GJJM ENTERPRISES, LLC v. CITY OF ATLANTIC CITY et al
Filing
61
MEMORANDUM OPINION AND ORDER granting 44 Plaintiff's Motion for Summary Judgment; denying 50 State Defendants' cross-motion Motion for Summary Judgment. The parties are directed to provide the Court with a proposed permanent injunction striking the language of the statue that reads, "or advertise outside or inside the premises" to reflect this Court's decisions. Signed by Judge Joseph H. Rodriguez on 11/19/2018. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
GJJM ENTERPRISES, LLC,
d/b/a STILETTO,
:
:
Plaintiff,
v.
Hon. Joseph H. Rodriguez
Civil Action No. 17-2492
:
CITY OF ATLANTIC CITY, CITY OF
: MEMORANDUM OPINION
ATLANTIC CITY POLICE DEPARTMENT,
& ORDER
HENRY WHITE, Chief, Atlantic City
:
Police Department, 1 CHRISTOPHER
PORRINO, New Jersey Attorney General, :
NEW JERSEY DIVISION OF ALCOHOLIC
BEVERAGE CONTROL, DAVID P. RIBLE, :
Director of New Jersey Division of Alcoholic
Beverage Control,
:
Defendants.
:
In this motion, Plaintiff GJJM Enterprises, LLC d/b/a Stiletto
(“GJJM”) challenges the constitutionality of New Jersey’s ban on “BYOB”
advertising and seeks declaratory and injunctive relief claiming that N.J.
Stat. Ann. § 2C:33-27(a)(2) violates its First Amendment rights and that the
government should be enjoined from enforcing the ban.
Plaintiff GJJM voluntarily dismissed the claims against the Atlantic City
Police Department and its Chief of Police as duplicative of those against the
City. [Doc. 22.] In addition, this Court dismissed the claims against Atlantic
City by Opinion and Order dated December 17, 2017. [Docs. 40, 41.]
Further, GJJM did not object to dismissal of its request for monetary
damages. [Civil Action No. 17-6879, Doc. 14.]
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Cross-motions for summary judgment are now before the Court. Oral
argument on the motions was held September 19, 2018, and the record of
that proceeding is incorporated here. For the reasons stated during oral
argument, as well as those articulated below, the Court will grant Plaintiff’s
motion for summary judgment, as the Court finds the State’s BYOB
advertising ban unconstitutional. Accordingly, the State Defendants’ crossmotion for summary judgment will be denied. The parties are directed to
provide the Court with a proposed permanent injunction to reflect these
proceedings.
Background
GJJM operates a nightlife destination called Stiletto (“the Club”)
adjacent to the Atlantic City boardwalk. The Club features non-alcoholic
beverages and live entertainment and frequently hosts tourists, convention
groups, and bachelor parties. As a service to its customers, GJJM permits
its clientele to bring their own beer and wine (“BYOB”) to consume at the
Club; it does not allow customers consume liquor or mixed drinks in the
Club. GJJM contends that the fear of prosecution under New Jersey’s ban
on BYOB advertising has prevented it from notifying its clients–either
through radio, print, television, and online ads or by exterior or interior
signage–that they are permitted to bring their own beer or wine to the Club.
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New Jersey Law
Section 2C:33-27 of the New Jersey Statutes governs the consumption
of alcohol at restaurants that do not have a license to sell alcoholic
beverages. It provides, in pertinent part:
a. No person who owns or operates a restaurant, dining room or
other public place where food or liquid refreshments are sold or
served to the general public, and for which premises a license or
permit authorizing the sale of alcoholic beverages for onpremises consumption has not been issued:
(1) Shall allow the consumption of alcoholic beverages,
other than wine or a malt alcoholic beverage, in a portion of the
premises which is open to the public; or
(2) Shall charge any admission fee or cover, corkage or
service charge or advertise inside or outside of such premises
that patrons may bring and consume their own wine or malt
alcoholic beverages in a portion of the premises which is open
to the public.
(3) Shall allow the consumption of wine or malt alcoholic
beverages at times or by persons to whom the service or
consumption or alcoholic beverages on licensed premises is
prohibited by State or municipal law or regulation.
