Educational Media Co. v. Insley, No. 12-2183

Decided: September 25, 2013

The Fourth Circuit held that a Virginia regulation preventing the printing of alcohol advertisements violated the First Amendment as applied to college student newspapers.

The Virginia Alcoholic Beverage Control Board (the “ABC”) prohibits college student newspapers from printing alcohol advertisements (the “Ban”). The college student newspapers at the University of Virginia and Virginia Tech (collectively “College Newspapers” or “Plaintiffs”) challenged the Ban as an unconstitutional restriction of commercial speech under the First Amendment. ABC defended the Ban on the grounds that it serves the state’s objective of combating underage and abusive college drinking. Both parties moved for summary judgment. At the hearing, the parties presented conflicting expert testimony as to the effect of advertising on demand for alcohol. The ABC’s expert economist argued that advertising for alcohol on a college campus met a very targeted audience, and thus, unlike alcohol advertising in other forms, has a substantial effect on demand. The College Newspapers countered with considerable evidence that advertising for alcohol has little to no effect on overall demand and established that a majority of their readers are of legal drinking age. Ultimately, the district court granted summary judgment for ABC, finding that the Ban did not violate the First Amendment. The College Newspapers appealed.

On appeal, the Fourth Circuit began by noting that restrictions on commercial speech are less suspect than restrictions on other forms of speech, and need only survive intermediate scrutiny. The College Newspapers argued that the court should examine the Ban under strict scrutiny based on the Supreme Court’s recent decision in Sorrell v. IMS Health Inc., where the court invalidated a Vermont law that regulated pharmacy advertising. The court declined to decide whether strict scrutiny applied, however because the court found that the Ban failed under intermediate scrutiny as defined in Central Hudson. Under Central Hudson, a regulation of commercial speech will be upheld if (1) the regulated speech concerns lawful activity and is not misleading; (2) the regulation is supported by a substantial government interest; (3) the regulation directly advances that interest; and (4) the regulation is not more extensive than necessary to serve the government’s interest.

The Fourth Circuit found that the Ban violated the Central Hudson test as applied to the Plaintiffs. The court held that there was no controversy as to the first, second, and third element. First, alcohol advertising is clearly a legal activity. Second, Virginia has a substantial government interest in combatting underage and abusive drinking on college campuses. Third, the Ban advances the stated government interest given that there is a general correlation between advertising of a product and demand for that product. Moreover, if the alcohol vendors did not believe that they could affect demand by advertising, they would not seek to advertise in the College Newspapers. However, the court held that the Ban failed under the fourth element because it was more extensive than necessary to serve the government interest. The Fourth Circuit held that the Ban prohibited large numbers of adults who are of legal drinking age from receiving truthful information about a product that they are legally allowed to consume. The court cited the Supreme Court’s statement that states may not “seek to remove a popular but disfavored product from the marketplace by prohibiting truthful, non-misleading advertisements.” Therefore, the court held that the district court erred in finding that the Ban was appropriately tailored to achieve its object of reducing abusive college drinking and reversed the district court, finding that the Ban violated the First Amendment as applied to the College Newspapers.

Full Opinion

– Wesley B. Lambert

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