Appeals Court unanimously affirms alcohol advertising decision in favor of the MBA

Update 5/28/2020

Several Missouri rules restricting alcohol advertising were found to be unconstitutional by a federal District Court in June of 2018.  That decision was affirmed by the Eighth Circuit federal court of appeals in January of this year, and the state has since reimbursed the Missouri Broadcasters Association for its legal fees in fighting the unconstitutional rules.  Accordingly, the MBA has fully prevailed in this nine-year battle on behalf of its members.

Three state laws were found to be unconstitutional because they violated First Amendment commercial free speech rights.

The big changes are:

  • Broadcasters and other media can publicly advertise any legal alcohol discounts and specials. (And under Missouri law, practically all discounts are legal, including penny pitchers and all-you-can-drink specials.)
  • Wholesalers/distributors can be solicited and provide advertising funds in the form of vendor dollars and cooperative advertising to single retailers.

Missouri stopped enforcement of these unconstitutional restrictions two years ago, following the district court ruling. Since then many stations have already benefited from these changes, by running ads for discounts and specials.  However, we believe that many wholesalers/distributors have resisted providing vendor and co-op dollars, as they waited to see the result of the state’s appeal.

This benefits broadcasters by increasing their potential ad revenue. Even more importantly, it is a win for Missouri consumers, who are now able to see and hear ads that will allow them to make better informed purchase decisions of a legal product.

The MBA encourages all commercial broadcasters to reach out to retailers, wholesalers and distributors for advertising.  We believe this is a great opportunity for new advertising revenue as truthful alcoholic beverage advertising gets on the same footing as all other advertising.


 

Jefferson City, Missouri, January 8, 2020 – The U.S. Court of Appeals for the Eighth Circuit today unanimously affirmed the MBA’s 2018 trial court victory in its legal challenge to three Missouri laws that restricted alcohol advertising.  The decision by the three-judge panel was unanimous, holding that all three of the state laws in issue were unconstitutional, as MBA has contended for many years.

The trial court decision in June 2018, affirmed today, invalidated two regulations that prohibited media advertising of alcohol at discount prices and prices below the retailer’s cost, and a statute that prohibited alcohol producers and distributors from supporting retail media advertising, except on certain highly restricted terms.  Since the trial court’s ruling, these kinds of advertising have been fully allowed in Missouri, and the appeals court ruling today means that the allowance of this advertising will stay in place.

MBA prosecuted this case together with Zimmer Broadcasting of Mid-MO in Columbia, Uncle D’s Sports Bar & Grill in St. Joseph, and Meyer Farms in Springfield.  Their position on appeal was supported by two friend-of-the court briefs, filed on behalf of the Washington Legal Foundation, the Show-Me Institute, American Civil Liberties Union of Missouri, the Freedom Center of Missouri, and the Cato Institute.

In the ruling, by Circuit Judge Jane Kelly, the court firmly rejected all of the State of Missouri’s arguments offered in justification of its advertising bans.  The court found the state’s arguments variously unpersuasive, unsupported by evidence, internally inconsistent, and contrary to the First Amendment, which permits restrictions on truthful advertising only in narrow circumstances.  The court also noted that MBA’s evidence contradicted the state’s claim that alcohol advertising contributed to overconsumption.  At trial, MBA’s expert witness showed that alcohol consumption decreased by 15% over the last 30 years even when alcohol advertising increased by about 400%.

This is the second appellate decision in this case.  In a 2017 decision, the Eighth Circuit also unanimously ruled in MBA’s favor, and reversed a trial court decision dismissing the case.  After that ruling, the case went on to trial in 2018, and today’s decision affirms the decision of Judge Douglas Harpool, rendered in June 2018.

“We have always believed that it was wrong for Missouri law to stand in the way of truthful media advertising,” said MBA president Mark Gordon.  “We believe today’s decision makes it crystal clear that Missouri broadcasters can deliver, and Missouri citizens can receive, truthful advertising about alcoholic beverage prices just as they can with other goods and services. The MBA has been working on this issue on behalf of Missouri’s broadcasters since 2011 and is pleased with today’s decision.”