CRUCIAL COURT UPHOLDS CIGARETTE AD BAN [11/15]

In a very significant loss for the tobacco industry, the U.S. Court of Appeals has upheld Baltimore's bans on billboards advertising tobacco and alcohol in most parts of the city as constitutional and not in violation of any First Amendment rights to advertise.

This ruling that could significantly bolster the Food and Drug Administration's (FDA) efforts to keep alcohol and cigarette ads away from children because the same "freedom-to-advertise" issues are being raised in a challenge to the FDA's regulations designed to limit cigarette advertising aimed at children.

The ruling is particularly significant because the tobacco and advertising industries are currently challenging the FDA regulations in a North Carolina, a federal court that is part of the 4th Circuit.

The new U.S. Court of Appeals decision distinguishes the situation in Baltimore from a very different statute which the U.S. Supreme Court recently struck down.

The 4th Circuit rejected the industry's argument that the two situations were similar, emphasizing the need to protect children.

It stressed that the ban complements preexisting state legislation that prohibits the sale of cigarettes and alcohol to minors.

The appeals court also noted that the U.S. Supreme Court has repeatedly held that "children deserve solicitude" when assessing First Amendment arguments "because they lack the ability to assess and analyze fully the information presented through commercial media."

Below is a copy of the full text of the majority decision upholding the legislation protecting children:

ANHEUSER-BUSCH, INCORPORATED, Plaintiff-Appellant,
v.
Kurt L. SCHMOKE, in his official capacity as Mayor of
Baltimore City;

PENN ADVERTISING OF BALTIMORE, INCORPORATED,
Plaintiff-Appellant,
v.
MAYOR AND CITY COUNCIL OF BALTIMORE CITY, A Municipal
Corporation, Defendant-
Appellee

Nos. 94-1431, 94-1432.
United States Court of Appeals,
Fourth Circuit.
Nov. 13, 1996.
On Remand from the United States Supreme Court.  (S.Ct.
No. 95-685)

Before NIEMEYER and HAMILTON, Circuit Judges, and
BUTZNER, Senior Circuit Judge.

Affirmed by published opinion.  Judge NIEMEYER wrote the
majority opinion, in which Judge HAMILTON joined.  Senior
Judge BUTZNER wrote a dissenting opinion.

OPINION

NIEMEYER, Circuit Judge:

On May 13, 1996, the Supreme Court handed down its
decision in 44 Liquormart, Inc. v. Rhode Island, --- U.S.
----, 116 S.Ct. 1495, 134 L.Ed.2d 711 (1996), and a week
later vacated our decision in this case and remanded it
to us "for further consideration in light of 44
Liquormart, Inc. v. Rhode Island."  116 S.Ct. 1821.  We
have read the opinion in 44 Liquormart and have
considered its impact on the judgment in this case.  For
the reasons that follow, we conclude that 44 Liquormart
does not require us to change our decision.  Accordingly,
we affirm the district court's judgment for the reasons
previously given and readopt our previous decision. [FN*] 
See Anheuser- Busch, Inc. v. Schmoke, 63 F.3d 1305 (4th
Cir.1995) (Anheuser-Busch I).
I
In Anheuser-Busch I, we upheld against a constitutional
challenge a city ordinance prohibiting the placement of
stationary, outdoor advertising that advertises alcoholic
beverages in certain areas of Baltimore City. 63 F.3d at
1317.  The ordinance was designed to promote the welfare
and temperance of minors exposed to advertisements for
alcoholic beverages by banning such advertisements in
particular areas where children are expected to walk to
school or play in their neighborhood.  Id. at 1314-17.

Applying the four-prong test for evaluating commercial
speech announced in Central Hudson Gas & Elec. Corp. v.
Public Serv. Comm'n, 447 U.S. 557, 100 S.Ct. 2343, 65
L.Ed.2d 341 (1980), we concluded, in respect to the
disputed prongs, that the ban of outdoor advertising of
alcoholic beverages in limited areas directly and
materially advances Baltimore's interest in promoting the
welfare and temperance of minors.  See Anheuser-Busch I,
63 F.3d at 1314.

