By Sue Reisinger, From Corporate Counsel

A company called Flying Dog Brewery, which makes a craft beer called Raging Bitch, has registered an important First Amendment victory for businesses that want to go to market with creative brand names, showing that regulators can be held personally liable for censorship.

“This was a great American company standing up for the First Amendment,” Flying Dog’s attorney Alan Gura, of Gura & Possessky in Alexandria, Virginia, told CorpCounsel.com on Wednesday.

It all started in November 2009 when the Michigan Liquor Control Commission refused to allow Flying Dog to register its Belgian-style IPA (India pale ale) because it said the beer’s name was unacceptable. That meant Flying Dog could not distribute and sell Raging Bitch anywhere in the state.

According to court documents, the commission denied Flying Dog’s application because “the proposed label which includes the brand name ‘Raging Bitch’ contains such language deemed detrimental to the health, safety or welfare of the general public.” It said the label was, among other things, offensive and sexist.

The commission’s attorney pointed out that the state had rejected other beers that contained the word “bitch” on their labels. And he objected to the sexual innuendo on the beer’s label, including: “Remember, enjoying a RAGING BITCH, unleashed, untamed, unbridled—and in heat—is pure GONZO!”

Flying Dog appealed the denial, but lost. The company then filed suit in U.S. District Court in Grand Rapids against the commissioners individually, claiming they had violated the company’s First Amendment rights. The commissioners won on summary judgment, based on “quasi-judicial and qualified immunity.”

Again Flying Dog appealed, this time to the U.S. Court of Appeals for the Sixth Circuit in Cincinnati, where federal judges apparently have a better sense of humor.

During the court battle in 2011, the U.S. Supreme Court decided Sorrell v. IMS Health, which required “a heightened degree of scrutiny” of “commercial speech regulated by the government.” Adhering to the ruling, the Michigan commission rescinded the rule under which it had denied approval for Raging Bitch, and approved it for sale in the state.

But Flying Dog continued its First Amendment claim for compensatory damages—two years’ worth of lost beer sales—despite the district court’s dismissal. The Sixth Circuit sided with the beer company in an opinion written by Judge Jane Stranch and discussing, among other things, “gonzo journalist” Hunter S. Thompson’s role in the beer’s name. (Artwork by Thompson’s longtime illustrator Ralph Steadman adorns the beer’s packaging.)

The court remanded the case for trial, saying there was no privilege because the commissioners were “on notice that banning a beer label based on its content would violate the First Amendment” unless they could satisfy an exacting judicial test.

Rather than face a trial over liability and damages, the commission settled the case on April 3. Gura declined to discuss details of the settlement but said, “We are very satisfied.”

He noted, “It’s an important case that confirms once again that government regulators can’t censor speech they dislike.”

His sentiments were echoed in a May 4 article in the Booze Rules Blog, published by San Francisco law firm Hinman & Carmichael. Glenn Lammi, chief counsel of the Washington Legal Foundation, wrote the article.

Lammi said that the Sixth Circuit opinions—especially a dissenting one that would have simply found a First Amendment violation on the record—offer valuable guidance to future businesses who challenge arbitrary commercial speech restrictions.

The article concludes that other companies “will surely agree that the best outcome of [the case] would be that they won’t themselves ever have to spend the time and money the Frederick, Maryland, craft brewery invested to fight paternalistic speech restrictions.”

Photo courtesy Flying Dog Brewery

For more on this story go to: http://www.corpcounsel.com/id=1202725657078/First-Amendment-Win-for-Brewerys-Raging-Bitch-Beer#ixzz3ZSrggKHY