44 Liquormart, Inc. v. Rhode Island
The Court struck down Rhode Island's total ban on advertising the retail price of alcoholic beverages, ruling that the First Amendment protects truthful price information and that the state could not defend the ban simply by invoking its power over liquor under the Twenty-first Amendment.
The decision makes clear that when a state bans truthful commercial speech outright for reasons unrelated to protecting consumers from fraud, courts must scrutinize that ban carefully rather than defer to the legislature, and it disavows an earlier decision, Posadas de Puerto Rico, that had allowed broader deference to bans on advertising of so-called 'vice' products.
“the Twenty-first Amendment does not qualify the constitutional prohibition against laws abridging the freedom of speech embodied in the First Amendment”
The Court's core holding that liquor regulation power does not override First Amendment protections.
How it got here: A federal trial court ruled the ban unconstitutional after a bench trial; the First Circuit reversed, crediting the State's Twenty-first Amendment argument; the Supreme Court granted certiorari.
The Case in Depth
What happened
Rhode Island had two statutes, dating to 1956, that banned nearly all advertising of retail liquor prices, both by sellers and by the news media. A liquor retailer, 44 Liquormart, was fined $400 for a newspaper ad that implied low prices without stating them. Along with another retailer, Peoples, it sued, arguing the ban violated the First Amendment; the State said the ban promoted temperance by keeping alcohol prices high.
The question before the Court
Could Rhode Island ban all advertising of retail liquor prices in order to keep prices — and therefore drinking — down?
The Court's answer
No — the Court ruled that Rhode Island could not ban truthful liquor-price advertising just to keep prices, and consumption, higher. Because the ban suppressed accurate information about a lawful product for reasons having nothing to do with preventing fraud or deception, the Court reviewed it with special care and found Rhode Island had not shown the ban actually reduced drinking, nor that it was narrowly tailored — the State had other tools, like taxes or minimum prices, that could raise prices directly without silencing speech.
The Court also rejected the argument that Rhode Island's power to regulate alcohol sales under the Twenty-first Amendment gave the ban extra protection from First Amendment scrutiny, disavowing an earlier case, Posadas de Puerto Rico, that had deferred to similar legislative choices to suppress advertising instead of regulating directly.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Businesses that sell lawful products — liquor stores, and by extension other regulated industries — gained stronger protection against state laws that try to suppress honest price information to manipulate consumer behavior. States seeking to discourage consumption of legal products can no longer simply ban advertising; they must use direct regulation like taxes or purchase limits, or show the speech ban truly and substantially serves their goal.
What changes now
This is a final merits decision resolving the constitutional question; the case is not remanded for further factfinding, and Rhode Island's price-advertising ban is unenforceable. The ruling also signals that other states with similar alcohol-advertising restrictions, or restrictions on advertising of other lawful 'vice' products, can no longer rely on Posadas-style deference and must show their bans are truly necessary and effective.
What this does not decide
The Court did not adopt a single, unified rationale — different justices relied on different reasoning, and a majority did not agree on whether the Central Hudson balancing test itself should be replaced. The decision also does not disturb the underlying holding of California v. LaRue permitting regulation of nude dancing in establishments serving alcohol, only its reliance on the Twenty-first Amendment.
Concurrences and dissents
Concurrence — Justice Thomas
Justice Thomas agreed the ban was unconstitutional but argued the Central Hudson balancing test should not be used at all when the government's asserted interest is to keep consumers ignorant in order to manipulate their choices. He would treat that kind of interest as per se illegitimate, whether the speech at issue is 'commercial' or not, and would return to the reasoning of Virginia Board of Pharmacy.
Concurrence — Justice O'Connor
Justice O'Connor, joined by the Chief Justice, Justice Souter, and Justice Breyer, agreed the ban was invalid but would have decided the case more narrowly under the existing Central Hudson test, resting solely on the ban's failure to be reasonably tailored to its stated goal. She declined to reach the broader Twenty-first Amendment and Posadas questions the principal opinion addressed.
Concurrence — Justice Scalia
Justice Scalia concurred in the judgment and joined the portions of Justice Stevens's opinion addressing the Twenty-first Amendment, but expressed discomfort with the Central Hudson test itself. He argued the Court lacked the historical evidence needed to say whether Central Hudson was wrong or what should replace it, so he resolved the case under existing precedent without endorsing new doctrine.
How the Court got there
The legal reasoning, step by step
- The Court applied its commercial-speech framework from Central Hudson Gas & Electric Corp. v. Public Service Commission, the 1980 case that asks whether a speech restriction directly advances a substantial government interest and is no broader than necessary, and held that complete bans on truthful, nonmisleading advertising about lawful products deserve especially careful review because they foreclose alternative ways of getting the information to the public.
- Because Rhode Island's ban targeted only truthful information about a lawful product, and served no goal of preventing deception, the Court held the State bore a heavy burden to show the ban would materially advance its stated interest in reducing alcohol consumption.
- The trial record showed no significant link between the price-advertising ban and reduced consumption — the district judge had found the ban had no significant impact on drinking levels in Rhode Island — so the Court concluded the State failed to show the ban directly advanced its temperance goal.
- The Court also found the ban failed the requirement that speech restrictions be no more extensive than necessary, since Rhode Island had non-speech alternatives available, such as minimum pricing, taxation, or purchase limits, that would more directly raise prices without silencing truthful speech.
- Rejecting the State's reliance on Posadas de Puerto Rico Associates v. Tourism Co., a 1986 case that had deferred to a legislature's choice to suppress advertising of casino gambling instead of taking direct regulatory action, the Court concluded that decision had wrongly allowed the government to suppress speech as just another regulatory tool and declined to follow its reasoning.
- Turning to the Twenty-first Amendment, which lets states regulate the sale and use of alcohol free of ordinary Commerce Clause limits, the Court held that this grant of power over commerce does not diminish the protections of any other part of the Constitution, including the First Amendment, so it could not rescue the price-advertising ban.
Doctrinal impact
Cases affected by this decision
Limits Posadas de Puerto Rico Associates v. Tourism Co. (478 U.S. 328)
The Court rejected Posadas's highly deferential approach to legislative bans on advertising of lawful 'vice' products.
Limits California v. LaRue (409 U.S. 109)
The Court disavowed LaRue's reliance on the Twenty-first Amendment while leaving its actual holding undisturbed.
Reaffirms Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y. (447 U.S. 557)
The Court applied and relied on Central Hudson's four-part commercial speech test to strike down the ban.