After our own independent assessment, we recognized the
reasonableness of Baltimore City's legislative finding
that there is a "definite correlation between alcoholic
beverage advertising and underage drinking."  Id.  We
also concluded that the regulation of commercial speech
is not more extensive than necessary to serve the
governmental interest.  Id. at 1316-17.

Recognizing that in the regulation of commercial speech
there is some latitude in the "fit" between the
regulation and the objective, we concluded that "no less
restrictive means may be available to advance the
government's interest."  Id. at 1316.

While we acknowledged that the geographical limitation on
outdoor advertising may also reduce the opportunities for
adults to receive the information, we recognize that
there were numerous other means of advertising to adults
that did not subject the children to "involuntary and
unavoidable solicitation [while] ... walking to school or
playing in their neighborhood."  Id. at 1314.

Based on our close look at Baltimore's asserted goal and
the billboard zoning used to achieve that objective, we
concluded: Although no ordinance of this kind could be so
perfectly tailored as to all and only those areas to
which children are daily exposed, Baltimore's efforts to
tailor the ordinance by exempting commercial and
industrial zones from its effort renders it not more
extensive than is necessary to serve the governmental
interest under consideration. Id. at 1317.

II

In 44 Liquormart, by contrast, the State prohibited all
advertising throughout Rhode Island, "in any manner
whatsoever," of the price of alcoholic beverages except
for price tags or signs displayed with the beverages and
not visible from the street.  --- U.S. at ----, 116 S.Ct.
at 1501.  The State contended that the ban served the
State's interest in promoting temperance by keeping
alcoholic prices high and therefore consumption low.  See
id.

The district court found as a fact, however, that the ban
"has no significant impact" on consumption.  Liquormart,
Inc. v. Racine, 829 F.Supp. 543, 549 (D.R.I.1993).  The
State also argued that the Twenty-first Amendment's
delegation to the states of the power "to prohibit
commerce in, or the use of, alcoholic beverages," U.S.
Const. amend. XXI, s 2, favors the state's ban of price
advertising of alcoholic beverages.  See --- U.S. at
----, 116 S.Ct. at 1502.

The Supreme Court held the blanket ban unconstitutional
simply as "an abridgement of speech protected by the
First Amendment" and rejected the claim that the
Twenty-first Amendment "save[d] Rhode Island's ban on
liquor price advertising."  --- U.S. at ----, ---- -
----, 116 S.Ct. at 1501, 1514-15. The opinion for the
Court did not provide a rationale for its conclusion that
the ban violated the First Amendment, and no opinion
addressing the First Amendment violation commanded a
majority of the Court.

Under Marks v. United States, 430 U.S. 188, 97 S.Ct. 990,
51 L.Ed.2d 260 (1977), when a fragmented Court decides a
case and no single rationale explaining the result enjoys
the assent of five Justices, "the holding of the Court
may be viewed as that position taken by those Members who
concurred in the judgments on the narrowest grounds." 
Id. at 193.

Applying the Marks rule, eight justices in three separate
opinions concluded that the mechanism of keeping
alcoholic prices high as a way to keep consumption low
imposes too broad a prohibition on speech to be justified
by the end.  See 44 Liquormart, 116 S.Ct. 1509-10
(Stevens, J., concurring in the judgment);  id. at 1519
(Thomas, J., concurring in the judgment); id. at 1521-22
(O'Connor, J., concurring in the judgment).

Justice Stevens, joined by Justices Kennedy, Souter, and
Ginsburg, noted that "without any findings of fact, or
indeed any evidentiary support whatsoever, we cannot
agree with the assertion that the price advertising ban
will significantly advance the State's interest in
promoting temperance."  Id. at 1509.  Justice Stevens
also noted that alternative forms of regulation were
available that would not impinge speech and would "be
more likely to achieve the State's goal of promoting
temperance.  As the State's own expert conceded, higher
prices can be maintained either by direct regulation or
by increased taxation."  Id. at 1510.

