Bad Frog Brewery v. New York State Liquor Auth.
| Citation | 973 F.Supp. 280 |
| Decision Date | 28 July 1997 |
| Docket Number | No. 96-CV-1668 (FJS).,96-CV-1668 (FJS). |
| Parties | BAD FROG BREWERY, INC., Plaintiff, v. NEW YORK STATE LIQUOR AUTHORITY, Anthony J. Casale, Lawrence J. Gedda, Edward F. Kelly, Individually and as Members of the New York State Liquor Authority, Defendants. |
| Court | United States District Courts. 2nd Circuit. United States District Court of Northern District of New York |
Duker, Barrett, Gravante & Markel L.L.P. (George Carpinello, of counsel), Albany, NY, for Plaintiff.
Dennis C. Vacco, Office of the Attorney General, State of New York (David B. Roberts, Ass't Attorney General, of counsel), Albany, NY, for Defendant.
Presently before the Court are cross-motions for summary judgment by the Plaintiff Bad Frog Brewery and Defendants New York State Liquor Authority ("NYSLA"), Anthony J. Casale, Lawrence J. Gedda, and Edward F. Kelly, brought pursuant to Rule 56 of the Federal Rules of Civil Procedure. In the underlying action, Plaintiff alleges five causes of action against the Defendants arising out of the Defendants' denial of Plaintiff's beer label application. Plaintiff claims that: (1) the denial of the Plaintiff's beer label application violates the First Amendment of the United States Constitution, (2) the regulation relied on by the Defendants to deny the application, 9 N.Y.C.R.R. § 83.3, is unconstitutionally vague, in violation of the First Amendment, (3) the denial of the Plaintiff's beer label application violates the New York State Constitution, art. 1, § 8, (4) 9 N.Y.C.R.R. § 83.3 is unconstitutionally vague in violation of the N.Y. State Constitution, art. 1, § 8, and (5) the denial of Bad Frog's label application was arbitrary, capricious, affected by errors of law, and exceeded NYSLA's jurisdiction under § 107-a of the New York Alcoholic Beverage Control ("ABC") Law, as well as the NYSLA's own regulations.
The Plaintiff, Bad Frog Brewery, manufactures and markets several different types of alcoholic beverages under its "Bad Frog" label. The label on the Plaintiff's products contains a caricature of a frog with its four fingered "hand" shown with the second digit extended, depicting what is commonly called "giving the finger," or "flipping the bird." The label also contains such slogans as "He Just Don't Care," "Amphibian With An Attitude," "The Beer So Good ... It's Bad," "Big Bad 40 oz.," and "Turning Bad Into Good."
Bad Frog's labels are approved by the Federal Bureau of Alcohol, Tobacco, and Firearms. Under New York's Alcoholic Beverage Control ("ABC") Law, any alcoholic product to be marketed in New York must have its brand or trade name label approved by the NYSLA. The Plaintiff twice sought approval from the NYSLA of its label. After being denied on the first attempt, the plaintiff altered the proposed label, replacing the phrase, "He's Mean, Green, and Obscene," with "Turning Bad to Good." The new label was also rejected by the NYSLA. The general reason stated by the Defendants for their denial was that they disapproved of the general content and message of the slogans taken together with the frog illustration. Defendants relied on a NYSLA regulation prohibiting "signs" which are "obscene or indecent," or those which are "obnoxious or offensive to the commonly and generally accepted standard of fitness and good taste. ...."1 N.Y. Comp.Codes R. & Regs. tit. 9, § 83.3(2)(iii)(1996).
Plaintiff initially sought injunctive relief, enjoining the Defendants from taking steps to prohibit the sale or marketing of Bad Frog beer pending the ultimate resolution of this action. On December 5, 1996, this Court denied Plaintiff's motion, finding that the Plaintiff had not met its burden of showing that it was clearly entitled to the relief it requested.2 Bad Frog Brewery, Inc. v. New York State Liquor Auth., 96-CV-1668, 1996 WL 705786, at *4-5 (N.D.N.Y. Dec. 5, 1996). As a preliminary matter, the Court found that the speech at issue is "commercial" in nature, and that the appropriate standard for reviewing government regulation of commercial speech is the four-part test set forth in Central Hudson Gas & Electric Corp. v. Public Service Comm'n., 447 U.S. 557, 563-65, 100 S.Ct. 2343, 2349, 65 L.Ed.2d 341 (1980).3 Id. at *3. Further, the Court found that the first prong of the Central Hudson test had been met, that is, the speech in question concerns a lawful activity and is not misleading. Id. For purposes of this decision, these holdings remain viable.
