2. Background
In 1956, the Rhode Island Legislature passed two
regulations.
1. Prohibit liquormart in Rhode Island (both in and
out-of-state manufacturers, wholesalers, and
shippers) from advertising prices of any alcoholic
beverages.
2. Prohibit news media in Rhode Island from making
reference to prices of any alcoholic beverages.
In 1985, a liquormart sued the liquor commissioner to
“prevent the liquormart from unconstitutionally
advertising its price.” However, the Rhode Island
Supreme Court held the suit for “not violating the First
Amendment, the Commerce Clause, the Equal
Protection Clause or the Sherman Anti-Trust Act.
3. Background
In the same year, the Rhode Island Liquor Stores
Association sued The Call (a local Rhode Island
newspaper) for advertising prices of alcoholic
beverage outside the state. In this case, the
Rhode Island Supreme Court held to prevent “the
newspaper from advertising out-of-state alcohol
beverage prices.”
In 44 Liquormart Inc. v. Rhode Island, there were
2 petitioners in this case: 44 Liquormart Inc.
(which owned liquor stores in Rhode Island) and
Peoples Super Liquor Stores, Inc. (which
operated liquor stores in Massachusetts).
4. Background
44 Liquormart brought the suit because it attempted to run an
advertisement but the Supreme Court of the United States described it
as: “The advertisement did not state the price of any alcoholic
beverages. Indeed, it noted that “State law prohibits advertising liquor
prices.” The ad did, however, state the low prices at which
peanuts, potato chips, and Schweppes mixers were being
offered, identify various brands of packaged liquor, and include the word
“WOW” in large letters next to pictures of vodka and rum bottles.” —
Justice Stevens, 44 Liquormart, 517 U.S. at 492
After this, Rhode Island Liquor Control Administrator fined 44 Liquormart
$400.00 for implying low prices in its advertisement. Then, the 44
liquormart and the Peoples Super Liquor Stores brought the suit for
unconstitutionality. The District Court agreed with 2 petitioners that 2
banning regulations about alcoholic beverage advertisements were
unconstitutional for 2 reasons:
1. The laws didn’t reduce alcohol consumption directly.
2. Law’s reach was unnecessarily extensive.
The First Circuit Court of Appeals reversed the lower court because they
believed that an increase in alcohol sales could caused by an increase
in alcohol advertisements.
5. Issue
Is Rhode Island’s law on alcohol-price advertising
constitutional? Can a state constitutionally
prohibit the advertising of alcohol prices?
6. Decision
SCOTUS unanimously decided that a complete
ban on the advertising of alcohol prices was
unconstitutional to the 1st amendment.
Rhode Island did not meet the “heavy burden” on
its complete ban of alcohol-price advertising.
21st amendment repealed Prohibition and gave
the States the power to prohibit commerce in, or
the use of, alcoholic beverages. But the
amendment does not license the States to ignore
their other constitutional considerations.
7. Outcome
The ban on broad commercial speech such as
alcohol pricing is unconstitutional. The state is
warranted to prohibit commerce in, or the use of,
alcoholic beverages by the 21st amendment but
this type of ban is unconstitutional.
The First Amendment allowed for greater
regulation of commercial advertising than non-
commercial advertising.
