Submitted April 11, 1984.Decided April 22, 1985.Released for Publication July 12, 1985.
Attorneys and Law Firms
**330*297 Hiller, Larky & Hoekenga, Daniel J. Hoekenga, Southfield, and Sinas, Dramis, Brake, Boughton, McIntyre & Reisig, P.C. by Donald L. Reisig, Lansing, for plaintiffs.
Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and John Wernet, Asst. Atty. Gen., for Atty. Gen.
Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and Frank J. Pipp and Larry F. Brya, Asst. Attys. Gen., for Mich. Liquor Control Comm'n.
Before BRONSON, P.J., and MacKENZIE and BANKS*, JJ.
Opinion
MacKENZIE, Judge.
This case involves the constitutionality of certain Liquor Control Commission regulations restricting advertising of prices or brands of liquor, wine, and beer. The Attorney General appeals from a grant of summary judgment sustaining the regulations. We reverse.
The Liquor Control Commission, established in 1933 under the Michigan Liquor Control Act, is charged with the duty of controlling the manufacture, possession, transportation, and sale of alcoholic beverages within the State of Michigan. M.C.L. § 436.1; M.S.A. § 18.971. The commission is further directed to adopt rules and regulations to carry out the policies of the act. M.C.L. § 436.7; M.S.A. § 18.977. In 1975 the commission promulgated certain rules which either prohibited or restricted price and brand advertising of alcoholic liquor by manufacturers, wholesalers, retailers, and outstate sellers. Similar restrictions had been embodied in the commission's rules since 1935.
In a memorandum dated September 5, 1979, *298 State Representative Richard Fitzpatrick requested the Attorney General's opinion on the constitutionality of Liquor Control Commission rule 33, 1979 AC, R 436.1333, which provides as follows:
“Prices and brands.
“Rule 33. (1) A retail licensee may advertise that he sells alcoholic liquor.
“(2) A retail licensee shall not advertise the brands or the prices of alcoholic liquor off the licensed premises.
“(3) A manufacturer, an outstate seller of beer, an outstate seller of wine, or a wholesaler may advertise the brands of alcoholic liquor he is licensed to sell.
“(4) A manufacturer of beer or wine, an outstate seller of beer, an outstate seller of wine, or a wholesaler shall not advertise the price of beer or wine.
“(5) A wholesaler may give a price list to the retail licensee which states the brands and prices of the beer and wine that he is licensed to sell.”
The Attorney General found that subsections (2) and (4) were invalid both as an improper exercise of the state's police power and as an unconstitutional restraint on the freedom of commercial speech guaranteed by the First and Fourteenth Amendments to the United States Constitution and article 1, § 5 of the Michigan Constitution of 1963. OAG, 1981–1982, No 6033, p. 561 (February 4, 1982).
Following that opinion, the then chairman of the Liquor Control Commission, Thomas F. Schweigert, requested the Attorney General's opinion as to the validity of several other commission regulations, all of which served to implement the general ban on off-premise price advertising. Consistent with his previous opinion, the Attorney General issued OAG, 1981–1982, No 6051, p 607 (April 6, 1982), in which he found that the following *299 sections of the commission's regulations were also invalid:
“R 436.1309 Advertising approval.
“(2) Advertising in newspapers and periodicals, by all licensees except retail licensees, shall be limited to those published not less than quarterly and having a second class mailing permit, except upon written order of the commission.
**331 “(3) Alcoholic liquor shall not be advertised in a publication or program for a special occasion, except upon written order of the commission 30 days in advance of the event.”
“R 436.1315 Retail advertising space.
“(2) Alcoholic liquor shall not be advertised on the licensed premises by placing the alcoholic liquor or an advertisement of alcoholic liquor in a window facing outside the licensed premises.”
“R 436.1327 Outside signs.
“Rule 27. (1) Advertising of a brand of alcoholic liquor shall not be placed or erected on the outside of the licensed premises of a retail licensee.”
On June 25, 1982, plaintiffs1 commenced the present action in Ingham Circuit Court. Plaintiffs alleged that the Attorney General improperly acted outside the scope of his authority in issuing opinions No. 6033 and 6051, and, further, that the administrative rules addressed in those opinions were valid and enforceable. Plaintiffs' subsequent motion for summary judgment pursuant to GCR 1963, 117.2(2) and (3) was granted following a full *300 hearing. On July 13, 1983, defendant filed a claim of appeal and a request for stay of the circuit court order along with the request for immediate consideration of the request for a stay. This Court granted defendant's request for immediate consideration but denied his request for stay of the circuit court order. On its own motion, this Court added the Michigan Liquor Control Commission as a party defendant. Accordingly, defendant Liquor Control Commission has been enforcing the rules at issue in the instant case.
