GJJM ENTERPRISES, LLC v. CITY OF ATLANTIC CITY et al, No. 1:2017cv02492 - Document 61 (D.N.J. 2018)
Court Description: 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, )
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GJJM ENTERPRISES, LLC v. CITY OF ATLANTIC CITY et al Doc. 61 UNITED STATES DISTRICT COURT DISTRICT OF NEW J ERSEY GJ J M ENTERPRISES, LLC, d/ b/ a STILETTO, Plaintiff, v. : Hon. J oseph 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 Departm ent, 1 CHRISTOPHER PORRINO, New J ersey Attorney General, : NEW J ERSEY DIVISION OF ALCOHOLIC BEVERAGE CONTROL, DAVID P. RIBLE, : Director of New J ersey Division of Alcoholic Beverage Control, : Defendants. : In this m otion, Plaintiff GJ J M Enterprises, LLC d/ b/ a Stiletto (“GJ J M”) challenges the constitutionality of New J ersey’s ban on “BYOB” advertising and seeks declaratory and injunctive relief claim ing that N.J . Stat. Ann. § 2C:33-27(a)(2) violates its First Am endment rights and that the governm ent should be enjoined from enforcing the ban. Plaintiff GJ J M voluntarily dism issed the claim s against the Atlantic City Police Departm ent and its Chief of Police as duplicative of those against the City. [Doc. 22.] In addition, this Court dism issed the claims against Atlantic City by Opinion and Order dated Decem ber 17, 20 17. [Docs. 40 , 41.] Further, GJ J M did not object to dism issal of its request for m onetary dam ages. [Civil Action No. 17-6879, Doc. 14.] 1 1 Dockets.Justia.com Cross-m otions for sum m ary judgm ent are now before the Court. Oral argument on the motions was held Septem ber 19, 20 18, 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 m otion for sum m ary judgment, as the Court finds the State’s BYOB advertising ban unconstitutional. Accordingly, the State Defendants’ crossm otion for sum m ary judgment will be denied. The parties are directed to provide the Court with a proposed perm anent injunction to reflect these proceedings. Background GJ J M 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 custom ers, GJ J M perm its its clientele to bring their own beer and wine (“BYOB”) to consum e at the Club; it does not allow custom ers consum e liquor or m ixed drinks in the Club. GJ J M contends that the fear of prosecution under New J ersey’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 perm itted to bring their own beer or wine to the Club. 2 New J ersey Law Section 2C:33-27 of the New J ersey Statutes governs the consum ption 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 prem ises a license or perm it authorizing the sale of alcoholic beverages for onprem ises consum ption has not been issued: (1) Shall allow the consum ption of alcoholic beverages, other than wine or a m alt alcoholic beverage, in a portion of the prem ises which is open to the public; or (2) Shall charge any adm ission fee or cover, corkage or service charge or advertise inside or outside of such prem ises that patrons m ay bring and consume their own wine or m alt alcoholic beverages in a portion of the prem ises which is open to the public. (3) Shall allow the consum ption of wine or m alt alcoholic beverages at tim es or by persons to whom the service or consum ption or alcoholic beverages on licensed prem ises is prohibited by State or m unicipal 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 im posed for the disorderly person violation, m ay by its judgment bar the owner or operator from allowing consum ption of wine or m alt alcoholic beverages in his prem ises 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 m ay not bring outside liquor. 2C:33-27(a)(1). The restaurant m ay not, however, advertise– either inside or outside the 3 establishment– that patrons are perm itted to bring their own alcoholic beverages. 2C:33-27 (a)(2). As a result, restaurants are prohibited from notifying customers that their establishm ents are BYOB, even though it is lawful for patrons to bring and consume their own beer or wine on the prem ises. Individuals who advertise that custom ers m ay BYOB to their restaurants face prosecution as disorderly persons. 2C:33-27(c). In addition, courts m ay prohibit individuals who violate the advertising ban from perm itting the consum ption of BYOB beverages at their restaurants. Id. Nature of the Claim GJ J M’s Constitutional claim is governed by Title 42 U.S.C. § 1983, which provides a civil rem edy 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, 50 3 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 Colum bia, 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 im m unities 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. 4 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. 20 0 6) (citing Baker, 443 U.S. at 145, n.3). To state a cognizable claim under Section 1983, a plaintiff m ust 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. 