Restaurateur Files First Amendment Lawsuit Against VA Happy Hour Laws

Virginia’s Alcohol Beverage Control Authority (ABC) not only has a monopoly on the Commonwealth’s liquor ans spirits market, but also has highly restrictive rules and regulations for bars and restaurants advertising drink specials and “happy hour” deals. In light of this, a Virginia restaurateur has filed a First amendment lawsuit against ABC claiming the state’s restrictions on happy hour advertising violate his right to free speech.

In a report from Watchdog, Chef Geoff Tracy, an author of cookbooks and owner of restaurants in Virginia, Maryland, and Washington, D.C., believes that the happy hour rules prevent him from creatively advertising deals in his businesses.

Currently, restaurants may promote drink specials on social media, posters, flyers, and their website in advertisements. They can also promote the time span of the happy hours and specific drink brands and types.

However, according to ABC, state law prohibits happy hours from being conducted between 9 p.m. and 2 a.m. Restaurants may only use one of two phrases for promotions: “happy hour” or “drink specials.” Promotion of happy hour prices and discount amounts on the outside of buildings or on external signs and two-for-one drink specials are deemed illegal by the state.

Last week, Tracy filed the First Amendment lawsuit through the Pacific Legal Foundation in Washington. Jonathan Wood, an attorney with the firm, said, “Virginia is plainly targeting speech.”

The lawsuit filed in Virginia’s Eastern District federal court says that the Commonwealth’s happy hour regulations, “ban honest, straightforward advertising messages and violate the Constitution’s guarantees of free speech.”

Furthermore, the lawsuit states, “The state’s happy hour advertising restrictions … prohibit businesses from communicating entirely truthful and non-misleading information to their customers on the theory that censorship, when it pertains to alcohol, is for the consumer’s own good…These outdated and paternalistic notions cannot justify the state’s unconstitutional burdens on speech.”

Tracy wishes to gain the flexibility to creatively display his happy hours specials in ways like “Wine Down Wednesday,” “Thirsty Thursday,” and “Sunday Funday,” according to the report. Nevertheless, current regulations make happy hour ads “information-free” for potential restaurant goers.

“Advertising is crucial to the restaurant business, especially in Metro D.C. where happy hours are popular and competition among eateries is fierce,” Tracy said. “But Virginia would rather punish me than encourage economic prosperity.”

Virginia’s regulations originate in the fight to prevent drinking and driving and to ward off underage patrons who may take advantage of happy hour deals. Though, they also make it illegal to have two-for-one drink specials when restaurants are fully allowed to dictate prices and sell half-priced drinks.

Wood says he sees no connection between such safety issues and restrictions on advertising language. “Virginia also has a silly law that says you can only advertise a half-price drink but not … two-for-one drink [offers],” he said.

If a restaurant or other place of business were to violate these rules by posting a sign for happy hour in the window or letting a customer have a happy hour price outside of regulation hours, the fine is $500 and a liquor license suspension for one week. The matter would make it tough for any bar regardless of the amount of business coming through the door to attract or retain patrons.

State officials have not responded to the recently-filed lawsuit, but typically will within 30 to 60 days, according to Wood.

“The First Amendment claim is really straightforward,” Wood said. “Courts have long recognized there is no vice exception to the First Amendment.”

Mike Thompson, chairman and president of the Thomas Jefferson Institute for Public Policy, sees the lawsuit as another reason that ABC stores in Virginia should be privatized.

“It’s another example of nanny-state interference in what normal life is about,” Thompson said.” He added, “ABC stores shouldn’t be controlled by the state in the first place.”

He also questions whether the state can further become involved in the regulation of advertised prices of other goods. “Where does this kind of dopey regulation stop?” Thompson said.

Denver Riggleman, the owner of Nelson County’s Silverback Distillery, weighed in on the matter saying, “It’s not only a violation of First Amendment rights, it’s a violation of common sense.” The former Virginia gubernatorial candidate has long criticized unnecessary government regulation that hinders private industry.

For Tracy, he may be on the road to a successful court case. The nation’s highest court ruled decades ago on a similar matter.

In 1976, the Supreme Court ruled on a case involving advertised pharmaceutical prices by answering the question that if a statutory ban on advertising prescription drug prices by licensed pharmacists is a violation of “commercial speech” under the First Amendment.  In Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., the court ruled by a 7-1 opinion that the First Amendment protects willing speakers and willing listeners equally.

According to Oyez, when it comes to price advertising, thus being deemed commercial speech, the First Amendment freedom of speech protections apply to corporations and businesses. “Even speech that is sold for profit, or involves financial solicitations, is protected. The Court concluded that although the Virginia State Board of Pharmacy has a legitimate interest in preserving professionalism among its members, it may not do so at the expense of public knowledge about lawful competitive pricing terms.”

In his concurring opinion, Justice Potter Stewart said, “The First Amendment protects the advertisement because of the ‘information of potential interest and value’ conveyed, rather than because of any direct combination to to interchange of ideas…serves to promote the once facet of commercial price and product advertising that warrants First Amendment protection – its contribution to the flow to accurate and reliable information relevant to public and private decision making.”

Jurisprudence states that commercial speech, while it can be regulated in some extreme cases, is protected under the First Amendment. Although Justice William Rhenquist believes the amendment serves as, “primarily an instrument to enlighten public decision making in democracy,” the nature of commercialism in certain speech does not deem it to be necessary to be regulated by the government.

Judging that happy hour advertisements do not strictly solicit patrons, but merely informs them, two-for-one “Wine Wednesdays,” may be coming to restaurants in the Washington, D.C. area.