Retail Digital Network v. Appelsmith, No. 13-56069 (9th Cir. 2016)
Annotate this CaseRDN filed suit challenging the constitutionality of California Business and Professions Code Section 25503(f)–(h), which forbids manufacturers and wholesalers of alcoholic beverages from giving anything of value to retailers for advertising their alcoholic products. Sorrell v. IMS Health, Inc., requires heightened judicial scrutiny of content-based restrictions on non-misleading commercial speech regarding lawful products, rather than the intermediate scrutiny applied to section 25503 in Actmedia, Inc. v. Stroh. Accordingly, the court concluded that Actmedia is clearly irreconcilable with Sorrell. The court therefore reversed the district court's grant of summary judgment to the State and remanded on an open record for the district court to apply heightened judicial scrutiny in the first instance.
Court Description: Civil Rights. The panel reversed the district court’s summary judgment in favor of the Director of the California Department of Alcoholic Beverage Control, and remanded in an action in which plaintiff challenged, on First Amendment grounds, California Business and Professions Code Section 25503(f)–(h), which forbids manufacturers and wholesalers of alcoholic beverages from giving anything of value to retailers for advertising their alcoholic products. The panel first held that plaintiff Retail Digital Network, a middleman involved in the advertising industry, had standing to challenge section 25503. The panel held that the Supreme Court’s opinion in Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), requires heightened judicial scrutiny of content-based restrictions on non-misleading commercial speech regarding lawful products, rather than the intermediate scrutiny previously applied to section 25503 by the Ninth Circuit in Actmedia, Inc. v. Stroh, 830 F.2d 957 (9th Cir. 1986). The panel held that Actmedia was clearly irreconcilable with the Supreme Court’s intervening decision in Sorrell. The panel therefore reversed the district court’s summary judgment, which had found Actmedia to be controlling, and remanded on an open record for the district court to apply heightened judicial scrutiny in the first instance. RETAIL DIGITAL NETWORK V. APPELSMITH 3
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