sp eak ers.” Leathers , 499 U.S. at 447 . This presumpti on is not lim it ed to in stance s in which there i s evidence that t he law repres ents a “pu rpose ful attem pt to interfere wit h . . . F irstAmendment activ ities.” Id . at448 . Ev en “ wh ere . . . there is no evi dence of an imprope r censori al motive, ” Arkansas Writers’ , 481 U.S. at228 , ala w is pr es ump t ively unconsti tuti onal if it is “st ructured so as to raise susp icion th at it wa s intend ed to [interfere with protec ted expre s sion ].” Leathers , 499 U.S. at 448. Once the presumpti on of unconstitutionali ty arises, it ca n b e o ve rc om e o nl y b y s howing that the challenged law is need ed to serv e a compelli ng in teres t. Minneapolis St ar , 4 6 0 U.S . at 58 2, 58 5. 3. Applyi ng these s tanda rds, w e hold that Sectio n 4-4 98 v iolates th e First Am endm ent. To be gin, the Ac t’s structure makes it pres um ptively un cons titutional. Like the provi sions s truc k dow n in Grosjean , Minneapolis St ar , and Arkansas Wr it er s’ , Sectio n 4-4 98 sin gles o ut a relatively “small group” of speakers. Leathers , 499 U.S . at 447 . By it s terms, Section4-498 is l imit ed to media af fili ated wi th educati onal ins tit utions , and i n practi ce the scope of the Ac t is und oub tedly even nar ro wer. Because
new spapers and other medi a af fili ated w ith elemen tary and seconda ry scho ols are most unlike ly to seek to run alcohol ic bever age ads, Section 4- 498 in pract ice si ng les out med i a assoc i a ted w ith th e Com mon wealth’s u nivers iti es an d colleges. Accordingl y, t he structure of Section4-498 trigge rs the pres umption of unconsti tuti onal i ty and thus r equires the Commo nw ealth to sho w th at the A ct is “n ec es sa ry” to achieve what t he Court has descri bed as “an overriding gov e rnment interest” and an “interest of com pelli ng imp orta nce .” Minneapolis St ar , 460 U. S. at 58 2, 58 5.
The Comm onwealth has no t15

dischar ged that o blig ation

. For the r easons alrea dy discuss ed, the Commonw ealth has not shown that Section 4-498 i s “n ec es sa ry” to dis co urage undera g e drinki ng or abu sive drinking. The Co mm onw ealth has notdemonstrated that Sec t ion 4-49 8 has curb ed or prom ises to curb such dri nk ing to any ap precia ble degree. Nor has th e Co mm onw ealth sh own that i ts worthy

objectives cannot

be served a t least as well byother means, such as the di ligen t enforcement of t he alcoh olic beverage l aws on a nd around colle ge c am pus es. The Comm on wealth cont ends that

cases such as Grosjean, Minneapolis St ar , and Arkansas W riters ’ are inap pos ite because theyconcerned laws that required publications to pa y ta xe s, ra th erth an la ws that deprived t

he pub li cati ons of a sourc e of reven ue, bu t this diffe rence is ins ignifi cantfor pre sen t pu rpo ses. I n Simon & Schuster , the state noted that the Son of Sam law simpl y r eq uired t hat the funds in question be hel d in es cro w for five year s, and the state argued that the So n of Sam law w as ther efore quite differ ent from a tax law , wh ic h perm anen tly deprives the taxpa yer of the

mo ney p aid. See 502 U.S. at 116- 17. Rejecti ng this contention, t he Co urt w rote that “[b]oth f

orm s of financi al burden

o pera te as disi ncenti ves to spe ak.” Id. at 117

. Thus, the Supreme Court’s cases concerni ng dispar ate t axati on of the m edia

or of a segment of the media apply to other la ws that impose other types of dispa rate financi al burdens. The threat to the Firs t Amendment aris es from the imposi tion of financi al burdens that may have the effect of influe ncing or s uppressi ng speech, and whether th ose b urdens t ake the form of taxe s or s om e oth er fo rm is uni mp orta nt.
T he Commonw ealt

h a ls o sug gests that the tax cases a re inapplicable h ere because the laws struck down in those

cases imposed financial burdens directly

on th e media, whereas Section 4- 498, as int erpreted by the LCB, is direct l y
a pplica ble only to advert iser s. We rej ect this argument as wel l. Muc h l ike the proffered di sti nction be tween taxes and oth er financi al burdens , thi s argument disre gards the rea son for the presumpti ve
unco nst itutiona lity of laws that impose dispa rate financi al burdens on the media or segm ents of the media. As noted, s uch schemes are suspe ct becaus e theycan easily be us ed as a w ay of co ntroll i ng or suppress ing spe ech

