For those of us who lament how most restaurants in New York City can offer beer and wine with food, unlike New Jersey, there’s a certain satisfaction in knowing that most New Jersey restaurants without liquor licenses allow beer and wine to be brought in as “BYOB,” or “Bring Your Own Bottle.” A lot less expensive, to be sure.
Only problem was, until recently it was actually illegal for New Jersey restaurants to advertise availability of BYOB. N.J.S.A. 2C:33-27(a)(2) prohibits restaurants from advertising that patrons are permitted to bring their own alcoholic beverages either inside or outside the establishment. It’s one of those laws that was long past its due date, like N.J.S.A. 51:1-13 (requiring burning a brand into a wooden container of butter or cheese) or N.J.S.A. 33-1-2 (limiting driving from out-of-state with more than one gallon of wine or 12 quarts of beer or two quarts of other liquor into the state). The law was not only frequently honored in the breach on restaurant websites and elsewhere, but you could always find any number of lists of the state’s BYOB restaurants on Yelp, Google or Trip Advisor.
But as every lawyer should know, government restrictions on speech, even for truthful commercial speech, are protected by the First Amendment. And so in GJJM Ent, LLC, d/b/a Stiletto v. City of Atlantic City et al. (Civ. Action 17-2492 November 19, 2018), U.S. District Court Judge Joseph H. Rodriguez struck down the state’s prohibition against advertising BYOB as an unconstitutional infringement of First Amendment rights.
Plaintiff, a club adjacent to the Atlantic City Boardwalk, contended that its fear of prosecution under New Jersey’s ban on BYOB advertising 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. Judge Rodriguez first analyzed the ban as a pure state restriction on speech under Section 1983 and then also under the commercial speech framework set out in Central Hudson Gas & Elec. v. Public Serv. Comm’n, 447 U.S. 557 (1980). He ruled that the BYOB advertising ban “on its face” draws distinctions based on the message the speaker conveys and is therefore subject to strict scrutiny and is presumptively unconstitutional. Further, he cited the U.S. Supreme Court’s admonition in Liquor Mart, Inc. v. Rhode Island, 517 U.S. 484, 501 (1996) (overturning a ban on publishing comparative liquor prices), in declaring that by failing “to leave open ‘satisfactory’ alternative channels of communication,” the statute provides a complete ban on truthful, non-misleading commercial speech about a lawful product.
The state presented no compelling government interest for banning BYOB advertising—while permitting liquor stores and restaurants with liquor licenses to advertise on-site alcohol sales—and instead simply insisted that under the 21st Amendment, 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. Seriously? Judge Rodriguez’s Central Hudson analysis was also unyielding because again, the state had little of substance to say in the statute’s defense, neither asserting a substantial interest in regulating the speech at issue, nor showing that the regulation directly advances the governmental interest asserted while not more extensive than necessary to serve that interest.
One might wonder why the state defended the statute at all, except that the answer is not hard to fathom: New Jersey’s archaic system of strict limitation on the availability of restaurant liquor licenses has created a powerful vested interest in those who own them and the distributors who supply them. They fear any competition that would lessen the value their asset gains from government-created scarcity. As is often the case in such matters, their representatives are a powerful, effective voice in favor of the status quo before both the Legislature and the Division of Alcoholic Beverage Control.
It is hopefully just a matter of time before the state’s outmoded and monopolistic system of liquor regulation goes the way of taxi medallions did in the face of competition from Uber and Lyft. In the meantime, it is still difficult for many premium out-of-state wineries to sell to New Jersey residents for even a “wine of the month” club, and as for buying in supermarkets or bulk stores, don’t hold your breath.
At least now, your favorite BYOB can advertise the fact that you can bring your wine or beer and enjoy them while eating dinner for half the markup charged by restaurants with liquor licenses. Drink up (but don’t drive!)