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Liquor Authority. The Second Circuit reversed a lower court's denial of plaintiff brewerÕs application for state approval of an allegedly indecent caricature on its beer labels. The circuit panel performed a thorough Central Hudson analysis, holding that the state ban was ineffective, considering the "wide currency of vulgar displays throughout contemporary society," and also that the ban could not meet either Part 3 or Part 4 of Central Hudson.

Eller Media Co. v. City of Oakland. Here, the federal district court denied a preliminary injunction sought to bar enforcement of an ordinance restricting the placement of off-site alcohol beverage and tobacco ads. The injunction was sought solely for alcohol beverage advertising.

The court held that the plaintiffs had not met the relevant tests for preliminary injunctions, and rejected the argument that the local ordinance had been preempted by the California state alcohol beverage regulatory regime. The court made a preliminary commercial speech analysis and held that 44 Liquormart was distinguishable because this was not a "blanket ban," and was "not unrelated to consumer protection" -- a distinction impossible to understand under 44 Liquormart or any other Supreme Court cases.

Citing the Baltimore billboard cases, the district court relied for evidence entirely on the city's own preamble, and held that it was unlikely that the plaintiffs would succeed in their arguments that the ordinance would fail both Parts 3 and 4 of the Central Hudson test.

There were other significant commercial speech decisions rendered in 1998. For example:

Pearson v. Edgar. The Seventh Circuit affirmed a district court decision holding that an Illinois statute prohibiting real estate brokers from soliciting homeowners to list or sell their homes if the owner provided notice of a desire not to be solicited was an impermissible restriction on commercial speech. The court found that the statute would not be effective under Part 3, and would be underinclusive under Part 4 of the Central Hudson test.

United Reporting Publishing Corp. v. California Highway Patrol. The Ninth Circuit struck down application to a commercial information service of a state statute prohibiting law enforcement agencies from releasing the addresses of arrested persons for commercial purposes.

The statute exempted a variety of other purposes eligible to receive the information, including "scholarly, journalistic, political, ... governmental ... investigative purposes." The court first observed that the Supreme Court, based on the several opinions in 44 Liquormart, was apparently giving consideration to applying strict scrutiny or at least further enhancing the Central Hudson test.

The Court held, however, that this case could be decided simply by applying the Central Hudson test as already enhanced by the Court. The Ninth Circuit held that the government defendants had provided no evidence of direct and material advancement under Central Hudson Part 3, based largely on the Rubin analysis of statutes similarly riddled with exemptions.

1999. The New Year.

The seeds were sown last year, as discussed above. Pivotal to commercial speech developments this year will be the action of the Supreme Court in GNOBA. The Court granted certiorari on Jan. 15, 1999, and established an accelerated briefing schedule. The brief of the solicitor general is to filed on or before Feb. 25, the brief of respondent on or before March 24, and the reply brief on or before April 12. This virtually ensures that oral argument will be heard in GNOBA and an opinion issued before the end of the term.

Not only will the Court resolve the conflict between the Fifth and Ninth Circuits -- GNOBA and Valley Broadcasting -- the case presents a unique opportunity for the Court to provide even clearer guidance about the government's burden of proof in supporting commercial speech restrictions.

The clear message of the Court's commercial speech decisions of the 1990s has been to ratchet upward the burden under Central Hudson Part 3 ("direct and material advancementÓ" and Part 4 ("no more extensive than necessary"), and a requirement that "reasonable and obvious" alternatives to speech restriction be chosen.

Indeed, GNOBA provides an opportunity for the Supreme Court to continue the apparent debate reflected in the opinions in 44 Liquormart as to whether the Central Hudson test remains a viable vehicle, or whether the Court would consider adopting either Justice Thomas's suggestion that commercial speech receive full strict scrutiny under the First Amendment, or Justice Stevens's suggestion (also in 44 Liquormart) that stricter scrutiny be applied in all commercial speech cases, except for those that involve misleading speech or other speech that undercuts the fairness of the commercial marketplace.

There will, of course, be other developments during the year. For example, argument and a decision can be expected in the Lindsey case in the Ninth Circuit, as discussed above, and in other commercial speech appeals. It is also anticipated that there will be new challenges to the still-growing number of municipal billboard restrictions against tobacco and alcohol beverage advertising.