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Rubin v. Coors Brewing Co., 514 US 476 – Supreme Court 1995 – Google Scholar

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Rubin v. Coors Brewing Co., 514 US 476 – Supreme Court 1995

514 U.S. 476 (1995)

RUBIN, SECRETARY OF THE TREASURY
v.

COORS BREWING CO.

No. 93-1631.

Argued November 30, 1994.
Decided April 19, 1995.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
TENTH CIRCUIT

United States Supreme Court.

*478 Thomas, J., delivered the opinion of the Court, in which Rehnquist, C. J., and
O’Connor, Scalia, Kennedy, Souter, Ginsburg, and Breyer, JJ., joined. Stevens, J.,
filed an opinion concurring in the judgment, post, p. 491.

478

Deputy Solicitor General Kneedler argued the cause for petitioner. With him on the
briefs were Solicitor General Days, Assistant Attorney General Hunger, Richard H.
Seamon, Michael Jay Singer, and John S. Koppel.

*478 Bruce J. Ennis, Jr., argued the cause for respondent. With him on the brief
were Donald B. Verrilli, Jr., Paul M. Smith, Nory Miller, M. Caroline Turner, and

Terrance D. Micek.[*]

478

Justice Thomas, delivered the opinion of the Court.

Section 5(e)(2) of the Federal Alcohol Administration Act prohibits beer labels from
displaying alcohol content. We granted certiorari in this case to review the Tenth
Circuit’s holding that the labeling ban violates the First Amendment because it fails
to advance a governmental interest in a direct and material way. Because § 5(e)(2)
is inconsistent with the protections granted to commercial speech by the First
Amendment, we affirm.

I

Respondent brews beer. In 1987, respondent applied to the Bureau of Alcohol,
Tobacco and Firearms (BATF), an agency of the Department of the Treasury, for
approval of proposed labels and advertisements that disclosed the alcohol content
of its beer. BATF rejected the application on the ground that the Federal Alcohol
Administration Act (FAAA or Act), 49 Stat. 977, 27 U. S. C. § 201 et seq. ,
prohibited disclosure of the alcohol content of beer on labels or in advertising.
Respondent then filed suit in the District *479 Court for the District of Colorado
seeking a declaratory judgment that the relevant provisions of the Act violated the
First Amendment; respondent also sought injunctive relief barring enforcement of
these provisions. The Government took the position that the ban was necessary to

479

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Rubin v. Coors Brewing Co., 514 US 476 – Supreme Court 1995 – Google Scholar

https://scholar.google.com/scholar_case?case=2372786291637499082&q=Rubin+++++v.+Coors,+514+U.S.+476+(1995)&hl=en&as_sdt=2006[11/3/2018 9:10:14 AM]

suppress the threat of “strength wars” among brewers, who, without the regulation,
would seek to compete in the marketplace based on the potency of their beer.

The District Court granted the relief sought, but a panel of the Court of Appeals for
the Tenth Circuit reversed and remanded. Adolph Coors Co. v. Brady, 944 F. 2d
1543 (1991). Applying the framework set out in Central Hudson Gas & Elec. Corp.
v. Public Serv. Comm’n of N. Y., 447 U. S. 557 (1980), the Court of Appeals found
that the Government’s interest in suppressing alcoholic “strength wars” was
“substantial.” Brady, supra, at 1547-1549. It further held, however, that the record
provided insufficient evidence to determine whether the FAAA’s ban on disclosure
“directly advanced” that interest. Id. , at 1549-1551. The court remanded for further
proceedings to ascertain whether a “`reasonable fit’ ” existed between the ban and
the goal of avoiding strength wars. Id., at 1554.

After further factfinding, the District Court upheld the ban on the disclosure of
alcohol content in advertising but invalidated the ban as it applied to labels.
Although the Government asked the Tenth Circuit to review the invalidation of the
labeling ban, respondent did not appeal the court’s decision sustaining the
advertising ban. On the case’s second appeal, the Court of Appeals affirmed the
District Court. Adolph Coors Co. v. Bentsen, 2 F. 3d 355 (1993). Following our
recent decision in Edenfield v. Fane, 507 U. S. 761 (1993), the Tenth Circuit asked
whether the Government had shown that the “`challenged regulation advances
[the Government’s] interests in a direct and material way.’ ” 2 F. 3d, at 357 (quoting
Edenfield, supra, at 767-768). After reviewing the record, the Court of Appeals
concluded that the Government *480 had failed to demonstrate that the prohibition
in any way prevented strength wars. The court found that there was no evidence of
any relationship between the publication of factual information regarding alcohol
content and competition on the basis of such content. 2 F. 3d, at 358-359.

