Assignment:
Bad Frog Brewery v. New York State Liquor Authority
Judge Newman BACKGROUND Bad Frog is a Michigan corporation that manufactures and markets several different types of alcoholic beverages under its "Bad Frog" trademark. This action concerns labels used by the company in the marketing of Bad Frog Beer, Bad Frog Lemon Lager, and Bad Frog Malt Liquor. Each label prominently features an artist's rendering of a frog holding up its four-"fingered" right "hand," with the back of the "hand" shown, the second "finger" extended, and the other three "fingers" slightly curled. Bad Frog does not dispute that the frog depicted in the label artwork is making the gesture generally known as "giving the finger" and that the gesture is widely regarded as an offensive insult, conveying a message that the company has characterized as "traditionally . . . negative and nasty." Versions of the label feature slogans such as "He just don't care," "An amphibian with an attitude," "Turning bad into good," and "The beer so good . . . it's bad." Another slogan, originally used but now abandoned, was "He's mean, green and obscene." Bad Frog's labels have been approved for use by the Federal Bureau of Alcohol, Tobacco, and Firearms, and by authorities in
at least 15 states and the District of Columbia, but have been rejected by authorities in New Jersey, Ohio, and Pennsylvania. In May 1996, Bad Frog's authorized New York distributor, Renaissance Beer Co., made an application to the New York State Liquor Authority (NYSLA) for brand label approval and registration. . . . In September 1996, NYSLA denied Bad Frog's application. . . . Explaining its rationale for the rejection, the Authority found that the label "encourages combative behavior" and that the gesture and the slogan, "He just don't care," placed close to and in larger type than a warning concerning potential health problems, foster a defiance to the health warning on the label, entice underage drinkers, and invite the public not to heed conventional wisdom and to disobey standards of decorum. In addition, the Authority said that it considered that approval of this label means that the label could appear in grocery and convenience stores, with obvious exposure on the shelf to children of tender age and that it is sensitive to and has concern as to [the label's] adverse effects on such a youthful audience.
Finally, the Authority said that it has considered that within the state of New York, the gesture of "giving the finger" to someone has the insulting meaning of "**k You," or "Up Yours," . . . a confrontational, obscene gesture, known to lead to fights, shootings, and homicides . . . concludes that the encouraged use of this gesture in licensed premises is akin to yelling "fire" in a crowded theater, . . . [and] finds that to approve this admittedly obscene, provocative confrontational gesture would not be conducive to proper regulation and control and would tend to adversely affect the health, safety, and welfare of the People of the State of New York. Bad Frog filed the present action in October 1996 and sought a preliminary injunction barring NYSLA from taking any steps to prohibit the sale of beer by Bad Frog under the controversial labels. The District Court denied the motion [and Bad Frog now appeals the District Court decision].
COMMERCIAL OR NONCOMMERCIAL SPEECH? In Bad Frog's view, the commercial speech that receives reduced First Amendment protection is expression that conveys commercial information. The frog labels, it contends, do not purport to convey such information, but instead communicate only a "joke." As such, the argument continues, the labels enjoy In this case, Bad Frog has suggested numerous less intrusive alternatives to advance the asserted state interest in protecting children from vulgarity, short of a complete statewide ban on its labels. Appellant suggests "the restriction of advertising to point-of-sale locations; limitations on billboard advertising; restrictions on over-the-air advertising; and segregation of the product in the store."
Even if we were to assume that the state materially advances its asserted interest by shielding children from viewing the Bad Frog labels, it is plainly excessive to prohibit the labels from all use, including placement on bottles displayed in bars and taverns where parental supervision of children is to be expected. Moreover, to whatever extent NYSLA is concerned that children will be harmfully exposed to the Bad Frog labels when wandering without parental supervision around grocery and convenience stores where beer is sold, that concern could be less intrusively dealt with by placing restrictions on the permissible locations where the appellant's products may be displayed within such stores. Or, with the labels permitted, restrictions might be imposed on placement of the frog illustration on the outside of six-packs or cases sold in such stores. NYSLA's complete statewide ban on the use of Bad Frog's labels lacks a "reasonable fit" with the state's asserted interest in shielding minors from vulgarity, and NYSLA gave inadequate consideration to alternatives to this blanket suppression of commercial speech.
[W]e conclude that NYSLA has unlawfully rejected Bad Frog's application for approval of its labels.
[Reversed and remanded.] [For an update on Bad Frog, see https://badfrog.com]
Questions
1. a. Why did the Court of Appeals conclude that the Bad Frog label constituted commercial speech?
b. What is the significance of that decision?
2. Why did the Court of Appeals rule in Bad Frog's favor?
3. A letter to the Buffalo News objecting to the Bad Frog decision:
The U.S. Court of Appeals' reasoning was that "vulgar materials enjoy wide currency in society today-including comic books for children." Therefore, while offensive it is not illegal. I guess this means the sickies of the world can show us anything they want, even if we don't want to see it. They have the right to offend us, but we have no rights not to be offended. We all know what the extended middle finger means. I personally get offended when this gesture is directed at me, whether by humans or cartoon animals. I would like to show the Court of Appeals my opinion of their decision by extending my middle finger in their direction. I hope they enjoy this gesture. After all, it's not illegal. But maybe it should be.
a. Do you agree with the letter writer that Bad Frog is an unwise decision? Explain.
b. Should "the finger" be an illegal gesture? Explain.
4. In online fantasy sports leagues, fans "draft" current professional players in baseball, football, etc. to create their own teams that then compete based on the actual performance of those players. A Missouri company, C.B.C. Distribution and Marketing, Inc., operated a forprofit online league. In 2005, Major League Baseball changed its licensing policies and declined to allow C.B.C. a license to continue using the names and statistics of major league baseball players. C.B.C. then sued claiming it had a First Amendment right to use the information while M.L.B. argued that the information was protected by the intellectual property/publicity rights of the players. Decide the case. Explain. See C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, 505 F.3d 818 (8th Cir. 2007); cert. den. Major League Baseball v. C.B.C. Distrib. & Mktg, 2008 U.S. LEXIS 4574.
5. Two Rhode Island statutes prohibited all price advertising on liquor in the state, except for price tags and signs within a store itself which were not visible on the street. The state sought to reduce alcohol consumption. Two licensed liquor dealers challenged the statutes' constitutionality.
a. How would you rule on that challenge? Explain.
b. Why would the elimination of price advertising arguably contribute to reduced alcohol consumption? See 44 Liquormart, Inc. v. Rhode Island, 116 S.Ct. 1495 (1996).