After our previous interlocutory order, the Plaintiff filed a notice of appeal and sought leave of the Second Circuit to expedite the appeal. Upon stipulation of the parties, the Plaintiff withdrew its notice of appeal, and the parties submitted the cross-motions for summary judgment that are presently before the Court.
Under Rule 56(c), summary judgment is warranted if, when viewing the evidence in a light most favorable to the non-movant, the court determines that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 457, 112 S.Ct. 2072, 2077, 119 L.Ed.2d 265 (1992); Commander Oil v. Advance Food Serv. Equip., 991 F.2d 49, 51 (2d Cir.1993). Where, as here, cross motions for summary judgment are before the Court, neither side is barred from asserting that there are issues of fact sufficient to prevent the entry of judgment as a matter of law, against it. When faced with cross-motions for summary judgment, a district court is not required to grant judgment as a matter of law for one side or the other. "Rather the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration." Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir.1993) (quoting Schwabenbauer v. Board of Educ., 667 F.2d 305 (2d Cir. 1981)). Both parties seek summary judgment on the Plaintiff's federal constitutional claims before the Court. In addition, the Plaintiff seeks summary judgment on several of its alleged pendant state claims. Plaintiff's primary claim and first cause of action alleges that the Defendants' regulation of the Plaintiff's label violates the First Amendment. Plaintiff's secondary claim is that NYSLA regulation, 9 N.Y.C.R.R. § 83.3, is unconstitutionally vague. The Court will first address the Plaintiff's primary constitutional claim, and then address the Plaintiff's vagueness challenge and the remaining state claims.
In view of this Court's previous ruling4, we need now focus on whether the Government has met their summary judgment burden with respect to the remaining prongs of the Central Hudson test. The second, third and fourth prongs of the Central Hudson test require: (2) that the government assert a "substantial" government interest in support of its regulation, (3) that the government demonstrate that the restriction on commercial speech directly and materially advances that interest, and (4) that the regulation is narrowly drawn. Florida Bar v. Went for It, Inc., 515 U.S. 618, 624-625, 115 S.Ct. 2371, 2376, 132 L.Ed.2d 541 (1995) (citing Central Hudson, 447 U.S. 557, 563-65, 100 S.Ct. 2343, 2350, 65 L.Ed.2d 341 (1980)).
The Defendants advance two interests which they argue are substantial. First, the Defendants argue that New York State has a substantial interest in protecting minors from profane advertising. Second, the State asserts that New York State has a substantial government interest in promoting temperance and respect for the law.
As a preliminary matter, the Plaintiff argues that the Court should not consider the asserted governmental interest of protecting children from profane advertising because it is not expressly stated in the legislative purpose of the New York Alcoholic Beverage Control Law ("ABC Law"), which is the statutory basis for the NYSLA's authority to regulate beer labels. Defendants counter that the Central Hudson analysis does not require the asserted governmental interest to be specifically set forth in the legislative purpose of the underlying regulatory scheme.
The Supreme Court case Rubin v. Coors Brewing Co. is instructive on this issue. In that case Rubin, a beer brewer challenged the federal government's prohibition on displaying the alcoholic content of a type of beer on its label. Rubin, 514 U.S. 476, 115 S.Ct. 1585, 131 L.Ed.2d 532 (1995). The Supreme Court found, in relevant part, that the government's asserted interest in preventing "strength wars" between competing beer brewers was substantial, even though it found merit in the brewer's contention that this interest was not contemplated by Congress at the time it passed the Federal Alcohol Administrative Act in 1935. Id. at 484-85, 115 S.Ct. at 1591. The Court reasoned that the explicit purpose of a statute or regulation need not be the only government interest served by the enforcement of that regulation. Id. The Court further found that the government's asserted interest could be linked to the ever present government interest of protecting the health, safety and welfare of its citizens. Id. Thus, for purposes of a Central Hudson analysis, this Court need not confine itself to only what is explicitly set forth as the legislative purpose of New York ABC Law in determining the validity of the Government interest asserted.
Further, as we intimated in our previous decision, the Court finds that the Government does have a substantial interest in protecting minors from profane advertising. In our previous decision we stated:
[T]he use of the "frog" on the plaintiff's beer label is obviously a promotional gimmick. As such, it is reasonable to believe that the "frog" would be a major part of any advertising...
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Bad Frog Brewery, Inc. v. New York State Liquor Authority
...then filed cross motions for summary judgment, and the District Court granted NYSLA's motion. See Bad Frog Brewery, Inc. v. New York State Liquor Authority, 973 F.Supp. 280 (N.D.N.Y.1997). The Court reiterated the views expressed in denying a preliminary injunction that the labels were comm......