*
*
*
c. A person who violates any provision of this act is a disorderly
person, and the court, in addition to the sentence imposed for
the disorderly person violation, may by its judgment bar the
owner or operator from allowing consumption of wine or malt
alcoholic beverages in his premises as authorized by this act.
N.J. Stat. Ann. § 2C:33-27.
Under the statute, patrons may bring their own beer and wine to the
restaurant, but may not bring outside liquor. 2C:33-27(a)(1). The
restaurant may not, however, advertise–either inside or outside the
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establishment–that patrons are permitted to bring their own alcoholic
beverages. 2C:33-27 (a)(2). As a result, restaurants are prohibited from
notifying customers that their establishments are BYOB, even though it is
lawful for patrons to bring and consume their own beer or wine on the
premises. Individuals who advertise that customers may BYOB to their
restaurants face prosecution as disorderly persons. 2C:33-27(c). In
addition, courts may prohibit individuals who violate the advertising ban
from permitting the consumption of BYOB beverages at their restaurants.
Id.
Nature of the Claim
GJJM’s Constitutional claim is governed by Title 42 U.S.C. § 1983,
which provides a civil remedy against any person who, under color of state
law, deprives another of rights protected by the United States Constitution.
See Collins v. City of Harker Heights, 503 U.S. 115, 120 (1992). Any analysis
of 42 U.S.C. § 1983 begins with the language of the statute:
Every person who, under color of any statute, ordinance, regulation,
custom, or usage, of any State or Territory or the District of Columbia,
subjects, or causes to be subjected, any citizen of the United States or
other person within the jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the Constitution and laws,
shall be liable to the party injured in an action at law, suit in equity, or
other proper proceeding for redress.
See 42 U.S.C. § 1983.
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As the above language makes clear, Section 1983 is a remedial statute
designed to redress deprivations of rights secured by the Constitution and
its subordinate federal laws. See Baker v. McCollan, 443 U.S. 137, 145 n.3
(1979). By its own words, therefore, Section 1983 “does not . . . create
substantive rights.” Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir.
2006) (citing Baker, 443 U.S. at 145, n.3).
To state a cognizable claim under Section 1983, a plaintiff must allege
a “deprivation of a constitutional right and that the constitutional
deprivation was caused by a person acting under the color of state law.”
Phillips v. County of Allegheny, 515 F.3d 224, 235 (3d Cir. 2008) (citing
Kneipp v. Tedder, 95 F.3d 1199, 1204 (3d Cir. 1996)). Thus, a plaintiff must
demonstrate two essential elements to maintain a claim under § 1983: (1)
that the plaintiff was deprived of a “right or privileges secured by the
Constitution or the laws of the United States” and (2) that plaintiff was
deprived of his rights by a person acting under the color of state law.
Williams v. Borough of West Chester, Pa., 891 F.2d 458, 464 (3d Cir. 1989).
The First Amendment, applicable to the States through the
Fourteenth Amendment, prohibits the enactment of laws “abridging the
freedom of speech.” U.S. Const. Amend. I. As such, a government, including
a municipal government vested with State authority, “has no power to
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restrict expression because of its message, its ideas, its subject matter, or its
content.” Police Dept. of Chicago v. Mosley, 408 U.S. 92, 95 (1972).
Discussion
New Jersey’s statutory ban on BYOB advertising places a contentbased restriction on speech that fails strict scrutiny because it is not
supported by a compelling government interest nor is it the least restrictive
means of achieving the government’s stated purpose. “Content-based laws–
those that target speech based on its communicative content—are
presumptively unconstitutional and may be justified only if the government
proves that they are narrowly tailored to serve compelling state interests.”
Reed v. Town of Gilbert, Ariz., --- U.S. ---, 135 S. Ct. 2218, 2226 (2015)
(citing R.A.V. v. St. Paul, 505 U.S. 377, 395 (1992)). “Commercial speech is
no exception.” Sorrell v. IMS Health, Inc., 564 U.S. 552, 566 (2011) (where
Supreme Court applied heightened “strict scrutiny” standard to cases of
commercial speech). In Reed, the Supreme Court struck down a sign
ordinance which included various exceptions and variable standards
depending on whether the sign was political, elections-oriented, or bore
some other non-commercial message. The Court found that the ordinance
was content-based “because of the topic discussed or the idea or message
expressed” and therefore subject to strict scrutiny. 135 S. Ct. at 2227.