. Be cause a l aw that imposes a sign ifican t, but ind irect, financi al burden on the media or a se gment of the med ia can be used i n the same way and wit h th e sa me eff ect, t here is no princi pled reason t o draw a distincti on betw ee n laws that

impose direct and in di rectburdens of comparable prac tica l signi ficance. 9

9 We al so note tha t w hi le t he Tw en tyFirstAmendment provides the State s with the a u thori ty to regul ate al cohol, such regulat ion is su bject “to t

he same First Amendment restri ctions that applyto the Federal Gove rnment. ” Rub in v. Coo rs Brewing Co. , 514 U.S . 476, 485- 86 (1995); see also 44 L iquo rmart, Inc. v. Rhode Island , 517 U.S . 4 84, 516-1716

As did th e TPN I panel, the Co mm onw ealth reli es on AM SA T C able Ltd. v. Cablevi sion of Connecticut , 6 F.3d 867 (2 d Cir. 1993) , and Warne r Comm unications, Inc. v. Cityof Nice ville , 911 F.2d 6 3 4 (11 th Cir. 1990) , but ne ither

case supports the Comm onwealth’ s position here. I n AMSAT , a satellite tele visi on company that had an exclusive agreementwith so me apartment buildi ngs to provide televi sion service t o the i r tenan ts chall enged a state la w that required apartment

buildi ng owners to gi ve acce s s to cable and antenna compa nie s that wanted to service the tenants. The satellite company argu ed tha t th e state anti -trust law was unconsti tuti onal beca use it w ould undermine the economic vi abili ty of satellite companies. Id . at 871. Rejecti ng this argument, the Seco nd C ircuit held that the satel lite compan y h ad no First Amendment right to a n exe mp tio n from the law simply

because such a law wo uld harm the c om pan y’s rev enu e. In AMSAT , th ere was no evidence that it was a targeted atte mpt to suppr ess speec h, rat her than a gen erally app licable a nti

- trust sch em e. Id

. AMS AT plainl y di ffers fr om the present ca se in se ve ra l res pe ct s. As far as the AM SAT opin ion rev eals, the satellite law was p art of the state ’s ove rall eff ort to combat monopolies and t here was nothi ng abou t the structu re of th e law at issue in that case that gave ri se to a presumption of

u nc on sti tu tio na lity. As state d above, med ia are not e xe m pt from gene rally applic able laws or schemes si mp ly becau se theyharm the me dia’ s pro fit. M innea polis Star , 460 U.S . at 581. Section 4- 498, how e ver, is spec ific to ce rtain m edia content and s pecif ically targets c ertain ty pes of media. I t is not part of a gen erally app licab le sc hem e. The Elev enth C ircuit’s d ecisio n in City of Ni cev ille is even farther afiel d. There, Warner, a l eading c able provider, clai m ed that t

he city’ s entry i nto the marketas a competi ng cabl e pr ovider violate d Warner’s Fi rst Amendm ent rights

. The Elev e nth Circuit rejected W arner’s cl ai m, holding that

the city w as en titled to enter the market

and that Warne r h ad no FirstAmendment right t o be f r ee from competition. Id

. at 6 37-638. The argumentthat

the Court rejected in Cityof Nicevi l le – that t

he First Amendment protec ts a med ia comp any fro m
com petitio n by a state -sponsore d enterprise – simplyhas no rel evance in t he present cas e. He re, the C om mo nw ealth is not damaging The Pitt Ne ws by spons oring

a competing publ ication; it is damaging The Pitt Ne ws by prev enting it, and a sma ll group o f simil arlysituated media, from generating reven ue fro m ad s of sp ecific conte nt. While there was no indication of intent to sup press s peec h or h arm s pecif ic med ia in City of N iceville , these elem ents do exist in our cas e. (1996)(“ [W ]e now hold t hat th e Twen ty- first

Amendment does not quali fy the co ns ti tu ti ona l p ro hi bi ti on a ga in st la ws abridgi ng the fre edom of speech embodied in the Fi rst Amendment. ”)17 IV.
For th ese reas ons, we hold t hat Section 4-498 viol at es the Firs t Amend ment as appli ed to The Pitt Ne ws
. We theref

ore rever se the o rder of the Distri ct Court and remand for the entry of

a permanent i njuncti on a g ainst the enforcementof Secti on 4-498 with r espect to an y adv ertise me nts in that p ape r.