Similarly, Justice O'Connor, writing an opinion in which
Chief Justice Rehnquist, Justice Souter and Justice
Breyer joined, concluded, If the target is simply higher
prices generally to discourage consumption, the
regulation imposes too great, and unnecessary, a
prohibition on speech in order to achieve it....  "[T]he
objective of lowering consumption of alcohol by banning
price advertising could be accomplished by establishing
minimum prices and/or by increasing sales taxes on
alcoholic beverages." Id. at 1521-22 (O'Connor, J.,
concurring in the judgment) (quoting 44 Liquormart, Inc.
v. Rhode Island, 39 F.3d 5, 7 (1st Cir.1994) (quoting
Rhode Island's expert witness)).

Justice O'Connor concluded that because the regulation
fails "even the less stringent standard set out in
Central Hudson, nothing here requires adoption of a new
analysis for the evaluation of commercial speech
regulation."  Id. at 1522 (O'Connor, J., concurring in
the judgment).

Eight justices thus concluded that keeping legal users of
alcoholic beverages ignorant of prices through a blanket
ban on price advertising does not further any legitimate
end.  See id. at 1509-10 (Stevens, J., concurring in the
judgment);  id. at 1518 (Thomas, J., concurring in the
judgment); id. at 1521-22 (O'Connor, J., concurring in
the judgment).

III

While Rhode Island's blanket ban on price advertising
failed Central Hudson scrutiny, Baltimore's attempt to
zone outdoor alcoholic beverage advertising into
appropriate areas survived our "close look" at the
legislature's means of accomplishing its objective in
Anheuser-Busch I.  Baltimore's ordinance expressly
targets persons who cannot be legal users of alcoholic
beverages, not legal users as in Rhode Island.  More
significantly, Baltimore does not ban outdoor advertising
of alcoholic beverages outright but merely restricts the
time, place, and manner of such advertisements.  And
Baltimore's ordinance does not foreclose the plethora of
newspaper, magazine, radio, television, direct mail,
Internet, and other media available to Anheuser-Busch and
its competitors.

Moreover, in Baltimore City's case, neither the state nor
the city is attempting to undermine democratic processes
and circumvent public scrutiny by substituting a ban on
advertising for a ban on the product, as the 44
Liquormart Court feared was the case with Rhode Island. 
--- U.S. at ----, 116 S.Ct. at 1508 (Stevens, J.,
concurring in the judgment);  see also id. at 1517
(Thomas, J., concurring in the judgment) (citing "the
dangers of permitting the government to do covertly what
it might not have been able to muster the political
support to do openly";  Central Hudson, 447 U.S. at 566
n. 9;  Virginia Pharmacy Board v. Virginia Citizens
Consumer Council, 425 U.S. 748, 780 n. 8, 96 S.Ct. 1817,
48 L.Ed.2d 346 (1976) (Stewart, J., concurring).

Rather, in Baltimore City, like in other communities, the
possession and consumption of alcoholic beverages by
minors has been already banned directly and forthrightly
through legislation.  See Md.Code Art. 27, ss 400-403A. 
Baltimore's restrictions thus reinforce the democratic
decisionmaking mechanism's conclusion as to the
dangerousness of underage drinking by protecting children
from exposure to advertising which the legislature
reasonably considers harmful in itself to children's
maturation. And far from undermining the free
dissemination of information to independently choosing
consumers, Baltimore's ordinance supports the full
development of its young so that they will be able to
assess their market options intelligently and
independently.

In addition to the reasons given in Anheuser-Busch I and
given here based on our consideration of 44 Liquormart,
the differences between the Baltimore and Rhode Island
regulations further support the constitutionality of
Baltimore's ordinance.  In contrast to Rhode Island's
desire to enforce adult temperance through an artificial
budgetary constraint, Baltimore's interest is to protect
children who are not yet independently able to assess the
value of the message presented.