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The Court previously held that “when a State entirely prohibits the
dissemination of truthful, nonmisleading commercial messages for reasons
unrelated to the preservation of a fair bargaining process,” its law would be
subject to “rigorous review.” In 44 Liquor Mart, Inc. v. Rhode Island, 517
U.S. 484, 501 (1996), the Supreme Court found a statutory prohibition
against advertisements that provided the public with accurate information
about retail prices of alcoholic beverages unconstitutional. The Court struck
down a Rhode Island statute that prohibited “‘advertising in any manner
whatsoever’ the price of any alcoholic beverage offered for sale in the State;
the only exception [was] for price tags or signs displayed with the
merchandise within licensed premises and not visible from the street.” Id.
at 489. In justifying the implementation of strict scrutiny for content-based
bans, the Court stated, “[o]ur commercial speech cases have recognized the
dangers that attend governmental attempts to single out certain messages
for suppression.” Id. at 501. “[T]hey all but foreclose alternative means of
disseminating certain information.” Id.
As in Reed, here the BYOB advertising ban “‘on its face’ draws
distinctions based on the message the speaker conveys.” Reed, 135 S. Ct. at
2227 (citing Sorrell, 564 U.S. 564-66). The ban is therefore presumptively
unconstitutional and subject to strict scrutiny. Further, as admonished in
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44 Liquormart, the ban “fail[s] to leave open ‘satisfactory’ alternative
channels of communication.” 44 Liquormart, 517 U.S. at 502 (citations
omitted). Rather, it provides a complete ban on truthful, nonmisleading
commercial speech about a lawful product.
The State Defendants presented no compelling government interest
for banning BYOB advertising, while permitting liquor stores and
restaurants with liquor licenses to advertise on-site alcohol sales. 2 The
State, relying on the Twenty-first Amendment, argues that it has a strong
interest in regulating alcoholic beverages to protect the health, safety, and
welfare of the people of the State through the promotion of temperance.
The Supreme Court has made clear, however, specifically with respect to
the advertisement of alcoholic beverages, that banning speech is different
from and more intrusive than banning conduct. See 44 Liquormart, 517
U.S. at 511-12 (“it is no answer that commercial speech concerns products
and services that the government may freely regulate”). See also Players
Int’l, Inc. v. United States, 988 F. Supp. 497 (D.N.J. 1997) (distinguishing
As discussed during oral argument, an establishment’s BYOB status often
is well-known and even highlighted by magazine dining guides and online
crowd-sourced review forums. Only the owner or operator of the
establishment is restricted concerning such speech.
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government’s ability to regulate activities from constraints on speech
regarding the activity).
Alternatively, even if the BYOB advertising ban is merely considered
commercial speech, defined as “expression related solely to economic
interests of the speaker and its audience,” Central Hudson Gas & Elec. v.
Public Serv. Comm’n, 447 U.S. 557 (1980), it fails intermediate scrutiny. 3
Under the Central Hudson test, a court first inquires whether the
commercial speech at issue concerns a lawful activity and is not misleading;
if not, it is without First Amendment protection entirely. Central Hudson,
447 U.S. at 566. The remainder of the test allows the government to
regulate nonmisleading commercial speech concerning a lawful activity
where: it asserts a substantial interest in regulating the speech; the
regulation directly advances the governmental interest asserted; and the
regulation is not more extensive than necessary to serve that interest. Id.
In Central Hudson, a state public utility commission completely
banned promotional advertising by an electric utility. The Supreme Court
determined that the expression regulated was commercial speech that
should enjoy First Amendment protection to protect the fact that it
Notably, however, the Supreme Court has applied the heightened strict
scrutiny standard to cases of commercial speech. See Sorrell, 564 U.S. 552.
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informed society, and the utility company’s message promoting the use of
electricity was not misleading or illegal. Additionally, the government had a
substantial interest in conserving energy and preserving a fair rate
structure and the ban on promotional advertising directly advanced those
interests. However, the Court found that the complete ban was not
narrowly tailored to address the impact of whether the promotional
advertising at issue had any impact on the government’s interest in energy
conservation. Therefore, the Court held that the commission’s ban violated
the First Amendment Id.
