Facts of the Case

Rhode Island passed a statute banning the advertisement of retail liquor prices in places where liquor is not sold. Petitioners filed suit claiming that the statute violated their First Amendment right to freedom of speech. The District Court found the ban unconstitutional, noting that it did not serve any interest Rhode Island might have had in promoting temperance. The Court of Appeals reversed, holding that open competition for liquor pricing would be harmful insofar at it would increase consumption. The Supreme Court granted certiorari.

Question

Is Rhode Island's statute an infringement on the First Amendment right to commercial freedom of speech? If it is, can Rhode Island still pass such legislation under the Twenty-first Amendment which limits the dormant Commerce Clause by empowering the states to regulate the sale of alcohol?

Conclusion

Yes and no. In a fractious opinon for a unanimous Court, Justice Stevens found Rhode Island's statutory ban on liquor price advertising to be an unconstitutional infringement of the liquor sellers' First Amendment right to freedom of speech. In response to Rhode Island's claim that it passed the statutory ban to protect consumers from "commercial harms," Justice Stevens held that governmental impediments to truthful and accurate commercial messages rarely protect consumers. On the contrary, courts must take "special care" when considering such "protective" measures since they often hinder public choice and obstruct necessary debate over public policy issues. Furthermore, Rhode Island failed to show that its statutory ban would lower market-wide liquor consumption, must less alter alcohol consumption among abusive drinkers who are most in need of assistance. Finally, Justice Stevens held that although the Twenty-first Amendment did empower Rhode Island to regulate the sale of liquor, such regulatory power is not to be exercised to the detriment of its constitutional obligation to protect and abide by the First Amendment's freedom of speech guarantee.