480

We granted certiorari, 512 U. S. 1203 (1994), to review the Tenth Circuit’s decision
that § 205(e)(2) violates the First Amendment. We conclude that the ban infringes
respondent’s freedom of speech, and we therefore affirm.

II

A

Soon after the ratification of the Twenty-first Amendment, which repealed the
Eighteenth Amendment and ended the Nation’s experiment with Prohibition,
Congress enacted the FAAA. The statute establishes national rules governing the
distribution, production, and importation of alcohol and established a Federal
Alcohol Administration to implement these rules. Section 5(e)(2) of the Act
prohibits any producer, importer, wholesaler, or bottler of alcoholic beverages from
selling, shipping, or delivering in interstate or foreign commerce any malt
beverages, distilled spirits, or wines in bottles

“unless such products are bottled, packaged, and labeled in conformity
with such regulations, to be prescribed by the Secretary of the
Treasury, with respect to packaging, marking, branding, and labeling
and size and fill of container . . . as will provide the consumer with
adequate information as to the identity and quality of the products, the
alcoholic content thereof (except that statements of, or statements
likely to be considered as statements of, alcoholic content of malt
beverages are prohibited unless required by State law and except that,

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Rubin v. Coors Brewing Co., 514 US 476 – Supreme Court 1995 – Google Scholar

https://scholar.google.com/scholar_case?case=2372786291637499082&q=Rubin+++++v.+Coors,+514+U.S.+476+(1995)&hl=en&as_sdt=2006[11/3/2018 9:10:14 AM]

in case of wines, statements of alcoholic content shall be required only
for wines containing more than 14 per centum of alcohol by volume),
the net contents of *481 the package, and the manufacturer or bottler
or importer of the product.” 27 U. S. C. § 205(e)(2) (emphasis added).

481

The Act defines “`malt beverage[s]’ ” in such a way as to include all beers and
ales. § 211(a)(7).

Implementing regulations promulgated by BATF (under delegation of authority
from the Secretary of the Treasury) prohibit the disclosure of alcohol content on

beer labels. 27 CFR § 7.26(a) (1994).[1] In addition to prohibiting numerical
indications of alcohol content, the labeling regulations proscribe descriptive terms
that suggest high content, such as “strong,” “full strength,” “extra strength,” “high
test,” “high proof,” “pre-war strength,” and “full old time alcoholic strength.” §
7.29(f). The prohibitions do not preclude labels from identifying a beer as “low
alcohol,” “reduced alcohol,” “non-alcoholic,” or “alcohol-free.” Ibid.; see also §§
7.26(b)—(d). By statute and by regulation, the labeling ban must give way if state
law requires disclosure of alcohol content.

B

Both parties agree that the information on beer labels constitutes commercial
speech. Though we once took the position that the First Amendment does not
protect commercial speech, see Valentine v. Chrestensen, 316 U. S. 52 (1942),
we repudiated that position in Virginia Bd. of Pharmacy v. Virginia Citizens
Consumer Council, Inc., 425 U. S. 748 (1976). There we noted that the free flow of
commercial information is “indispensable to the proper allocation of resources in a
free enterprise system” because it informs the numerous private decisions that
drive the system. Id. , at 765. Indeed, we observed that a “particular consumer’s
interest in the *482 free flow of commercial information . . . may be as keen, if not
keener by far, than his interest in the day’s most urgent political debate.” Id. , at
763.

482

Still, Virginia Board of Pharmacy suggested that certain types of restrictions might
be tolerated in the commercial speech area because of the nature of such speech.
See id. , at 771-772, n. 24. In later decisions we gradually articulated a test based
on “`the “commonsense” distinction between speech proposing a commercial
transaction, which occurs in an area traditionally subject to government regulation,
and other varieties of speech.’ ” Central Hudson, 447 U. S., at 562 (quoting Ohralik
v. Ohio State Bar Assn., 436 U. S. 447, 455-456 (1978)). Central Hudson identified
several factors that courts should consider in determining whether a regulation of
commercial speech survives First Amendment scrutiny:

“For commercial speech to come within [the First Amendment], it at
least must concern lawful activity and not be misleading. Next, we ask
whether the asserted governmental interest is substantial. If both
inquiries yield positive answers, we must determine whether the
regulation directly advances the governmental interest asserted, and
whether it is not more extensive than is necessary to serve that
interest.” 447 U. S., at 566.