Defendant-appellant Attorney General appeals as of right.
I
Plaintiffs first contend, and the circuit court agreed, that the Attorney General improperly exercised powers belonging to the legislative and judicial branches of the government by ruling in opinions No. 6033 and 6051 that the above regulations did not directly advance the presumed purpose behind their promulgation.
The Attorney General's statutory duty to give opinions on questions of law requires him to advise members of the Legislature as to the constitutionality of state statutes and administrative rules when so requested. East Grand Rapids School Dist, supra, p. 394, 330 N.W.2d 7. Such determinations can be made only after the statute or rule in question has been examined under appropriate constitutional standards. Under the First Amendment, commercial speech can be restricted or prohibited only where the governmental interest that is thereby advanced outweighs the rights of the parties involved. See Section II–A below.
**332 In the case at bar the Attorney General found that by enacting these regulations, the commission intended to discourage the artificial stimulation of liquor consumption. Contrary to plaintiffs' assertion, however, such findings are not an improper determination of fact but a reasonable assumption regarding the public policy concerns underlying the commission's regulations. In order properly and completely to address the question of whether the advertising rules were constitutionally valid, such an assumption on the part of the Attorney General was necessary. Plaintiffs do not contend that this assumption was wrong. Indeed, plaintiffs themselves state that the rules were aimed at discouraging the artificial stimulation of alcohol consumption. We conclude that the Attorney General did not impermissibly venture into the legislative arena by making such an assumption.
Nor do we find that the Attorney General invaded the province of the courts. The very pendency of the instant litigation demonstrates that *302 opinions of the Attorney General are not final and binding, but are instead subject to review in the courts of this state. We find that the Attorney General did not exceed the scope of his authority in issuing OAG Nos. 6033 and 6051.
II
Plaintiffs next argue that the rules in question do not constitute impermissible restraints on the freedom of commercial speech guaranteed by the First and Fourteenth Amendments to the U.S. Constitution and by art. 1, § 5 of the Michigan Constitution of 1963. The issue thus framed is whether the State of Michigan can constitutionally prohibit the dissemination of truthful information concerning the price at which alcoholic beverages may be sold.
In order to balance these competing interests under the First Amendment, the United States Supreme Court has developed a four-part analysis for determining the validity of restraints on commercial *304 speech. (1) Is the commercial speech protected by the First Amendment; that is, does it concern lawful activity and not mislead? (2) Is the asserted governmental interest substantial? (3) Does the regulation directly advance the governmental interest asserted? (4) Is the regulation more extensive than is necessary to serve the governmental interest? Central Hudson Gas, supra, 447 U.S. p. 566, 100 S.Ct. p. 2351;Metromedia, Inc., supra, 453 U.S. p. 507, 101 S.Ct. p. 2892;Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 103 S.Ct. 2875, 77 L.Ed.2d 469 (1983). Both parties here agree that the first two steps of the above test are met. Substantial disagreement exists, however, as to whether these regulations “directly advance” the state's interest in promoting temperance. Before resolving this issue, though, we must first address several related topics.
B.
Plaintiffs argue extensively in their brief that the case of Queensgate Investment Co. v. Liquor Control Comm., 69 Ohio St.2d 361, 433 N.E.2d 138 (1982), app. dismissed459 U.S. 807, 103 S.Ct. 31, 74 L.Ed.2d 45 (1982), controls the instant case. The plaintiff in Queensgate challenged on First Amendment grounds a state regulation which prohibited holders of certain liquor permits from advertising the price per bottle or drink of any alcoholic beverage. Invoking the four-part Central Hudson Gas test, the Ohio Supreme Court found the regulation to be constitutionally permissible. The plaintiff thereafter filed a timely appeal with the United States Supreme Court on the issue of whether the regulation violated the First and Fourteenth Amendments by suppressing the public dissemination of truthful information concerning a lawful activity. On October 4, 1982, the Supreme Court dismissed the appeal for want of a substantial federal question. *305 Plaintiffs here urge that the dismissal is a decision by the Supreme Court on the merits of the case and is therefore binding on lower courts addressing substantially similar issues.
