Missouri Broadcasters Assoc. v. Eric S. Schmitt

946 F.3d 453
Court of Appeals for the Eighth Circuit·Decided January 8, 2020·No. 18-2611·Published·Cited by 2 cases

Opinion

United States Court of Appeals For the Eighth Circuit

No. 18-2611

Missouri Broadcasters Association; Meyer Farms, Inc.; Uncle D’s Sports Bar & Grill, L.L.C.; Zimmer Radio of Mid-MO, Inc.

lllllllllllllllllllllPlaintiffs - Appellees

v.

Eric S. Schmitt, Attorney General of the State of Missouri, in his official capacity; Dorothy Taylor, Acting State Supervisor of the Division of Alcohol and Tobacco Control

lllllllllllllllllllllDefendants - Appellants

------------------------------

National Beer Wholesalers Association

lllllllllllllllllllllAmicus on Behalf of Appellant(s)

Washington Legal Foundation

lllllllllllllllllllllAmicus on Behalf of Appellee(s)

Wine & Spirits Wholesalers of America, Inc.

lllllllllllllllllllllAmicus on Behalf of Appellant(s)

Show-Me Institute

lllllllllllllllllllllAmicus on Behalf of Appellee(s)

Missouri Beer Wholesalers Association

lllllllllllllllllllllAmicus on Behalf of Appellant(s)

American Civil Liberties Union of Missouri

lllllllllllllllllllllAmicus on Behalf of Appellee(s)

Missouri Craft Brewers Guild

lllllllllllllllllllllAmicus on Behalf of Appellant(s)

The Freedom Center of Missouri

lllllllllllllllllllllAmicus on Behalf of Appellee(s)

American Beverage Licensees

lllllllllllllllllllllAmicus on Behalf of Appellant(s)

Cato Institute

lllllllllllllllllllllAmicus on Behalf of Appellee(s)

Appeal from United States District Court for the Western District of Missouri - Jefferson City

Submitted: September 26, 2019 Filed: January 8, 2020

Before KELLY, MELLOY, and STRAS, Circuit Judges.

KELLY, Circuit Judge.

Missouri Broadcasters sued Missouri concerning a Missouri statute and two Missouri regulations that allegedly violate the First Amendment right to free speech.1 After a bench trial, the district court2 determined that the Missouri laws violated the First Amendment. Missouri appeals the district court’s judgment.

I. Background

Missouri has a three-tiered system to regulate the sale and distribution of alcohol within its borders. Mo. Rev. Stat. § 311.010–.950. It consists of (1) producers (e.g., distilleries, wineries, or breweries), (2) distributors or wholesalers, and (3) retailers (e.g., bars or liquor stores). Under a strict three-tiered system, producers are prohibited from distributing and retailing, distributors are prohibited from producing and retailing, and retailers are prohibited from producing and distributing. The laws that establish this system are commonly known as “tied-house” laws.3

1 “Missouri Broadcasters” refer collectively to the appellees: a non-profit corporation promoting the interests and welfare of the broadcasting industry, a corporation operating radio stations, a winery, and a commercial food and drink establishment licensed to sell alcohol. “Missouri” refers collectively to appellants and named defendants in this case, the Missouri Supervisor of the Division of Alcohol and Tobacco Control and the Missouri Attorney General.

2

The Honorable M. Douglas Harpool, United States District Judge for the Western District of Missouri.

3 Pre-Prohibition, alcohol was distributed through a tied-house system in various states. Under a tied-house system, an alcohol producer would set up saloonkeepers and provide them with premises and equipment. In exchange, the saloonkeepers agreed to sell only that producer’s products and to meet set sales requirements. Saloonkeepers often encouraged irresponsible drinking to meet those requirements. After the Twenty-first Amendment was enacted, many states adopted the three-tiered distribution model in part to preclude this system. Tenn. Wine and Spirits Retailers Ass’n v. Thomas, 139 S.Ct. 2449, 2463 n.7 (2019).

The stated purpose of Missouri’s tied-house laws, formally known as its Liquor Control Law, is “to promote responsible consumption, combat illegal underage drinking, and achieve other important state policy goals such as maintaining an orderly marketplace composed of state-licensed alcohol producers, importers, distributors, and retailers.” Id. § 311.015.

Section 311.070.1 (the Statute) of the Liquor Control Law provides, in relevant part:

Distillers, wholesalers, winemakers, brewers or their employees, officers or agents shall not, except as provided in this section, directly or indirectly, have any financial interest in the retail business for sale of intoxicating liquors, and shall not, except as provided in this section, directly or indirectly, loan, give away or furnish equipment, money, credit or property of any kind, except ordinary commercial credit for liquors sold to such retail dealers.

Id. § 311.070.1. Missouri interprets the Statute as prohibiting producers and distributors4 from retail advertising, because this type of advertising would qualify as a “financial interest in the retail business.”

Subsection 311.070.4(10) provides an exception to the Statute’s general prohibition on retail advertising by producers and distributors. Under this exception, a producer or distributor “may in an advertisement list the names and addresses of two or more unaffiliated retail businesses selling its product,” but only if it excludes the retail price of the product in the advertisement, lists multiple retail businesses not

4 We use the term “producers and distributors” to refer collectively to all manufacturers and distributors, including distillers, wholesalers, winemakers, and brewers.

affiliated with one another, and makes the list of retailers inconspicuous.5 Id. § 311.070(4)(10). According to Missouri, this exception does not undermine its three-tiered system because any value to the retailer is “de minimis.”

Missouri also enacted two regulations that prohibit certain types of advertisements. The first, the Discount Regulation, Mo. Code Regs. Rev. Tit. 11, § 70-2.240(5)(G), prohibits retailers from advertising discounted prices for “intoxicating liquor” outside of their establishments.6 For example, this regulation

5 Section 311.070.4(10) reads:

The distiller, wholesaler, winemaker or brewer may in an advertisement list the names and addresses of two or more unaffiliated retail businesses selling its product if all of the following requirements are met:

(a) The advertisement shall not contain the retail price of the product; (b) The listing of the retail businesses shall be the only reference to such retail businesses in the advertisement; (c) The listing of the retail businesses shall be relatively inconspicuous in relation to the advertisement as a whole; and (d) The advertisement shall not refer only to one retail business or only to a retail business controlled directly or indirectly by the same retail business.

6 The Discount Regulation during the relevant time read:

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Missouri Broadcasters Assoc. v. Eric S. Schmitt, 946 F.3d 453 (8th Cir. 2020).

946 F.3d 453 (Missouri Broadcasters Assoc. v. Eric S. Schmitt) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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