Restrictions On Commercial Speech Regarding Alcoholic Beverages To Be Reconsidered Under Strict Judicial Scrutiny In Light Of First Amendment.

During the early 1900s, manufacturers and wholesalers of alcoholic beverages “tied” retailers to them by providing them with loans, reduced rents, free equipment and other means. Such “tied-house” arrangements caused a vast growth of the number of saloons and bars, resulting in various social evils. Accordingly, California passed Business and Professions Code section 25503(f)-(h), forbidding giving anything of value to retailers for advertising their alcoholic products. Thus, for example, a liquor store owner in California can hang a Captain Morgan Rum sign in the store’s window, but the Captain can’t directly or indirectly pay for that advertising. In 1986, in Actmedia, Inc. v. Stroh (9th Cir. 1986) 830 F.2d 957, the court held that section 25503 was consistent with the First Amendment, but now states: “As a content-based restriction on non-misleading commercial speech regarding a lawful good or service, section 25503(f)-(h) now must survive heightened judicial scrutiny.” The case was remanded to the trial court. (Retail Digital Network, LLC v. Appelsmith (Ninth Cir.; January 7, 2016) 810 F.3d 638.)