20 0 8) (citing Kneipp v. Tedder, 95 F.3d 1199, 120 4 (3d Cir. 1996)). Thus, a plaintiff m ust dem onstrate two essential elem ents to m aintain 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. William s v. Borough of West Chester, Pa., 891 F.2d 458, 464 (3d Cir. 1989). The First Am endment, applicable to the States through the Fourteenth Am endm ent, prohibits the enactm ent of laws “abridging the freedom of speech.” U.S. Const. Amend. I. As such, a governm ent, including a m unicipal governm ent vested with State authority, “has no power to 5 restrict expression because of its m essage, its ideas, its subject m atter, or its content.” Police Dept. of Chicago v. Mosley, 40 8 U.S. 92, 95 (1972). Discussion New J ersey’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 m eans of achieving the government’s stated purpose. “Content-based laws– those that target speech based on its com m unicative content—are presum ptively unconstitutional and m ay 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 (20 15) (citing R.A.V. v. St. Paul, 50 5 U.S. 377, 395 (1992)). “Comm ercial speech is no exception.” Sorrell v. IMS Health, Inc., 564 U.S. 552, 566 (20 11) (where Suprem e Court applied heightened “strict scrutiny” standard to cases of com m ercial speech). In Reed, the Suprem e 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-com m ercial 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. 6 The Court previously held that “when a State entirely prohibits the dissem ination of truthful, nonm isleading com mercial m essages 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, 50 1 (1996), the Suprem e Court found a statutory prohibition against advertisements that provided the public with accurate inform ation about retail prices of alcoholic beverages unconstitutional. The Court struck down a Rhode Island statute that prohibited “‘advertising in any m anner 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 m erchandise within licensed prem ises and not visible from the street.” Id. at 489. In justifying the im plementation of strict scrutiny for content-based bans, the Court stated, “[o]ur com mercial speech cases have recognized the dangers that attend governm ental attem pts to single out certain m essages for suppression.” Id. at 50 1. “[T]hey all but foreclose alternative m eans of dissem inating certain inform ation.” Id. As in Reed, here the BYOB advertising ban “‘on its face’ draws distinctions based on the m essage 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 adm onished in 7 44 Liquorm art, the ban “fail[s] to leave open ‘satisfactory’ alternative channels of comm unication.” 44 Liquorm art, 517 U.S. at 50 2 (citations om itted). Rather, it provides a com plete ban on truthful, nonm isleading com m ercial speech about a lawful product. The State Defendants presented no com pelling governm ent interest for banning BYOB advertising, while perm itting liquor stores and restaurants with liquor licenses to advertise on-site alcohol sales. 2 The State, relying on the Twenty-first Am endm ent, 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 prom otion of tem perance. The Supreme Court has m ade clear, however, specifically with respect to the advertisement of alcoholic beverages, that banning speech is different from and m ore intrusive than banning conduct. See 44 Liquorm art, 517 U.S. at 511-12 (“it is no answer that com m ercial speech concerns products and services that the government m ay freely regulate”). See also Players Int’l, Inc. v. United States, 988 F. Supp. 497 (D.N.J . 1997) (distinguishing 2 As discussed during oral argum ent, an establishment’s BYOB status often is well-known and even highlighted by m agazine dining guides and online crowd-sourced review forum s. Only the owner or operator of the establishment is restricted concerning such speech. 8 governm ent’s ability to regulate activities from constraints on speech regarding the activity). Alternatively, even if the BYOB advertising ban is merely considered com m ercial speech, defined as “expression related solely to econom ic interests of the speaker and its audience,” Central Hudson Gas & Elec. v. Public Serv. Com m’n, 447 U.S. 557 (1980 ), it fails interm ediate scrutiny. 3 Under the Central Hudson test, a court first inquires whether the com m ercial speech at issue concerns a lawful activity and is not m isleading; if not, it is without First Am endment protection entirely. Central Hudson, 447 U.S. at 566. The remainder of the test allows the governm ent to regulate nonm isleading com m ercial speech concerning a lawful activity where: it asserts a substantial interest in regulating the speech; the regulation directly advances the governm ental interest asserted; and the regulation is not more extensive than necessary to serve that interest. Id. In Central Hudson, a state public utility com m ission com pletely banned prom otional advertising by an electric utility. The Suprem e Court determ ined that the expression regulated was com mercial speech that should enjoy First Am endm ent protection to protect the fact that it Notably, however, the Supreme Court has applied the heightened strict scrutiny standard to cases of com mercial speech. See Sorrell, 564 U.S. 552. 