Missouri Defends Law Banning Ads for Discount Alcohol

ST. LOUIS (CN) – The state of Missouri argued Thursday before the Eighth Circuit that it has a public interest in preserving a law barring the advertising of alcohol at discounted rates because such ads could encourage underage drinking.

At issue is a law banning bars and restaurants from advertising alcohol sales at below cost through specials or coupons.

In 2013, the Missouri Broadcasters Association, Zimmer Radio of Mid-Mo Inc., Meyer Farms Inc. and Uncle D’s Sports Bar & Grill sued the state in federal court, claiming the law violated their free speech rights.

The law allowed bars and restaurants to generically advertise that it had a happy hour, but banned establishments from going into detail about what types of specials are offered, such as dollar shots or penny pitchers.

In June 2018, U.S. District Judge Douglas Harpool found in favor of plaintiffs and issued a permanent ban on the state enforcing the law. Harpool found that the state did not provide enough evidence that offering discounts on booze causes people to drink more or encourages minors to drink.

Harpool’s ruling prompted Missouri’s appeal to the St. Louis-based federal appeals court.

Christopher Wray, arguing for the state, told the three-judge Eighth Circuit panel that nearly every state has a similar law designed to prohibit improper relationships between alcohol distributors and retailers. Without it, he argued that distributors could pressure retailers to oversell alcohol, leading to underage drinking and other negative consequences.

U.S. Circuit Judge David R. Stras focused on a portion of the law that required alcohol advertisers to list at least two retailers in their ads. Stras asked Wray how that couldn’t be considered government-compelled speech.

“I don’t think it is compelled speech,” Wray answered. “It is compelled disclosure.”

Wray continued by arguing that there is nothing compelling an entity to advertise for alcohol sales.

“They are free to advertise,” he said. “They just can’t advertise with one retailer.”

Senior U.S. Circuit Judge Michael J. Melloy followed by asking how having two retailers in the ads addressed the state’s interest in reducing social harms.

Wray answered that having multiple retailers in the ads reduces the effectiveness. He said if there are two retailers the ad is half as effective, if there were three then it would have one-third of the effect.

Wray concluded his argument by saying the advertising of discounted alcohol increases alcohol consumption.

“The state goal here is to reduce the consumption of alcohol at a discount or below-market value,” Wray told the court. “Underage drinkers have limited financial resources.”

The plaintiffs’ attorney, Mark Sableman of Thompson Coburn, countered by saying there is no correlation between advertising and increased alcohol consumption. He pointed to the testimony during trial of an endowed professor who has spent 30 years researching the subject as proof.

Sableman told the panel that the professor testified to 11 studies, many of which he personally conducted, that showed there was no correlation between advertisements and alcohol consumption. He said those finding were not contested.

“There has been a 15% decreased in per capita alcohol use in the United States in the last 30 years,” Sableman said. “At the same time alcohol advertising has increased by 400 times, according to the money spent.”

Sableman also addressed the law’s clause requiring at least two retailers to be listed on alcohol ads.

“I can’t imagine having an ad that says please hire me, Mark Sableman, as your lawyer – or Chris Wray,” he said.

The attorney concluded by saying there are more effective methods to reduce underage drinking that have been proven scientifically.

“We’re talking about truthful speech,” Sableman said. “We’re talking about a case where the burden of proof is on the state, which it hasn’t shown. … What we’re asking is for the state to put resources towards meaningful solutions and not chill speech.”

U.S. Circuit Judge Jane Kelly joined Melloy and Stras on the panel, which took the arguments under advisement. There is no timetable for a decision.

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