Bad Frog Brewery, Inc. v. New York State Liquor Authority

134 F.3d 87, 1998 WL 10921
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 15, 1998
DocketNo. 1080, Docket 97-7949
StatusPublished
Cited by9 cases

This text of 134 F.3d 87 (Bad Frog Brewery, Inc. v. New York State Liquor Authority) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bad Frog Brewery, Inc. v. New York State Liquor Authority, 134 F.3d 87, 1998 WL 10921 (2d Cir. 1998).

Opinion

JON 0. NEWMAN, Circuit Judge:

A picture of a frog with the second of its four unwebbed “fingers” extended in a manner evocative of a well known human gesture of insult has presented this Court with significant issues concerning First Amendment protections for commercial speech. The frog appears on labels that Bad Frog Brewery, Inc. (“Bad Frog”) sought permission to use on bottles of its beer products. The New York State Liquor Authority (“NYSLA” or “the Authority”) denied Bad Frog’s application.

Bad Frog appeals from the July 29, 1997, judgment of the District Court for the Northern District of New York (Frederic J. Scullin, Jr., Judge) granting summary judgment in favor of NYSLA and its three Commissioners and rejecting Bad Frog’s commercial free speech challenge to NYSLA’s decision. We conclude that the State’s prohibition of the labels from use in all circumstances does not materially advance its asserted interests in insulating children from vulgarity or promoting temperance, and is not narrowly tailored to the interest concerning children. We therefore reverse the judgment insofar as it denied Bad Frog’s federal claims for injunctive relief with respect to the disapproval of its labels. We affirm, on the ground of immunity, the dismissal of Bad Frog’s federal damage claims against the commissioner defendants, and affirm the dismissal of Bad Frog’s state law damage claims on the ground that novel and uncertain issues of state law render this an inappropriate case for the exercise of supplemental jurisdiction.

Background

Bad Frog is a Michigan corporation that manufactures and markets several different types of alcoholic beverages under its “Bad Frog” trademark. This action concerns labels used by the company in the marketing of Bad Frog Beer, Bad Frog Lemon Lager, and Bad Frog Malt Liquor. Each label prominently features an artist’s rendering of [91]*91a frog holding up its four-“fingered” right “hand,” with the back of the “hand” shown, the second “finger” extended, and the other three “fingers” slightly curled. The membranous webbing that connects the digits of a real frog’s foot is absent from the drawing, enhancing the prominence of the extended “finger.” Bad Frog does not dispute that the frog depicted in the label artwork is making the gesture generally known as “giving the finger” and that the gesture is widely regarded as an offensive insult, conveying a message that the company has characterized as “traditionally ... negative and nasty.”1 Versions of the label feature slogans such as “He just don’t care,” “An amphibian with an attitude,” “Turning bad into good,” and “The beer so good ... it’s bad.” Another slogan, originally used but now abandoned, was “He’s mean, green and obscene.”

Bad Frog’s labels have been approved for use by the Federal Bureau of Alcohol, Tobacco, and Firearms, and by authorities in at least 15 states and the District of Columbia, but have been rejected by authorities in New Jersey, Ohio, and Pennsylvania.

In May 1996, Bad Frog’s authorized New York distributor, Renaissance Beer Co., made an initial application to NYSLA for brand label approval and registration pursuant to section 107-a(4)(a) of New York’s Alcoholic Beverage Control Law. See N.Y. Aleo. Bev. Cont. Law § 107-a(4)(a) (McKinney 1987 & Supp.1997). NYSLA denied that application in July. Bad Frog filed a new application in August, resubmitting the prior labels and slogans, but omitting the label with the slogan “He’s mean, green and obscene,” a slogan the Authority had previously found rendered the entire label obscene. That slogan was replaced with a new slogan, “Turning bad into good.” The second application, like the first, included promotional material making the extravagant claim that the frog’s gesture, whatever its past meaning in other contexts, now means “I want a Bad Frog beer,” and that the company’s goal was to claim the gesture as its own and as a symbol of peace, solidarity, and good will.

In September 1996, NYSLA denied Bad Frog’s second application, finding Bad Frog’s contention as to the meaning of the frog’s gesture “ludicrous and disingenuous.” NYS-LA letter to Renaissance Beer Co. at 2 (Sept. 18, 1996) (“NYSLA Decision”). Explaining its rationale for the rejection, the Authority found that the label “encourages combative behavior” and that the gesture and the slogan, “He just don’t care,” placed close to and in larger type than a warning concerning potential health problems,

foster a defiance to the health warning on the label, entice underage drinkers, and invite the public not to heed conventional wisdom and to disobey standards of decorum.

Id. at 3. In addition, the Authority said that it

considered that approval of this label means that the label could appear in grocery and convenience stores, with obvious exposure on the shelf to children of tender age

id., and that it

is sensitive to and has concern as to [the label’s] adverse effects on such a youthful audience.

Id. Finally, the Authority said that it

has considered that within the state of New York, the gesture of “giving the finger” to someone, has the insulting meaning of “Fuck You,” or “Up Yours,” ... a confrontational, obscene gesture, known to lead to fights, shootings and homicides ... [,] concludes that the encouraged use of this gesture in licensed premises is akin to [92]*92yelling “fire” in a crowded theatre, ... [and] finds that to approve this admittedly obscene, provocative confrontational gesture, would not be conducive to proper regulation and control and would tend to adversely affect the health, safety and welfare of the People of the State of New York.

Id.

Bad Frog filed the present action in October 1996 and sought a preliminary injunction barring NYSLA from taking any steps to prohibit the sale of beer by Bad Frog under the controversial labels. The District Court denied the motion on the ground that Bad Frog had not established a likelihood of success on the merits. See Bad Frog Brewery, Inc. v. New York State Liquor Authority, No. 96-CV-1668, 1996 WL 705786 (N.D.N.Y. Dec. 5, 1996). The Court determined that NYSLA’s decision appeared to be a permissible restriction on commercial speech under Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), and that Bad Frog’s state law claims appeared to be barred by the Eleventh Amendment.

The parties then filed cross motions for summary judgment, and the District Court granted NYSLA’s motion. See Bad Frog Brewery, Inc. v. New York State Liquor Authority, 973 F.Supp. 280 (N.D.N.Y.1997). The Court reiterated the views expressed in denying a preliminary injunction that the labels were commercial speech within the meaning of Central Hudson and that the first prong of Central Hudson was satisfied because the labels concerned a lawful activity and were not misleading. Id. at 282. Turning to the second prong of Central Hudson, the Court considered two interests, advanced by the State as substantial: (a) “promoting temperance and respect for the law” and (b) “protecting minors from profane advertising.” Id. at 283.

Assessing these interests under the third prong of

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Bluebook (online)
134 F.3d 87, 1998 WL 10921, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bad-frog-brewery-inc-v-new-york-state-liquor-authority-ca2-1998.