3 9 inform ed society, and the utility com pany’s message prom oting the use of electricity was not m isleading or illegal. Additionally, the governm ent had a substantial interest in conserving energy and preserving a fair rate structure and the ban on prom otional advertising directly advanced those interests. However, the Court found that the com plete ban was not narrowly tailored to address the impact of whether the prom otional advertising at issue had any im pact on the government’s interest in energy conservation. Therefore, the Court held that the com m ission’s ban violated the First Am endment Id. Subsequently, a unanim ous Suprem e 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 governm ent 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 affirm atively prohibited it. Producers were perm itted to disclose alcohol content in advertising in m uch of the country, presum ably advancing com petition for business based on higher alcohol content. The Court determ ined that curbing the advertising of alcohol content of beers would be a better way of coping with strength wars than 10 regulating labels, so the regulation at issue did not directly advance the governm ental interest asserted. The Court determ ined 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 lim it the alcohol content of beer instead. Id. New J ersey’s ban on BYOB advertising raises sim ilar concerns. J ustice Stevens, writing for the plurality in 44 Liquorm art, cautioned that the Central Hudson test should be applied with “special care,” as blanket bans on com mercial speech have historically been disfavored by the Court and, when unrelated to consum er protection, rarely survive constitutional review. 517 U.S. at 50 0 , 50 4. Allowing BYOB advertising would concern a lawful activity and not be m isleading. The State has neither asserted a substantial interest in regulating the speech at issue, nor shown that the regulation directly advances the governm ental interest asserted, and is not m ore extensive than necessary to serve that interest. This Court, in an Opinion dated Decem ber 21, 20 17, granted Plaintiff a prelim inary injunction m aintaining the status quo. The Court required the parties continue to act as they had, nam ely, the Defendants would not enforce the statute and Plaintiff would not advertise before the Court determ ined, on the m erits, whether the statute is unconstitutional. The 11 parties have agreed that facts have not changed since this Court issued the prelim inary injunction enjoining the State Defendants from taking any actions to enforce the statutory provisions that prohibit establishments from advertising that patrons m ay bring their own beverages to consum e on the prem ises. The State has not identified a governm ental interest for its statutory ban on BYOB advertising and has failed to present a different argument against this Court’s determ ination 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 m ust com ply with ABC regulations as authorized by the statute at issue, which provides that no owner or operator of a BYOB establishm ent “[s]hall allow the consum ption of wine or m alt alcoholic beverages at tim es or by persons to whom the service or consum ption or alcoholic beverages on licensed prem ises is prohibited by State or m unicipal 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 12 and m ay be barred from operating the prem ises as a BYOB. Id. at § 2C:3327(c). While the State m ay, and does, regulate conduct regarding alcoholic beverages, it has not shown that regulating the speech concerning that conduct furthers a governm ental interest sufficient to override the constitutional rights at stake in this case. Conclusion For these reasons as well as those stated during the Septem ber 19, 20 18 oral argument on the cross-m otions for summ ary judgm ent, this Court finds the State’s BYOB advertising ban – specifically, the language of the statue that reads “or advertise outside or inside the prem ises” – to be unconstitutional. Accordingly, IT IS ORDERED this 19th day of Novem ber, 20 18 that Plaintiff’s m otion for sum m ary judgment [Doc. 44] is hereby GRANTED. IT IS FURTHER ORDERED that the State Defendants’ cross-m otion for sum m ary 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 prem ises” to reflect this Court’s decisions. / s/ J oseph H. Rodriguez J OSEPH H. RODRIGUEZ U.S.D.J . 13
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