Pennsylvania State Police, Bureau of Liquor Control Enforcement v. Hospitality Investments of Philadelphia, Inc.

OPINION OF THE COURT

PAPADAKOS, Justice.

This appeal arises from a finding by the Court of Common Pleas of Philadelphia County that Section 498 of the Pennsylvania Liquor Code, 47 P.S. § 4-498, is unconstitutional. This is an appeal as of right directly to this Court, as authorized by 42 Pa.C.S.A. § 722(7), since, under that section we have exclusive jurisdiction of appeal from final orders of courts of common pleas in cases where such a court has held any statute to be unconstitutional. For the reasons set forth below, we reverse.

Appellant, the Bureau of Liquor Control Enforcement (“Bureau”), is responsible for enforcing the Pennsylvania Liquor Code, 47 P.S. § 1-101, et seq. Appellee (hereinafter the “Licensee”) is the holder of a restaurant liquor license issued by the Pennsylvania Liquor Control Board (“Board”). In late 1989, the Bureau issued a citation against the Licensee charg*111ing a violation of Section 498 of the Liquor Code. Section 498 prohibits a licensee from advertising in any manner whatsoever the price of any malt beverage, cordial, wine or distilled liquor offered for sale in this State. A hearing relative to the citation was held before an administrative law judge and the following fact was stipulated. A bureau enforcement officer read the Licensee’s advertisement in the October 26, 1989, edition of the daily Pennsylvania paper. The advertisement stated, in part: “$1.00 Regular Drinks 9-12 midnight.” The Licensee admitted that its ad violated Section 498. The only argument that the Licensee raised was that Section 498 was unconstitutional.

The administrative law judge who heard the case found that the Licensee had violated Section 498 and she imposed a fine of $250.00 for this violation. She also found that she had no jurisdiction to address the constitutional issue. The Pennsylvania Liquor Control Board affirmed. The Licensee appealed to the Court of Common Pleas of Philadelphia County and oral argument was held on July 28, 1991. At that argument, the Licensee contended that the Bureau failed to establish that the policy behind the price advertising prohibition of Section 498 outweighed its constitutional right to commercial free speech. The trial judge accepted this argument and, by order dated July 23, 1991, granted the Licensee’s appeal and reversed the order of the Board. On June 26, 1992, the trial judge issued a one page memorandum opinion concluding that Section 498 violated the Pennsylvania Constitution. The trial judge otherwise noted that his reasoning appeared on the record.1

The Bureau appealed to the Commonwealth Court and the matter was subsequently transferred to this Court pursuant to our exclusive jurisdiction under 42 Pa.C.S.A. § 722(7), as noted above.

The Licensee herein argues that its right to commercial free speech as guaranteed under the First Amend*112ment to the United States Constitution, is set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980); Virginia Pharmacy Board v. Virginia Citizen Consumer Counsel, Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976); Pennsylvania State Board of Pharmacy v. Pastor, 441 Pa. 186, 272 A.2d 487 (1971).2 However, none of those cases involved the sale of alcohol or alcoholic beverages. The sale or consumption of alcohol or alcoholic beverages in this country is governed initially by the Twenty-First Amendment to the United States Constitution which repealed prohibition. Regulation of the sale and consumption of alcohol is left to the state under that amendment. A state has the power to ban the purchase and sale of alcoholic beverages within its borders. The manufacture, gift, purchase, sale, possession or transportation of alcoholic beverages may be prohibited. However, once having granted to its citizens the privilege of selling and buying alcoholic beverages, the state cannot impose restrictions which strangle the trade. Restrictions may be imposed so long as they bear a reasonable relation to the evil sought to be controlled.