This decision thus conforms to the Supreme Court's
repeated recognition that children deserve special
solicitude in the First Amendment balance because they
lack the ability to assess and analyze fully the
information presented through commercial media.  In the
context of cable television, the Supreme Court recently
upheld restrictions on programming imposed by the Cable
Television Consumer Protection and Competition Act as a
means of protecting children from indecent programming. 
See Denver Area Educ. Telecommunications Consortium, Inc.
v. FCC, --- U.S. ----, ----, 116 S.Ct. 2374, 3286, 135
L.Ed.2d 888 (1996) (plurality opinion).

In the context of the radio medium, the Court has
approved extra restrictions on indecent speech because of
the pervasiveness of the medium and the presence of
children in the audience.  See FCC v. Pacifica
Foundation, 438 U.S. 726, 750-51, 98 S.Ct. 3026, 57
L.Ed.2d 1073 (1978) (comparing indecent speech during
hours when children are listening to the proverbial pig
in the parlor);  see also Action for Children's
Television v. FCC, 58 F.3d 654, 657 (D.C.Cir.1995)
(upholding the Public Telecommunications Act against a
First Amendment challenge based on the state's compelling
interest in protecting minors), cert. denied, 116 S.Ct.
701 (1996).

Similarly, the Supreme Court has sustained a law which
protected children from non-obscene literature.  See
Ginsburg v. New York, 390 U.S. 629, 639-40, 88 S.Ct.
1274, 20 L.Ed.2d 195 (1968).  And, while it has
acknowledged a right to private possession of adult
pornography in the home, see Stanley v. Georgia, 394 U.S.
557, 566, 89 S.Ct. 1243, 22 L.Ed.2d 542 (1968), the Court
has clearly distinguished child pornography and allowed
a stronger legislative response "to destroy a market for
the exploitative use of children."  Osborn v. Ohio, 495
U.S. 103, 109, 110 S.Ct. 1691, 109 L.Ed.2d 98 (1990); 
see also New York v. Ferber, 458 U.S. 747, 759, 102 S.Ct.
3348, 73 L.Ed.2d 1113 (1982).  The underlying reason for
the special solicitude of children was articulated long
ago:  "A democratic society rests, for its continuance,
upon the healthy, well-rounded growth of young people
into full maturity as citizens."  Prince v.
Massachusetts, 321 U.S. 158, 168, 64 S.Ct. 438, 88 L.Ed.
645 (1944).

Baltimore's ordinance attempts to protect its children in
a manner and with a motive distinct from those evidenced
by Rhode Island in 44 Liquormart and in accord with an
unbroken chain of Supreme Court cases which indicate its
desire to ensure that children do not become lost in the
marketplace of ideas. Accordingly, on reconsideration of
our Central Hudson analysis of the time, place, and
manner restriction in Anheuser-Busch I in light of 44
Liquormart, we again affirm the judgment of the district
court.

IT IS SO ORDERED


FN* In readopting our opinion, we do not continue to rely
on Posadas de Puerto Rico Associates v. Tourism Co. of
P.R., 478 U.S. 691 (1984), in view of the doubt placed on
that opinion by a majority of the Court in 44 Liquormart. 
See --- U.S. at ----, 116 S.Ct. at 1511 (Stevens, J.,
concurring in the judgment) (joined by Kennedy, Thomas,
and Ginsburg, JJ.) and --- U.S. at ----, 116 S.Ct. at
1522 (O'Connor, J., concurring in the judgment) (joined
by Rehnquist, C.J., and Souter and Breyer, JJ.).  Because
we do not defer blindly to the legislative rationale, but
rather agree with it based on our own independent
conclusion about the fit between legislative objective
and the regulation used to achieve that objective, the
holding in Posadas is not necessary to our opinions
upholding Baltimore City's ordinance.

FN* Penn Advertising of Baltimore, Inc. v. Mayor and City
Council, 862 F.Supp. 1402 (D.Md.1994), aff'd, 63 F.3d
1318 (4th Cir.1995), vacated and remanded sub nom. Penn
Advertising of Baltimore, Inc. v. Schmoke, --- U.S. ----,
116 S.Ct. 2575, 135 L.Ed.2d 1090 (1996).
 

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