SCOTUS’s IMS Health Ruling Should Change 4th Circuit’s Mind on Alcohol Ad Ban

4th Circuit

Cross-posted at WLF’s Forbes.com Contributor Page

Virginia’s controversial ban against alcohol advertisements in college newspapers is back before the U.S. Court of Appeals for the Fourth Circuit (Educational Media Co. at Va. Tech, Inc. v. Insley).  Back in 2010, that court reversed a district court’s order overturning the ban for failing the third prong of Central Hudson—the “directly and materially advances” prong.  In the view of the Fourth Circuit, the mere “common sense” connection between advertising and demand was sufficient for Virginia to ban alcohol advertising in college newspapers to further its interest in combating underage drinking.

That ruling involved only a facial challenge.  The next phase of litigation involves an as-applied challenge and a claim that Virginia’s ban discriminates against a narrow segment of the media (both unsuccessful below), which are back before the appeals court.  But as WLF argues in its amicus brief to the 4th Circuit, a lot has changed for commercial speech jurisprudence since 2010—most notably, the Supreme Court’s decision in Sorrell v. IMS Health Inc.

In Sorrell, the Supreme Court overturned a Vermont law that prohibited the dissemination of certain prescriber-identifying information for pharmaceutical marketing purposes.  In overturning that law, Sorrell made clear that where a law restricts truthful, non-misleading commercial speech on the basis of its content and the identity of its speaker, that law must be subjected to “heightened judicial scrutiny.”  Sorrell also made clear that content- and speaker-based restrictions on commercial speech will fail such heightened scrutiny in the ordinary case.

Virginia’s alcohol advertising ban implicates the same kind of content and speaker-based burdens struck down in Sorrell.  To begin with, Virginia’s ban on alcohol advertising applies differently to alcohol manufacturers than it does to dining establishments.  While alcohol manufacturers and wholesalers are not permitted to advertise alcoholic beverages whatsoever in “college student publications,” dining establishments are perfectly free to do so.  Thus, as in Sorrell, the explicit structure of Virginia’s alcohol advertising ban is aimed at a “narrow class” of disfavored speakers.  Moreover, every other newspaper in Virginia except for college student publications may freely advertise alcoholic beverages.  And because it applies only to advertisements for alcohol, it “disfavors” “speech with a particular content.”  Even worse, it is “aimed at a particular viewpoint”—the promotion of brand name alcohol products.  Yet Virginia freely permits speech even in student newspapers (by manufacturers, wholesalers, dining establishments, or anyone else) to discourage this point of view.

As in Sorrell, the “neutral” justifications that Virginia has proffered for these content and speaker-based restrictions cannot avoid “heightened judicial scrutiny.”  Here, for example, the Government does not justify its commercial-speech ban with “typical” fraud concerns.  As the district court found, Virginia “has not presented any evidence that the commercial speech would be misleading or that the regulation [is] sought to prevent misleading information.  The record contains no evidence that any business which approached the newspapers sought to place misleading alcohol advertisements.”  Rather, Virginia justifies the discrimination out of a concern for underage and abusive drinking by college students.  But this it cannot do, for Sorrell establishes that Virginia may not “burden the speech of [alcohol manufacturers] in order to tilt public debate in a preferred direction” against the lawful sale or consumption of alcohol.  Here, as in Sorrell, the Government “seeks to achieve its policy objectives through the indirect means of restraining certain speech” rather than the more direct means of banning the sale or consumption of alcohol.

The Vermont law invalidated in Sorrell merely prohibited pharmaceutical companies from accessing information that other entities possessed as a result of government regulation.  But here, Virginia’s alcohol advertising ban prohibits alcohol manufacturing companies from conveying information that they themselves already possess—namely, the brand names and prices of their own products.  Since manufacturers have superior access to information about their own products, the advertising ban represents an onerous burden on the free flow of commercial speech.

Perhaps even more importantly, the Vermont ban on the use of physician prescription records in all marketing did not dictate the message that companies could convey or discriminate on viewpoint; it only made the marketing “more difficult and less effective.”  In contrast, Virginia engages in actual viewpoint discrimination, approving some alcohol advertising messages (those advanced by dining establishments) while proscribing others (those advanced on behalf of manufacturers, wholesalers, etc.).  As a result, Virginia’s alcohol advertising ban impinges even more on First Amendment rights than the Vermont law struck down in Sorrell.  If the latter could not withstand a First Amendment challenge, then neither can Virginia’s ban.

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