A brief comparison of the regulations here and in Queensgate convinces us that the summary dismissal of Queensgate is not controlling. In the first place, subsections (2) and (4) of R 436.1333 prohibit all off-premise price advertising of alcoholic liquor by manufacturers, wholesalers, retailers, and outstate sellers. The regulation challenged in Queensgate, on the other hand, expressly authorizes all off-premise price advertising of alcoholic beverages by **334 anyone in the chain of sale, with several limited exceptions.2
Second, the Michigan regulations also prohibit *306 retail licensees from advertising brands of liquor off the licensed premises. R 436.1327(1); 436.1333(2). The Ohio regulations differ in that they do not cover advertising of brands, but are aimed only at price advertising.
Third, Michigan rule 9 contains more extensive prohibitions on advertising than does the Ohio rule. Michigan attempts to regulate the types of publications in which certain licensees may advertise. R 436.1309(2), (3). Liquor Control Commission approval is required for advertising in a program or publication for a special occasion, and for advertising in newspapers or periodicals other than those “published not less than quarterly and having a second class mailing permit”. Id. The Ohio rules contain no such restrictions.
Finally, the Michigan rules prohibit advertising of “alcoholic liquor” by placing the liquor or an advertisement for it in a window facing outside the licensed premises. R 436.1315(2). In Ohio it is only price or price advantage which may not be advertised in this fashion.
Consequently, it appears that the Queensgate Court had before it a ban on advertising much less restrictive than the Michigan scheme. Only limited types of highly competitive advertising were prohibited by the Ohio regulations. The Michigan Liquor Control Commission, on the other hand, attempted to regulate substantially more than general price information. Based on this comparison, we conclude that Queensgate did not present the Supreme Court with the “precise” issues found here.
“Once passing beyond consideration of the Commerce Clause, the relevance of the Twenty-first Amendment to other constitutional provisions becomes increasingly doubtful. As one commentator has remarked: ‘Neither the text nor the history of the Twenty-first Amendment suggests that it qualifies individual rights protected by the Bill of Rights and the Fourteenth Amendment where the sale or use of liquor is concerned’.” Craig, supra, p. 206, 97 S.Ct. p. 461.
The cases of California v. LaRue and New York State Liquor Authority v. Bellanca, supra, do not persuade us that we should afford these regulations a presumption of validity or otherwise alter our review of them under the Central Hudson Gas analysis for commercial speech.
We therefore conclude that the Twenty-first Amendment does not require us to deal with restraints on freedom of speech any differently than we would if alcoholic beverages were not involved.
The Attorney General concedes that there is at least some correlation between general brand advertising of alcoholic beverages and levels of consumption. However, we note that such brand advertising in Michigan by manufacturers, wholesalers, and outstate sellers is permissible under current regulations. The Attorney **336 General persuasively *310 argues that in light of the numerous and pervasive advertisements concerning brands of alcoholic beverages found within this state, it is difficult to perceive how the addition of the element of price could have any measurable impact upon the level of alcohol consumption. We agree with the Attorney General's reasoning.
Plaintiffs' arguments are aimed more at the effects of any alcohol advertising than at the effects of a limited advertising ban such as that employed in Michigan. Plaintiffs have shown us no authority in support of their position that price advertising would have a direct impact upon consumption in the State of Michigan. In fact, several studies relied on in reported cases from other jurisdictions conclude that there is no significant relationship between direct price control of alcohol and its consumption. Rice v. Alcoholic Beverage Control Appeals Bd., 21 Cal.3d 431, 146 Cal.Rptr. 585, 579 P.2d 476 (1978); Seagram & Sons v. Hostetter, 16 N.Y.2d 47, 262 N.Y.S.2d 75, 209 N.E.2d 701 (1965). In Hostetter, the Court sustained a statute which tied the New York price of brand liquors to the national price. The Court cited studies of a commission appointed by the governor to reappraise the state's liquor law, which found no relation between temperance and the price of alcoholic beverages:
“The commission addressed itself, among other things, to the price of liquor in New York and the effect of price on temperance in the use of liquor. One of the basic assumptions of the statute then in effect was that, if the price of liquor were cheap, its consumption would increase and the policy effected by the statute was to sustain the price.
