LSO, Ltd. v. Stroh
205 F.3d 1146, 2000 Cal. Daily Op. Serv. 1772, 2000 Daily Journal DAR 2473 (2000)
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Rule of Law:
State officials are not entitled to qualified immunity for enforcing a state liquor regulation that infringes upon First Amendment rights because the Twenty-first Amendment does not override established free speech protections. A plaintiff has standing to sue for prospective relief based on threats of future enforcement when government officials have previously interfered with their expressive conduct and have not disavowed future enforcement, creating a credible threat of self-censorship.
Facts:
- Lifestyles Organization, Ltd. (LSO) is a membership organization that has held annual conventions since 1973, which since 1991 have included a Sensual and Erotic Art Exhibition.
- LSO contracted to hold its 1997 convention at the Palm Springs Convention Center (the 'Center'), a facility with a state-issued liquor license.
- The art LSO intended to display, while not legally obscene, depicted images prohibited by California Administrative Code, Title 4, Section 143.4, which restricts certain sexual imagery on premises holding a liquor license.
- In May 1997, officials from the California Department of Alcoholic Beverage Control (ABC), including Jay Stroh, Manuel R. Espinoza, and David E. Gill, met with representatives of the Center and other licensed venues.
- At the meeting, the ABC officials warned the licensees that allowing LSO's exhibition on any part of their premises could result in sanctions, including the revocation of their liquor licenses.
- The ABC officials rejected LSO’s proposal to create an alcohol-free zone for the exhibition, maintaining that the regulation applied to the entire licensed premises.
- On July 23, 1997, the Center's manager notified LSO that, due to the fear of sanctions from the ABC officials, he was barring the art exhibition from the Center.
Procedural Posture:
- Lifestyles Organization, Ltd. (LSO) sued officials of the California Department of Alcoholic Beverage Control (the 'Officials') in federal district court, seeking injunctive relief.
- The district court issued a Temporary Restraining Order (TRO) prohibiting the Officials from interfering with LSO's 1997 art exhibition.
- LSO then filed an amended complaint seeking damages, declaratory relief, and prospective injunctive relief under 42 U.S.C. § 1983.
- The district court granted the Officials' motion to dismiss the claims for prospective relief, ruling that LSO lacked standing.
- The district court then granted summary judgment to the Officials on the damages claim, holding that they were protected by qualified immunity.
- LSO appealed the district court's dismissal on standing and the grant of summary judgment on qualified immunity to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Are state alcoholic beverage control officials entitled to qualified immunity for threatening to enforce a regulation restricting the display of non-obscene erotic art at a licensed venue, when Supreme Court precedent has established that the Twenty-first Amendment does not give states the power to abridge First Amendment protections?
Opinions:
Majority - T.G. Nelson
No. State alcoholic beverage control officials are not entitled to qualified immunity because their conduct violated clearly established First Amendment rights. The three-part inquiry for qualified immunity asks: 1) what right was violated, 2) was the right clearly established, and 3) would a reasonable official have believed the conduct was lawful. The right at issue is the right to exhibit non-obscene art on a licensed premises free from state interference. This right was clearly established by the Supreme Court’s 1996 decision in 44 Liquormart, Inc. v. Rhode Island, which held that the Twenty-first Amendment does not qualify or override the First Amendment's protections for speech. As 44 Liquormart was decided a year before the officials' actions, no reasonable official could have believed that using a liquor regulation to suppress protected speech was constitutional. The officials' argument that a California constitutional provision required them to enforce the regulation is unavailing due to the Supremacy Clause of the U.S. Constitution, which prevents state law from immunizing officials who violate federal rights.
Analysis:
This decision significantly reinforces that the First Amendment limits the regulatory power of state agencies, particularly those overseeing liquor licensing. It clarifies that the Supreme Court's decision in 44 Liquormart effectively stripped away the Twenty-first Amendment as a shield for content-based speech restrictions, holding officials personally accountable for using such regulations to censor expression. The ruling also solidifies the principle of third-party standing in First Amendment cases, allowing content creators to sue when the government pressures venues or distributors to suppress their speech. This precedent serves as a strong deterrent against indirect censorship by state officials and protects expressive activities, like art shows, from being chilled by the threat of regulatory action against host venues.
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