Can the First Amendment Save Controversial Packaging?

Janet M. EvansFederal Trade CommissionPresentation for NABCA Legal SymposiumMarch 12, 2013

Background 44 Liquor Mart: Supreme Court struck down a state ban on

alcohol price advertising, reasoning that the 21st Amendment limits the effect of the dormant commerce clause on a state’s regulatory power over the delivery and use of intoxicating beverages within its borders, but it does not license states to ignore their other obligations under provisions of the Constitution such as the First Amendment.

» 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996)

What do you mean by controversial? Offensive or indecent? Liquor authority

decision to ban product with offensive label depicting of frog “giving the finger” overturned.

Second Circuit ruled that the label constituted commercial speech, concerned lawful conduct, and was not misleading. The ban failed the Central Hudson test of “materially advancing” a state interest in protecting children from vulgarity because it made “only a minute contribution to the advancement of a state interest” given the wide currency of vulgar displays throughout contemporary society.” • Bad Frog Brewery , Inc. v. NY State Liquor

Authority, 134 F.3d 87 (2d. Cir. 1998)

What do you mean by controversial? Deceptive? Under Central Hudson,

commercial speech that is deceptive or misleading is not entitled to protection under the First Amendment.

Deception was the basis of the FTC’s action regarding Four Loko. Our complaint alleged a deceptive “single serve beverage” claim due to a combination of ad depictions, retail placement, and packaging• Phusion Projects LLC, FTC Docket C-4382

(2013)

What do you mean by controversial? Due to the size and composition of the package only, and not

due to any aspect of the label? United States v. O’Brien: Supreme Court decision upheld a law

prohibiting the destruction of a draft card, ruling that when the government interest is unrelated to the suppression of free expression, and the “speech” and “non speech” elements are combined in the same course of conduct, a sufficiently important governmental interest in regulating the non speech element can justify incidental limitations on First Amendment freedoms.

» 391 U.S. 367 (1968)

Analysis: A state regulation that prohibited introduction of alcohol

products into the state solely due to the size and composition of the package, and not because of the label, would probably survive scrutiny under the First Amendment.

But: Any new state law or regulation requires substantial resources to adopt and implement. Is this the best allocation of limited resources?

Back to Basics: Alcohol Labeling

Benefits NIAAA urges consumers to count their drinks

• http://rethinkingdrinking.niaaa.nih.gov/ Prevention authorities urge parents to talk to

their kids about underage drinking. • Alcohol Facts labels would give them concrete

information to work with.