Federal Court Strikes Down New Jersey’s BYOB Advertising Ban

New Jersey’s ban on restaurants advertising “bring your own beer” (BYOB) is unconstitutional, according to a recent federal court decision. In GJJM Enterprises v. City of Atlantic City, Judge Joseph Rodriguez of the District of New Jersey ruled that the ban “places a content-based 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.” 

NJ Law Governing BYOB

N.J.S.A. 2C:33-27governs the consumption of alcohol at restaurants without a license to sell alcoholic beverages. It provides in part: 

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 on-premises 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. 

Accordingly, the statute prohibits restaurants 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 a disorderly persons offense. 

Facts of the Case

Plaintiff GJJM Enterprises, LLC (GJJM) operates a nightclub called Stiletto (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. GJJM allows customers to bring their own beer and wine to the Club; because it does not have a liquor license, it does not allow customers to consume liquor or mixed drinks in the Club. It also may not advertise that customers can BYOB.

In 2017, GJJM sued to overturn the ban. GJJM contended that the fear of prosecution under New Jersey’s ban on BYOB advertising has prevented it from notifying its patrons–either through radio, print, television, and online ads or by signage–that they are permitted to bring their own beer or wine into the Club. 

Court’s Decision 

The court concluded that New Jersey’s ban on BYOB advertising runs afoul of the First Amendment. “The 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,” Judge Rodriguez wrote.

In reaching its decision, the court analyzed the statute under both strict and intermediate scrutiny, and concluded it passed neither standard. The court concluded that the statute should be subject to strict scrutiny, citing Reed v. Town of Gilbert, Ariz., __U.S. __, 135 S. Ct. 2218, 2226 (2015). Reedheld that “[c]ontent-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.”

Judge Rodriguez explained, “[a]s in Reed, here the BYOB advertising ban ‘on its face’ draws distinctions based on the message the speaker conveys . . . The ban is therefore presumptively unconstitutional and subject to strict scrutiny.” The court further noted that the ban does not leave any alternative channels of communication available, but completely prohibits truthful, non-misleading commercial speech about a lawful product. 

According to the court, “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.” While the court acknowledged that New Jersey has a strong interest in regulating alcoholic beverages to protect the health, safety, and welfare of its residents, it noted that the Supreme Court has made clear—specifically with respect to the advertisement of alcoholic beverages—that banning speech is different from and more intrusive than banning conduct. 

The ban also failed the more lenient commercial speech standard set forth in 44 Liquor Mart, Inc. v. Rhode Island517 U.S. 484, 501 (1996). It again found the statute unconstitutional. “Allowing BYOB advertising would concern a lawful activity and not be misleading,” Judge Rodriguez concluded. “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.” He added, “[w]hile 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.” 

Judge Rodriguezdirected the parties 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 the court’s decisions.

For more information about GJJM Enterprises v. City of Atlantic Cityor the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

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