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Fourth Circuit Holds that Alcoholic Beverage Control Board (ABC) Regulation Cannot Prohibit Advertising in All College Newspapers

Last week the United States Court of Appeals for the Fourth Circuit (based in Richmond, VA) handed down the attached decision in Educational Media v. Insley, No. 12-2183 (Sept. 25, 2013).   The case underlines the trend to provide commercial speech, even speech about heavily-regulated products like alcohol beverages, with strong protection under the Constitution’s First Amendment.

Educational Media arose when two college student newspapers affiliated with Virginia Tech and the University of Virginia challenged a Virginia Alcoholic Beverage Control Board (ABC) regulation prohibiting the publication of alcohol advertisements in college newspapers.  In 2010, the Fourth Circuit ruled that the Virginia ABC regulations were not unconstitutional on their face.  After a remand to the District Court, which upheld the regulation, the Fourth Circuit’s recent decision struck down the regulation as applied to the newspapers in question.

The Fourth Circuit applied the well-established four-part test for commercial speech first articulated inCentral Hudson v. Public Service Commission of New York (Supr. Ct. 1980).  The parties conceded that the speech (the advertisements) at issue was truthful and not misleading, and that Virginia had a substantial state interest in combatting underage and abusive drinking – satisfying the first and second prongs of the Central Hudson analysis.

The Court next examined whether the college newspaper advertising ban directly advanced the state’s interest.  Relying on their earlier (2010) decision examining the ABC regulation on its face, the Fourth Circuit concluded that the advertising ban directly and materially advanced the state’s interest in combatting underage and abusive drinking.

The challenged regulation, however, fell to Central Hudson’s fourth prong – whether or not the regulation was more extensive than necessary (i.e., overbroad).  Rejecting the ABC’s argument that its regulation was reasonably tailored, the Court concluded that the ban was overbroad because it prevented many adults of legal drinking age from receiving truthful information about a product they could legally consume.  Critical to this conclusion was evidence that the majority of both college newspapers’ readership were 21 years of age or older.  Significantly, the court emphatically rejected the state’s fallback argument that the regulations also helped prevent abuse drinking by persons of legal drinking age.  Quoting Supreme Court precedent, the Fourth Circuit explained, “’the First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good.’”

Based on the Central Hudson analysis, the Court held that the Virginia ABC regulation was overbroad as applied to the Virginia Tech and University of Virginia student newspapers.  In doing so, the Fourth Circuit aligned itself with the Third Circuit, which decided a very similar case in 2004.

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Marc E. Sorini Alcohol Distribution Attorney McDermott Will law firm
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Marc E. Sorini is a partner in the law firm of McDermott Will & Emery LLP and is based in the Washington, D.C. office.  He heads the Firm’s Alcohol Regulatory & Distribution Group, where he focuses on regulatory and litigation issues facing the alcohol beverage industry and non-beverage alcohol users.

Marc's alcohol beverage practice covers licensing, labeling, advertising, trade practices, distribution, import-export, formulation and excise taxation.  He has represented alcohol beverage suppliers before federal and state courts, the Alcohol &...

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