“The commission's studies led it to believe that the assumed favorable relation of high-priced liquor to temperance was chimerical. * * *
*311 “The principal benefit from the minimum price requirement for liquor in New York went to the liquor interests. This served ‘merely’, said the commission, ‘to insure profit margins of the various segments of the industry’. * * * ‘The argument that high prices promote temperance in that they keep liquor out of the hands of those who should not have it’ is ‘unfounded’ * * *.
“Its studies showed no correlation between consumption and prices, looking at the experience in States in which prices were high compared with those in which they were low.” 16 N.Y.2d 53–54, 262 N.Y.S.2d 75, 209 N.E.2d 701. (Citation omitted.)
In Rice, supra, as well, the California Court cited studies which found little correlation between temperance and price maintenance, 21 Cal.3d 431, 457, 146 Cal.Rptr. 585, 579 P.2d 476. If such studies are to be believed, we must find that, in Michigan, any additional impact on the level of consumption attributable to the absence of price advertisements would be negligible. Since Michigan now permits some advertisement of brands, it is permissible, for example, for a manufacturer to suggest that the public consume Brand X beer. Would it have any significant effect on consumption to additionally allow the information that Brand X is available for a certain price this week, or that Brand X is cheaper than Brand Y? Plaintiffs have failed to demonstrate that this is the case. In fact, as noted above, plaintiffs' arguments make sense mainly in the context of a total ban on advertising of beer, wine, and liquor—a situation which the Michigan regulatory scheme does not and has not contemplated.
Based on the record before us, we conclude that plaintiffs have failed to demonstrate how the regulations in question would directly advance temperance. Additionally, we are mindful of Justice Blackmun's observations in his concurrence to Central Hudson Gas, supra, 447 U.S. pp. 574–575, 100 S.Ct. p. 2356:
*312 “I seriously doubt whether suppression of information concerning the availability and price of a legally offered product is ever a permissible way for the State to ‘dampen’ demand for or use of **337 the product. Even though ‘commercial’ speech is involved, such a regulatory measure strikes at the heart of the First Amendment. This is because it is a covert attempt by the State to manipulate the choices of its citizens, not by persuasion or direct regulation, but by depriving the public of the information needed to make a free choice.”
The constitutional right to engage in business is subject to the police power of the state to preserve the public health, safety, morals, and general welfare. See Carolene Products Co. v. Thomson, 276 Mich. 172, 178, 267 N.W. 608 (1936). If a “real and substantial relationship” exists between regulations enacted pursuant to a state's police power and the health, safety, morals, or general welfare of the public, the regulations will be upheld unless they “needlessly * * * invade property or personal rights as protected by the Constitution * * * ”. Grocers Dairy Co. v. Dep't of Agriculture Director, 377 Mich. 71, 76, 138 N.W.2d 767 (1966); Carolene Products, supra, p. 178, 138 N.W.2d 767. A presumption of validity *313 attaches to legislative or administrative remedies. Carolene, supra.
Despite the presumption of validity accorded the commission's regulations, we hold that a “real and substantial” relationship does not exist between them and the promotion of temperance for the reasons outlined above under Section II–D. Moreover, we do not believe that the police power, however strong, permits a state to enact measures for the welfare of its citizens which violate personal freedoms protected by both the state and federal constitutions. See Carolene, supra.
Reversed. No costs, a public question being involved.
Plaintiff Michigan Beer & Wine Wholesalers Association is a nonprofit corporation. Plaintiff Torkal Corporation, doing business as Wine Basket No. II, is a specially designated merchant under M.C.L. § 436.2q; M.S.A. § 18.972(17)—a retail licensee. Plaintiffs Linda Bandy and Charles Mitchener are Michigan residents who allege that they are adversely affected by nonenforcement of Liquor Control Commission regulations.
“No alcoholic beverages shall be advertised in Ohio except in the manner set forth in regulation 3 and as hereinafter provided.
“(A) As to advertising on the premises, holders of Class C, D, and G permits shall not advertise the price per bottle or drink of any alcoholic beverage, or in any manner refer to price or price advantage except within their premises and in a manner not visible from the outside of said premises.
“(B) Manufacturers and distributors of alcoholic beverages are permitted to advertise their products in Ohio.
“Holders of Class C, D, and G permits shall be authorized to advertise in newspapers of general circulation, radio and television, on billboards, calendars, in or on public conveyances and in regularly published magazines. Advertising may include the retail price of the original container or packages, but such advertising may not in any manner refer to price advantage”.