Opinion ID: 161369
Heading Depth: 4
Heading Rank: 3

Heading: Whether Utah's Laws Directly Advance the State's Interests

Text: 47 ULBA next contends that the district court was incorrect when it concluded that, for the purpose of surviving summary judgment, Utah's laws satisfied the third part of Central Hudson. The third part of Central Hudson concerns the relationship between the harm that underlies the State's interest and the means identified by the State to advance that interest. Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 2404, 2422 (2001). We must therefore consider whether Utah's laws restricting liquor advertising directly and materially advance its interests in temperance and the operation of a public business. See Greater New Orleans, 527 U.S. at 188. 48 The Supreme Court has stated that [t]he party seeking to uphold a restriction on commercial speech carries the burden of justifying it. Bolger, 463 U.S. at 71 n.20. This burden is not satisfied by mere speculation or conjecture; in order to meet its burden, Utah must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree. Edenfield, 507 U.S. at 770-71. In addition, a speech regulation may not be sustained if it provides only ineffective or remote support for the government's purpose. Greater New Orleans, 527 U.S. at 188 (quoting Central Hudson, 447 U.S. at 564). The Court cautions us that these requirements are critical, for otherwise, a State could with ease restrict commercial speech in the service of other objectives that could not themselves justify a burden on commercial expression. Coors, 514 U.S. at 487 (quoting Edenfield, 507 U.S. at 771). 49 ULBA suggests Utah has failed to carry its burden for three reasons. The first two of these concern the reality of the alleged harms, and the third pertains to their alleviation. First, since 1996, when Utah amended its laws and repealed a prior ban on beer advertising, there has apparently been no significant increase in the consumption of beer within the state. From this, ULBA concludes that beer advertising evidently does not affect beer consumption, and that the same is likely to be true with respect to liquor and the liquor advertising ban. Second, ULBA argues that the overwhelming weight of scientific evidence, including the expert testimony supporting [ULBA's] motion for preliminary injunction, tends to show that advertising does not increase alcohol consumption. Aplt's Br. at 19. In ULBA's view, these two facts demonstrate that the liquor advertising ban does not prevent any real harm. 4 50 Third, ULBA proposes that Utah also fails Central Hudson's third part because the state's inconsistent treatment of different types of alcohol ensures that its speech restrictions will not alleviate the harms they are designed to redress, thus making the scheme irrational under Coors. In Coors, the Supreme Court applied Central Hudson and struck down a federal statute that prohibited the disclosure of alcohol content on the labels of containers of beer. The federal government's asserted interest was to prevent strength wars among beer manufacturers, and the statute sought to accomplish this by banning both numerical indications of alcohol content and descriptive terms such as strong and extra strength. Coors, 514 U.S. at 480-81. 51 In applying the third part of the Central Hudson test, the Court stated that the challenged beer label restriction cannot directly and materially advance [the government's] asserted interest because of the overall irrationality of the Government's regulatory scheme, under which there were additional provisions within the same statute, as well as other federal laws, that undermined any tendency of the labeling ban to prevent strength wars. Coors, 514 U.S. at 488. These included provisions that permitted descriptions of alcohol content in alcohol advertising, and permitted the disclosure of alcohol content on the labels of alcoholic beverages other than beer. Id. at 488-89. 52 According to ULBA, unless one form of alcohol is more harmful or dangerous than another, temperance cannot be promoted by a statutory scheme that permits some types of alcohol advertising and proscribes others. But, ULBA argues, Utah itself engages in a public health advertising campaign which states that there is no meaningful difference, other than equivalent liquid volume, among different kinds of alcohol. See Aplt's App. at 242 (advertisement declaring Alcohol Is Alcohol Is Alcohol . . . It's Not What You Drink. It's How Much.). Because Utah has presented no sound reason why advertising restrictions on wine and liquor confer more temperance benefits than comparable (but nonexistent) restrictions on beer advertising, ULBA concludes that Utah's ban on the advertising of only certain kinds of alcoholic beverages is irrational, and consequently unconstitutional, under Greater New Orleans and Coors. Aplt's Br. at 23-24. 