514 U.S. 476 (1995), 93-1631, Rubin v. Coors Brewing Co.

Docket Nº:No. 93-1631
Citation:514 U.S. 476, 115 S.Ct. 1585, 131 L.Ed.2d 532, 63 U.S.L.W. 4319
Party Name:RUBIN, SECRETARY OF THE TREASURY v. COORS BREWING CO.
Case Date:April 19, 1995
Court:United States Supreme Court

Page 476

514 U.S. 476 (1995)

115 S.Ct. 1585, 131 L.Ed.2d 532, 63 U.S.L.W. 4319

RUBIN, SECRETARY OF THE TREASURY

v.

COORS BREWING CO.

No. 93-1631

United States Supreme Court

April 19, 1995

Argued November 30, 1994

CERTIORARI TO THE UNITED STATE COURT OF APPEALS FOR THE TENTH CIRCUIT

Syllabus

Because § 5(e)(2) of the Federal Alcohol Administration Act (FAAA or Act), 27 U.S.C. § 205(e)(2), prohibits beer labels from displaying alcohol content, the federal Bureau of Alcohol, Tobacco and Firearms (BATF) rejected respondent brewer's application for approval of proposed labels that disclosed such content. Respondent filed suit for relief on the ground that the relevant provisions of the Act violated the First Amendment's protection of commercial speech. The Government argued that the labeling ban was necessary to suppress the threat of "strength wars" among brewers, who, without the regulation, would seek to compete in the marketplace based on the potency of their beer. The District Court invalidated the labeling ban, and the Court of Appeals affirmed. Although the latter court found that the Government's interest in suppressing "strength wars" was "substantial" under the test set out in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N. Y., 447 U.S. 557, the court held that the ban violates the First Amendment because it fails to advance that interest in a direct and material way.

Held:

Section 5(e)(2) violates the First Amendment's protection of commercial speech. Pp. 480-491.

(a) In scrutinizing a regulation of commercial speech that concerns lawful activity and is not misleading, a court must consider whether the governmental interest asserted to support the regulation is "substantial." If that is the case, the court must also determine whether the regulation directly advances the asserted interest and is no more extensive than is necessary to serve that interest. Central Hudson, supra, at 566. Here, respondent seeks to disclose only truthful, verifiable, and nonmisleading factual information concerning alcohol content. Pp. 480-482.

(b) The interest in curbing "strength wars" is sufficiently "substantial" to satisfy Central Hudson. The Government has a significant interest in protecting the health, safety, and welfare of its citizens by preventing brewers from competing on the basis of alcohol strength, which could lead to greater alcoholism and its attendant social costs. Cf. Posadas de Puerto Rico Associates v. Tourism Co. of P. R., 478 U.S. 328, 341. There is no reason to think that strength wars, if they were

Page 477

to occur, would not produce the type of social harm that the Government hopes to prevent. However, the additional asserted interest in "facilitat[ing]" state efforts to regulate alcohol under the Twenty-first Amendment is not sufficiently substantial to meet Central Hudson's requirement. Even if the Government possessed the authority to facilitate state powers, the Government has offered nothing to suggest that States are in need of federal assistance in this regard. United States v. Edge Broadcasting Co., 509 U.S. 418, 431-435, distinguished. Pp. 483-486.

(c) Section 205(e)(2) fails Central Hudson's requirement that the measure directly advance the asserted Government interest. The labeling ban cannot be said to advance the governmental interest in suppressing strength wars because other provisions of the FAAA and implementing regulations prevent § 205(e)(2) from furthering that interest in a direct and material fashion. Although beer advertising would seem to constitute a more influential weapon in any strength war than labels, the BATF regulations governing such advertising prohibit statements of alcohol content only in States that affirmatively ban such advertisements. Government regulations also permit the identification of certain beers with high alcohol content as "malt liquors," and they require disclosure of content on the labels of wines and spirits. There is little chance that § 205(e)(2) can directly and materially advance its aim, while other provisions of the same Act directly undermine and counteract its effects. Pp. 486-490.

(d) Section 205(e)(2) is more extensive than necessary, since available alternatives to the labeling ban—including directly limiting the alcohol content of beers, prohibiting marketing efforts emphasizing high alcohol strength, and limiting the ban to malt liquors, the segment of the beer market that allegedly is threatened with a strength war—would prove less intrusive to the First Amendment's protections for commercial speech. Pp. 490-491.

2 F.3d 355, affirmed.

Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O'Connor, Scalia, Kennedy, Souter, Ginsburg, and Breyer, JJ., joined. Stevens, J., filed an opinion concurring in the judgment, post, p. 491.