In Tahiti Bar, Inc. Liquor License Case, 395 Pa. 355, 150 A.2d 112, appeal dismissed, 361 U.S. 85, 80 S.Ct. 159, 4 L.Ed.2d 116 (1959), this Court held that an individual has no constitutionally protected right to engage in the business of selling alcoholic beverages. Rather, the authority to sell alcoholic beverages is a privilege granted by the State. Accordingly, a state may impose conditions and limitations on that privilege. We held that regulation of the liquor business is required only to bear a reasonable relation to the evil sought to be controlled. Since an individual who accepts the privilege of holding a liquor license is deemed to consent to the conditions and restrictions attached to that license, the usual tests, still applicable in other situations and used to evaluate constitutional challenges, are not involved. See also, *113Replogle v. Commonwealth, Pa. Liquor Control Board, 514 Pa. 209, 523 A.2d 327 (1987).

It is clear here that Section 498, which prohibits price advertising of alcoholic beverages, is reasonably related to permissible goals of the legislature in the area of alcohol control. The Bureau argues, and we have no reason to doubt their contention, that Section 498, along with other sections of the Liquor Code, is intended to restrain and discourage the consumption of alcoholic beverages. This is a legitimate legislative purpose. It is reasonable to accept that banning price advertising is prima facie consonant with such a purpose. By its very nature, price advertising (typically discount price advertising) is designed to encourage consumption by promoting and increasing the sale of alcoholic beverages. A string of witnesses or statistical studies áre not needed to prove this point. In short, we find that Section 498 bears a reasonable relation to legitimate legislative goals in the area of alcohol control and since this is so, the incidental curtailment of the right of commercial free speech is justified where acquisition of a liquor license is a privilege and not a right. A careful balancing of competing interests as is usually done in free speech cases is not required.

Three United States Supreme Court cases in the area of liquor license control clinch the argument. In California v. LaRue, 409 U.S. 109, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972); New York State Liquor Authority v. Bellanca, 452 U.S. 714, 101 S.Ct. 2599, 69 L.Ed.2d 357 (1981); and City of Newport, Ky. v. Iacobucci, 479 U.S. 92, 107 S.Ct. 383, 93 L.Ed.2d 334 (1986), the United States Supreme Court was faced with a challenge to a local liquor licensing law or regulation prohibiting live sexual entertainment or nude dancing in establishments licensed to sell liquor. In each case, the court rejected the licensees’ arguments based on the free speech guarantees of the First and Fourteenth Amendments and the court did not engage in the traditional First Amendment analysis. Rather, the relevant liquor regulation was held not to be irrational (LaRue); was held to be a valid attribute of the state’s power to ban the sale of alcoholic beverages entirely *114(Bellanca); or was held to be presumptively valid (Iacobucci).

The case instantly before this Court involves a restriction on commercial speech as implicated in the enforcement of the Liquor Code and we do not intend to deprecate the importance of the constitutionally protected right to commercial speech in appropriate cases. Although neither LaRue, Bellanca nor Iacobucci involved such a restriction, the applicability of those cases to the case sub judice is most compelling because commercial speech is generally accorded less protection than other forms of expression. Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, supra. It seems unnecessary to apply a rigorous First Amendment analysis where a liquor regulation is attacked on commercial speech grounds when such an analysis has not been utilized relative to speech which is usually accorded greater protection. The United States Supreme Court has held that “the Twenty-first Amendment shields restrictions on speech from full First Amendment review.” Iacobucci, 479 U.S. at 97, 107 S.Ct. at 386.

In conclusion, upon carefully reviewing LaRue, Bellanca and Iacobucci two points stand out. First, the Twenty-First Amendment gives a state broad authority and, hence, there is an “added presumption of validity” when the state regulates in the area of liquor sales. Second, the reasonable relationship test is relevant to determining constitutionality. Constitutionally protected speech may be restricted because the law in question is related to the regulation of liquor.

Accordingly, we find Section 498 to be a valid exercise of Pennsylvania’s right to regulate the sale and consumption of alcohol. The order of the Court of Common Pleas of Philadelphia County is reversed.

FLAHERTY and CASTILLE, JJ., file a dissenting opinion. MONTEMURO, J., is sitting by designation.

. A review of the record shows that the Judge’s few remarks are inadequate and contain no reference to any section of the Pennsylvania Constitution.

. The Pennsylvania Constitution’s guarantee of free speech is involved in the Pastor decision.