53 Utah makes several counterarguments with respect to Central Hudson's third part. First, Utah contends that under Board of Trustees of State University of New York v. Fox, 492 U.S. 469 (1989), it is only required to achieve a reasonable fit, not a perfect fit, between its regulations and its goals. Aple's Br. at 21-22 (quoting Fox, 492 U.S. at 480). Under Fox, Utah states that in regulating commercial speech, it must employ not necessarily the least restrictive means but . . . a means narrowly tailored to achieve the desired objective. Id. Utah concludes that this gives it some latitude in selecting a permissible advertising restriction. Second, Utah argues that ULBA completely ignore[s] evidence submitted by the state, especially the statements of three physicians and public health officials, suggesting that alcohol advertising does affect the problems Utah identified as its substantial state interests. See Aple's Br. at 23-24; Aplt's App. at 140-57. 54 Third, Utah defends its distinctions between beer and liquor advertising as a permissible consequence of its decision, pursuant to its Twenty-first Amendment powers, to apply different regulations to beer and liquor sales. Because beer sales are not operated as a public business by the state, Utah suggests that it is not irrational to regulate beer advertising differently from liquor advertising. The state attributes this distinction to the fact that beer with a sufficiently low alcohol content was not considered an intoxicating beverage banned under the Eighteenth Amendment, and that when the Eighteenth Amendment was repealed by the Twenty-first, Utah continued to regulate low-alcohol beer in a manner different from other alcoholic beverages. See Aple's Br. at 25-27. 55 Before we conduct our own analysis of Central Hudson's third part, we must note an issue raised by Utah's arguments concerning the burden of proof. Utah seems to imply that because ULBA is appealing the denial of a preliminary injunction, it is ULBA's burden to affirmatively attack the Utah statutes, rather than Utah's burden to defend them. For example, Utah states that ULBA has failed to demonstrate that the trial court abused its discretion in determining that [ULBA] had failed to show that there was a likelihood they would prevail on the issue of whether the regulations directly advance the State interests. Aple's Br. at 22. Evidently, Utah either conflates the Central Hudson test and the test for the issuance of a preliminary injunction, or assumes that the allocation of burdens within this part of the Central Hudson test will shift as a consequence of the case's procedural posture. 56 Utah cites no authority in support of the notion that the Central Hudson burden should shift away from the state, due to the procedural posture of this case. However, we note that in its recent decision in Lorillard, the Supreme Court mentioned the procedural posture of that case in evaluating whether the state had met its evidentiary burden under the third part of Central Hudson. Lorillard in part concerned whether the State of Massachusetts had adequately justified regulations restricting the advertising of cigars and smokeless tobacco. The Court stated: 57 Our review of the record reveals that the Attorney General has provided ample documentation of the problem with underage use of smokeless tobacco and cigars. In addition, we disagree with petitioners' claim that there is no evidence that preventing targeted campaigns and limiting youth exposure to advertising will decrease underage use of smokeless tobacco and cigars. On this record and in the posture of summary judgment, we are unable to conclude that the Attorney General's decision to regulate advertising of smokeless tobacco and cigars in an effort to combat the use of tobacco products by minors was based on mere speculation [and] conjecture. 58 Lorillard, 121 S. Ct. at 2425 (citation omitted). 59 Despite its reference to a summary judgment proceeding, the Court clearly viewed the Central Hudson burden as having remained on the state, despite Lorillard's procedural posture. At most, the Court's opinion suggests that disputed evidence should be viewed in the favor of the nonmoving party. As a consequence, we hold that the burden remains on Utah to justify its speech restrictions. See also Bad Frog Brewery, Inc. v. New York State Liquor Authority, 134 F.3d 87, 97-102 (2d Cir. 1998) (Central Hudson analysis applied without burden shifting, despite the fact that the brewery was appealing the denial of its motion for summary judgment and for a preliminary injunction). 