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Frederick brewery wins free speech case against NC regulation on ‘undignified’ labels

In a victory for a Frederick brewery, a federal judge has struck down as unconstitutional a North Carolina alcohol regulation that prohibited beer labels deemed to be “undignified, immodest, or in bad taste.”

U.S. District Judge Terrence W. Boyle last week agreed with Flying Dog Brewery LLC that the regulation violated the free speech rights of the company – and its competitors – by giving the state’s Alcoholic Beverage Control Commission virtually unbridled authority to block beer labels through a vague and overbroad restriction standard.

The standard’s breadth belied the state’s defense that the regulation was reasonably and narrowly drawn to achieve the government’s substantial goal of protecting children from seeing vulgar, sexually explicit or violent words and images on store shelves, stated Boyle, who sits in the federal courthouse in Elizabeth City, North Carolina.

“The fit here is far from reasonable,” Boyle wrote.

“The regulation prohibits speech deemed by the ABC Commission to be undignified, immodest, or in poor taste, and the range of material that could be determined to violate the regulation is vast,” Boyle added. “These words and their common meanings cover a broad range of words and images which could include both explicit sexual images as well as images which are merely undignified, a term that is defined as ‘appearing foolish and unseemly’ by Oxford Dictionaries Online and as lacking honor or esteem by Merriam Webster.”

Flying Dog’s chief executive officer, Jim Caruso, hailed Boyle’s ruling.

“The First Amendment is the last defense against authoritarian and arbitrary government and it must be protected against and all threats,” Caruso said in a statement Monday. “With the First Amendment seemingly under attack from all sides, it is heartening to see court decisions like this that protect the freedoms it embodies.”

Flying Dog’s attorney praised what he called Caruso’s steadfast belief in free speech and willingness to mount the constitutional challenge.

Marc J. Randazza, who specializes in First Amendment cases, said Tuesday that his client will be seeking just $1 in damages and an award of reasonable and “not terribly expensive” attorney’s fees from the commission.

“No one is doing this case for the money,” said Randazza, who called Flying Dog “a constitutional rights center that funds its litigation by selling beer.”

Randazza is with the Randazza Legal Group PLLC in Las Vegas, Nevada.

The ABC Commission said in a statement Tuesday that it “respects Judge Boyle’s decision and appreciates his time and consideration in hearing this case (and) is reviewing the decision to determine the appropriate next steps.”

Flying Dog pursued its First Amendment challenge even after the ABC commission agreed last September – after the company filed suit — to permit the brewery to market its Freezin’ Season Winter Ale with a label the panel had deemed to be in “bad taste” two months earlier based on the label’s cartoonish depiction of a naked man standing near a campfire.

Flying Dog argued – and Boyle agreed — that the regulation was not only unconstitutional as it was applied to the company but violated the free speech for any brewery’s label because the standard was unreasonably broad.

In his 12-page memorandum opinion, Boyle stated the commission has applied the standard inconsistently, thus providing further evidence of its unconstitutional vagueness.

For example, the commission barred another company’s “BeerGasm” label that depicted a clothed woman, a “Columbian Necktie” label that depicted violence and a “The F Bomb” label that depicted a clothed paratrooper dropping beer bottles. However, the panel approved an “Eff 2020” label that depicted two raised middle fingers, an “Orgasm” label with no accompanying image, and a “Ling Chi” label that depicted violence, Boyle wrote.

Having ruled for Flying Dog in its constitutional challenge, Boyle stated the company can now move for damages and attorney’s fees against the commission.

The case is docketed in the U.S. District Court for Eastern North Carolina as Flying Dog Brewery LLC v. The North Carolina Alcoholic Beverage Control Commission et al., No. 5:21-CV-343-BO.