We now apply Central Hudson `s test to § 205(e)(2).[2]

*483 III483

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Rubin v. Coors Brewing Co., 514 US 476 – Supreme Court 1995 – Google Scholar

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Both the lower courts and the parties agree that respondent seeks to disclose only
truthful, verifiable, and nonmisleading factual information about alcohol content on
its beer labels. Thus, our analysis focuses on the substantiality of the interest
behind § 205(e)(2) and on whether the labeling ban bears an acceptable fit with
the Government’s goal. A careful consideration of these factors indicates that §
205(e)(2) violates the First Amendment’s protection of commercial speech.

A

The Government identifies two interests it considers sufficiently “substantial” to
justify § 205(e)(2)’s labeling ban. First, the Government contends that § 205(e)(2)
advances Congress’ goal of curbing “strength wars” by beer brewers who might
seek to compete for customers on the basis of alcohol content. According to the
Government, the FAAA’s restriction prevents a particular type of beer drinker—one
*484 who selects a beverage because of its high potency—from choosing beers
solely for their alcohol content. In the Government’s view, restricting disclosure of
information regarding a particular product characteristic will decrease the extent to
which consumers will select the product on the basis of that characteristic.

484

Respondent counters that Congress actually intended the FAAA to achieve the far
different purpose of preventing brewers from making inaccurate claims concerning
alcohol content. According to respondent, when Congress passed the FAAA in
1935, brewers did not have the technology to produce beer with alcohol levels
within predictable tolerances—a skill that modern beer producers now possess.
Further, respondent argues that the true policy guiding federal alcohol regulation is
not aimed at suppressing strength wars. If such were the goal, the Government
would not pursue the opposite policy with respect to wines and distilled spirits.
Although § 205(e)(2) requires BATF to promulgate regulations barring the
disclosure of alcohol content on beer labels, it also orders BATF to require the
disclosure of alcohol content on the labels of wines and spirits. See 27 CFR § 4.36
(1994) (wines); § 5.37 (distilled spirits).

Rather than suppressing the free flow of factual information in the wine and spirits
markets, the Government seeks to control competition on the basis of strength by
monitoring distillers’ promotions and marketing. Respondent quite correctly notes
that the general thrust of federal alcohol policy appears to favor greater disclosure
of information, rather than less. This also seems to be the trend in federal
regulation of other consumer products as well. See, e. g., Nutrition Labeling and
Education Act of 1990, Pub. L. 101-535, 104 Stat. 2353, as amended (requiring
labels of food products sold in the United States to display nutritional information).

Respondent offers a plausible reading of the purpose behind § 205(e)(2), but the
prevention of misleading statements of alcohol content need not be the exclusive
Government interest *485 served by § 205(e)(2). In Posadas de Puerto Rico
Associates v. Tourism Co. of P. R., 478 U. S. 328, 341 (1986), we found that the
Puerto Rico Legislature’s interest in promoting the health, safety, and welfare of its
citizens by reducing their demand for gambling provided a sufficiently “substantial”
governmental interest to justify the regulation of gambling advertising. So too the
Government here has a significant interest in protecting the health, safety, and
welfare of its citizens by preventing brewers from competing on the basis of
alcohol strength, which could lead to greater alcoholism and its attendant social
costs. Both panels of the Court of Appeals that heard this case concluded that the
goal of suppressing strength wars constituted a substantial interest, and we cannot

485

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say that their conclusion is erroneous. We have no reason to think that strength
wars, if they were to occur, would not produce the type of social harm that the
Government hopes to prevent.

The Government attempts to bolster its position by arguing that the labeling ban
not only curbs strength wars, but also “facilitates” state efforts to regulate alcohol
under the Twenty-first Amendment. The Solicitor General directs us to United
States v. Edge Broadcasting Co., 509 U. S. 418 (1993), in which we upheld a
federal law that prohibited lottery advertising by radio stations located in States
that did not operate lotteries. That case involved a station located in North Carolina
(a nonlottery State) that broadcast lottery advertisements primarily into Virginia (a
State with a lottery). We upheld the statute against First Amendment challenge in
part because it supported North Carolina’s antigambling policy without unduly
interfering with States that sponsored lotteries. Id. , at 431-435. In this case, the
Government claims that the interest behind § 205(e)(2) mirrors that of the statute
in Edge Broadcasting because it prohibits disclosure of alcohol content only in
States that do not affirmatively require brewers to provide that information. In the
Government’s view, this saves States that might wish to *486 ban such labels the
trouble of enacting their own legislation, and it discourages beer drinkers from
crossing state lines to buy beer they believe is stronger.