60 We now turn to our analysis of the third part of the Central Hudson test. In order to justify any regulation of alcohol advertising, Utah must show that its regulations directly and materially advance its substantial state interests. It has identified two legitimate interests: temperance and the operation of a public business. 61 With respect to temperance, we have carefully reviewed the evidence presented by Utah concerning the relationship between temperance and alcohol advertising. We note that while that evidence repeatedly warns of the dangers of alcohol, and suggests that these dangers may be aggravated by alcohol advertising, it makes virtually no distinction among different types of alcohol. In fact, while Utah's documents use the word alcohol dozens of times, see Aplt's App. at 140-57, they refer to only two studies regarding a particular type of alcohol. Those studies point to the adverse effects of beer advertising. See id. at 150, 152. If the words liquor or wine appear anywhere in Utah's evidence, this court is unable to find them. 62 Utah's evidence thus appears to prove only that there is a substantial state interest in tempering the consumption of all types of alcohol, not just liquor and wine. Following the analysis of Coors, this makes no rational sense if Utah's true aim is to suppress the social ills which its own evidence attributes to all types of alcohol. See Coors, 514 U.S. at 488. Like the regulations struck down by the Supreme Court in Greater New Orleans, the Utah statutes currently distinguish[] among the indistinct, permitting a variety of speech, such as beer advertising, that poses the same risks the Government purports to fear, while banning messages unlikely to cause any harm at all, such as the posting of wine lists on the outside of restaurants. See Greater New Orleans, 527 U.S. at 195. We conclude that, with respect to the state's interest in temperance, Utah's present scheme of advertising regulation must be considered irrational. It thus fails the third part of Central Hudson. 63 Utah also cannot justify its advertising restrictions through its operation of a public business in liquor sales, as Utah has presented no evidence supporting the somewhat counterintuitive argument that advertising by liquor licensees poses any threat to the operation of a public business. As the state itself declares, Utah's liquor licensees are intensely regulated. Utah states that liquor-related [s]ales and activities may only be conducted by individuals licensed by the State to engage in those activities in accordance with the alcoholic beverage distribution and marketing system; that the state is the exclusive wholesale dealer in liquor; and that it sets both the wholesale and retail prices at which liquor may be sold. See Aple's Br. at 14-15, 19; see also Utah Code Ann. 32A-5-107 (2000) (regulating business conduct of liquor licensees). As a consequence, it must be presumed that no matter how much a liquor licensee chose to advertise, it would still be forced to purchase its products from the state, and sell them in the manner prescribed by the state. 64 We reiterate that Utah has the burden to prove both that liquor advertising harms its substantial interest in operating a public business in alcohol sales, and that its laws restricting liquor advertising will reduce any such harms to a material degree. Its conclusory assertion that [ULBA] do[es] not address the interests of the State in its public business and its chosen marketing and sales provisions is insufficient to meet that burden. Aple's Br. at 22. We hold that Utah's public business rationale also fails the third part of Central Hudson. 65 Finally, we turn to Utah's alternate argument that its Twenty-first Amendment authority, and its history of differential regulations of liquor and beer, can justify its speech restrictions under the third part of Central Hudson. See Aple's Br. at 25-27. The plurality opinion of the Supreme Court in Part VI of 44 Liquormart stated that [e]ven though government is under no obligation to provide a person, or the public, a particular benefit, it does not follow that conferral of the benefit may be conditioned on the surrender of a constitutional right. 44 Liquormart, 517 U.S. at 513. And, in Part VII, a majority of the Court held that the Twenty-first Amendment does not qualify the constitutional prohibition against laws abridging the freedom of speech embodied in the First Amendment. Id. at 516. To permit Utah to abridge the commercial speech rights of its liquor licensees as a condition of their licenses would constitute just such a qualification of the First Amendment. Utah cannot therefore rely on its Twenty-first Amendment powers to salvage its advertising restrictions. 66