Deputy Solicitor General Kneedler argued the cause for petitioner. With him on the briefs were Solicitor General Days, Assistant Attorney General Hunger, Richard H. Seamon, Michael Jay Singer, and John S. Koppel.

Page 478

Bruce J. Ennis, Jr., argued the cause for respondent. With him on the brief were Donald B. Verrilli, Jr., PaulM. Smith, Nory Miller, M. Caroline Turner, and Terrance D. Micek . [*]

Justice Thomas delivered the opinion of the Court.

Section 5(e)(2) of the Federal Alcohol Administration Act prohibits beer labels from displaying alcohol content. We granted certiorari in this case to review the Tenth Circuit's holding that the labeling ban violates the First Amendment because it fails to advance a governmental interest in a direct and material way. Because § 5(e)(2) is inconsistent with the protections granted to commercial speech by the First Amendment, we affirm.

I

Respondent brews beer. In 1987, respondent applied to the Bureau of Alcohol, Tobacco and Firearms (BATF), an agency of the Department of the Treasury, for approval of proposed labels and advertisements that disclosed the alcohol content of its beer. BATF rejected the application on the ground that the Federal Alcohol Administration Act (FAAA or Act), 49 Stat. 977, 27 U.S.C. § 201 et seq., prohibited disclosure of the alcohol content of beer on labels or in advertising. Respondent then filed suit in the District

Page 479

Court for the District of Colorado seeking a declaratory judgment that the relevant provisions of the Act violated the First Amendment; respondent also sought injunctive relief barring enforcement of these provisions. The Government took the position that the ban was necessary to suppress the threat of "strength wars" among brewers, who, without the regulation, would seek to compete in the marketplace based on the potency of their beer.

The District Court granted the relief sought, but a panel of the Court of Appeals for the Tenth Circuit reversed and remanded. Adolph Coors Co. v. Brady, 944 F.2d 1543(1991). Applying the framework set out in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N. Y., 447 U.S. 557 (1980), the Court of Appeals found that the Government's interest in suppressing alcoholic "strength wars" was "substantial." Brady, supra, at 1547-1549. It further held, however, that the record provided insufficient evidence to determine whether the FAAA's ban on disclosure "directly advanced" that interest. Id., at 1549-1551. The court remanded for further proceedings to ascertain whether a " 'reasonable fit' " existed between the ban and the goal of avoiding strength wars. Id., at 1554.

After further factfinding, the District Court upheld the ban on the disclosure of alcohol content in advertising but invalidated the ban as it applied to labels. Although the Government asked the Tenth Circuit to review the invalidation of the labeling ban, respondent did not appeal the court's decision sustaining the advertising ban. On the case's second appeal, the Court of Appeals affirmed the District Court. Adolph Coors Co. v. Bentsen, 2 F.3d 355 (1993). Following our recent decision in Edenfield v. Fane, 507 U.S. 761 (1993), the Tenth Circuit asked whether the Government had shown that the " 'challenged regulation advances [the Government's] interests in a direct and material way.' " 2 F.3d, at 357 (quoting Edenfield, supra, at 767-768). After reviewing the record, the Court of Appeals concluded that the Government

Page 480

had failed to demonstrate that the prohibition in any way prevented strength wars. The court found that there was no evidence of any relationship between the publication of factual information regarding alcohol content and competition on the basis of such content. 2 F. 3d, at 358-359.

We granted certiorari, 512 U.S. 1203 (1994), to review the Tenth Circuit's decision that § 205(e)(2) violates the First Amendment. We conclude that the ban infringes respondent's freedom of speech, and we therefore affirm.

II

A

Soon after the ratification of the Twenty-first Amendment, which repealed the Eighteenth Amendment and ended the Nation's experiment with Prohibition, Congress enacted the FAAA. The statute establishes national rules governing the distribution, production, and importation of alcohol and established a Federal Alcohol Administration to implement these rules. Section 5(e)(2) of the Act prohibits any producer, importer, wholesaler, or bottler of alcoholic beverages from selling, shipping, or delivering in interstate or foreign commerce any malt beverages, distilled spirits, or wines in bottles

"unless such products are bottled, packaged, and labeled in conformity with such regulations, to be prescribed by the Secretary of the Treasury, with respect to packaging, marking, branding, and labeling and size and fill of container . . . as will provide the consumer with adequate information as to the identity and quality of the products, the alcoholic content thereof (except that statements of, or statements likely to be considered as statements of, alcoholic...

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