8th Circuit tosses Missouri rules that limit alcohol ads

If the winners of a recent federal appellate case decide their victory calls for a drink, they’ll be able to get a lot more information before they head out on the town.

The 8th U.S. Circuit Court of Appeals on Jan. 8 threw out several Missouri regulations on advertising for alcohol, agreeing with an earlier ruling in the Western District of Missouri that the rules violate the First Amendment.

At issue was Missouri’s so-called “tied-house” laws, which are intended to strictly separate producers, distributors and retailers of alcohol. A state statute limits how distillers and wholesalers can promote unaffiliated retail businesses that sell their products by prohibiting ads that contain the retail price of the product. The ads also cannot single out a particular retailer, and any business listings “shall be relatively inconspicuous.”

Related state regulations prohibit alcohol retailers from advertising discounted prices outside their establishments and bar the advertising of prices that are below the retailers’ actual cost. As a result, bars can’t inform potential patrons of a “two-for-one” special on alcohol until the patrons are inside the establishment.

A coalition of plaintiffs led by the Missouri Broadcasters Association challenged the restrictions. The district court initially dismissed the case, but two years ago the 8th Circuit reinstated it. After the plaintiffs prevailed at a bench trial, the Missouri Attorney General’s Office argued on appeal that the rules were constitutional restrictions on commercial speech under the U.S. Constitution’s 21st Amendment, which repealed Prohibition but allowed states to regulate alcohol.

Judge Jane Kelly, writing for the 8th Circuit, said the state had imposed content-based restrictions on what producers and distributors can say in their ads.

“Missouri’s authority under the Twenty-first Amendment cannot save the Statute from its First Amendment implications,” she wrote.

The court said the state failed to show how its statute helped to prevent producers and distributors from unduly influencing retailers, or how the regulations helped to decrease overconsumption of alcohol and underage drinking.

Mark Gordon, president of the Broadcasters Association, hailed the ruling.

“We believe today’s decision makes it crystal clear that Missouri broadcasters can deliver, and Missouri citizens can receive, truthful advertising about alcoholic beverage prices just as they can with other goods and services,” he said in a statement.

The attorney general’s office declined to comment.

The case is Missouri Broadcasters Association v. Schmitt, 18-2611.