Subsequently, a unanimous Supreme Court ruled that a federal law
prohibiting the disclosure of the alcohol content of beer on labels failed the
Central Hudson test’s requirement that the regulation directly advance the
government interest. Rubin v. Coors Brewing Co., 514 U.S. 476 (1995).
While federal law prohibited the disclosure of alcohol content on labels
unless required by state law, disclosure of alcohol content in advertising
applied only in 18 states that affirmatively prohibited it. Producers were
permitted to disclose alcohol content in advertising in much of the country,
presumably advancing competition for business based on higher alcohol
content. The Court determined that curbing the advertising of alcohol
content of beers would be a better way of coping with strength wars than
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regulating labels, so the regulation at issue did not directly advance the
governmental interest asserted. The Court determined that the federal law
prohibiting disclosing alcohol strength on labels was not sufficiently
narrowly tailored to the government’s goal; that is, the government could
directly limit the alcohol content of beer instead. Id.
New Jersey’s ban on BYOB advertising raises similar concerns.
Justice Stevens, writing for the plurality in 44 Liquormart, cautioned that
the Central Hudson test should be applied with “special care,” as blanket
bans on commercial speech have historically been disfavored by the Court
and, when unrelated to consumer protection, rarely survive constitutional
review. 517 U.S. at 500, 504. Allowing BYOB advertising would concern a
lawful activity and not be misleading. The State has neither asserted a
substantial interest in regulating the speech at issue, nor shown that the
regulation directly advances the governmental interest asserted, and is not
more extensive than necessary to serve that interest.
This Court, in an Opinion dated December 21, 2017, granted Plaintiff
a preliminary injunction maintaining the status quo. The Court required
the parties continue to act as they had, namely, the Defendants would not
enforce the statute and Plaintiff would not advertise before the Court
determined, on the merits, whether the statute is unconstitutional. The
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parties have agreed that facts have not changed since this Court issued the
preliminary injunction enjoining the State Defendants from taking any
actions to enforce the statutory provisions that prohibit establishments
from advertising that patrons may bring their own beverages to consume
on the premises. The State has not identified a governmental interest for its
statutory ban on BYOB advertising and has failed to present a different
argument against this Court’s determination at the preliminary injunction
stage.
There is no dispute that the State has an interest in regulating
alcoholic beverages to protect the health, safety, and welfare of its people,
or that the State has the authority to regulate conduct in the alcoholic
beverage industry through its Division of Alcoholic Beverage Control
(“ABC”) under the authority of the Attorney General. As noted during oral
argument, BYOB establishments must comply with ABC regulations as
authorized by the statute at issue, which provides that no owner or operator
of a BYOB establishment “[s]hall allow the consumption of wine or malt
alcoholic beverages at times or by persons to whom the service or
consumption or alcoholic beverages on licensed premises is prohibited by
State or municipal law or regulation.” N.J. Stat. Ann. § 2C:33-27(a)(3). A
BYOB owner or operator who violates the regulations is a disorderly person
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and may be barred from operating the premises as a BYOB. Id. at § 2C:3327(c). While the State may, and does, regulate conduct regarding alcoholic
beverages, it has not shown that regulating the speech concerning that
conduct furthers a governmental interest sufficient to override the
constitutional rights at stake in this case.
Conclusion
For these reasons as well as those stated during the September 19,
2018 oral argument on the cross-motions for summary judgment, this
Court finds the State’s BYOB advertising ban – specifically, the language of
the statue that reads “or advertise outside or inside the premises” – to be
unconstitutional. Accordingly,
IT IS ORDERED this 19th day of November, 2018 that Plaintiff’s
motion for summary judgment [Doc. 44] is hereby GRANTED.
IT IS FURTHER ORDERED that the State Defendants’ cross-motion
for summary judgment [Doc. 50] is hereby DENIED.
The parties are directed to provide the Court with a proposed
permanent injunction striking the language of the statue that reads, “or
advertise outside or inside the premises” to reflect this Court’s decisions.
/s/ Joseph H. Rodriguez
JOSEPH H. RODRIGUEZ
U.S.D.J.
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