486

We conclude that the Government’s interest in preserving state authority is not
sufficiently substantial to meet the requirements of Central Hudson. Even if the
Federal Government possessed the broad authority to facilitate state powers, in
this case the Government has offered nothing that suggests that States are in
need of federal assistance. States clearly possess ample authority to ban the
disclosure of alcohol content—subject, of course, to the same First Amendment
restrictions that apply to the Federal Government. Unlike the situation in Edge
Broadcasting, the policies of some States do not prevent neighboring States from
pursuing their own alcohol-related policies within their respective borders. One
State’s decision to permit brewers to disclose alcohol content on beer labels will
not preclude neighboring States from effectively banning such disclosure of that
information within their borders.

B

The remaining Central Hudson factors require that a valid restriction on
commercial speech directly advance the governmental interest and be no more
extensive than necessary to serve that interest. We have said that “[t]he last two
steps of the Central Hudson analysis basically involve a consideration of the `fit’
between the legislature’s ends and the means chosen to accomplish those ends.”
Posadas, supra, at 341. The Tenth Circuit found that § 205(e)(2) failed to advance
the interest in suppressing strength wars sufficiently to justify the ban. We agree.

Just two Terms ago, in Edenfield v. Fane, 507 U. S. 761 (1993), we had occasion
to explain the Central Hudson factor concerning whether the regulation of
commercial speech “directly advances the governmental interest asserted.”
Central Hudson, 447 U. S., at 566. In Edenfield, we decided *487 that the
Government carries the burden of showing that the challenged regulation
advances the Government’s interest “in a direct and material way.” 507 U. S., at
767. That burden “is not satisfied by mere speculation or conjecture; rather, a
governmental body seeking to sustain a restriction on commercial speech must
demonstrate that the harms it recites are real and that its restriction will in fact
alleviate them to a material degree.” Id. , at 770-771. We cautioned that this

487

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https://scholar.google.com/scholar_case?case=11752815694690736764&q=Rubin+++++v.+Coors,+514+U.S.+476+(1995)&hl=en&as_sdt=2006

Rubin v. Coors Brewing Co., 514 US 476 – Supreme Court 1995 – Google Scholar

https://scholar.google.com/scholar_case?case=2372786291637499082&q=Rubin+++++v.+Coors,+514+U.S.+476+(1995)&hl=en&as_sdt=2006[11/3/2018 9:10:14 AM]

requirement was critical; otherwise, “a State could with ease restrict commercial
speech in the service of other objectives that could not themselves justify a burden
on commercial expression.” Id., at 771.

The Government attempts to meet its burden by pointing to current developments
in the consumer market. It claims that beer producers are already competing and
advertising on the basis of alcohol strength in the “malt liquor” segment of the beer

market.[3] The Government attempts to show that this competition threatens to
spread to the rest of the market by directing our attention to respondent’s motives
in bringing this litigation. Respondent allegedly suffers from consumer
misperceptions that its beers contain less alcohol than other brands. According to
the Government, once respondent gains relief from § 205(e)(2), it will use its labels
to overcome this handicap.

Under the Government’s theory, § 205(e)(2) suppresses the threat of such
competition by preventing consumers from choosing beers on the basis of alcohol
content. It is assuredly a matter of “common sense,” Brief for Petitioner 27, that a
restriction on the advertising of a product characteristic will decrease the extent to
which consumers select a product on the basis of that trait. In addition to common
sense, the Government urges us to turn to history as a guide. According *488 to
the Government, at the time Congress enacted the FAAA, the use of labels
displaying alcohol content had helped produce a strength war. Section 205(e)(2)
allegedly relieved competitive pressures to market beer on the basis of alcohol
content, resulting over the long term in beers with lower alcohol levels.

488

We conclude that § 205(e)(2) cannot directly and materially advance its asserted
interest because of the overall irrationality of the Government’s regulatory scheme.
While the laws governing labeling prohibit the disclosure of alcohol content unless
required by state law, federal regulations apply a contrary policy to beer
advertising. 27 U. S. C. § 205(f)(2); 27 CFR § 7.50 (1994). Like § 205(e)(2), these
restrictions prohibit statements of alcohol content in advertising, but, unlike §
205(e)(2), they apply only in States that affirmatively prohibit such advertisements.
As only 18 States at best prohibit disclosure of content in advertisements, App. to
Brief for Respondent 1a—12a, brewers remain free to disclose alcohol content in
advertisements, but not on labels, in much of the country. The …

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