Generally, advertising of alcohol is permitted under the First Amendment, as interpreted by cases such as Central Hudson Gas and Electric Corp. v. Public Service Commission of New York, which established that advertising is permissible under the First Amendment subject to regulation. The 21st Amendment, which repealed prohibition, is also a constitutional basis to support the notion that advertising alcohol is generally legal.
Like all advertising, the most important requirement for alcohol advertising to pass constitutional muster is that it be truthful. Federal law generally prohibits advertising for alcohol products that contains “statements that are false or untrue; statements that are inconsistent with approved product labels; false or misleading statements that are disparaging of a competitor’s product; health-related statements that are false or misleading; misleading guarantees (money back guarantees are not prohibited)”. See https://www.ttb.gov/images/pdfs/p519005.pdf
Specific federal regulations governing advertising different types of alcoholic beverages are found at 27 C.F.R. 4.64 (wine), 5.65 (distilled spirits), and 7.54 (malt beverages).
Consistent with federal law, advertising alcohol is legal under Nebraska law, again subject to prohibitions related to false and misleading information. For a list of prohibited advertising practices for holders of a Nebraska liquor license, see Nebraska Liquor Control Commission, Nebraska Rules and Regulations, Chapter 6.001.02 (page 24 of the .pdf at this link: https://www.nebraska.gov/rules-and-regs/regsearch/Rules/Liquor_Control_Commission/Title-237.pdf).
According to the Nebraska Liquor Control Commission (NLCC), ”[r]etail licensees may run advertisements in newspapers, circulars or coupon packages that regularly promote business to potential customers. Prices can be advertised.”
The NLCC has further stated that it “is permissible for a retail licensee to establish his own coupon which offers a percentage discount, a fixed dollar amount discount, or a special price on alcoholic beverages upon presentation. Such coupons may be made available by distribution on the licensed premises or by printing in news media or through a general resident mailing service.” Further, “[r]etailers may also distribute gift certificates provided the certificates are redeemed in full at the time the consumer presents it to the retailer. No credit can be carried after the initial redemption of the certificate.”
As the NLCC has also stated, “Manufacturer’s coupons” “may NOT be redeemed by the retailer, but must be handled through the mail between the consumer and the manufacturer or a clearing house.” See also Nebraska Liquor Control Act, 53-168(2).
In 2019, the Nebraska Legislature Nebraska passed the Nebraska Hemp Farming Act, Nebraska Revised Statute 2-501 et seq. According to the Institute of Agriculture and Natural Resources at the University of Nebraska, the Act “legalize[s] hemp production for fiber, grain, or cannabidiol (CBD) in 2019, with the condition that plant parts of industrial hemp have a THC concentration of less than 0.3%.”
After the law was passed, Nebraska law enforcement agencies argued the statute’s language creates ambiguity about whether products marketed as CBD actually contain illegal substances, such as THC, as the “[p]roduction and use of marijuana and THC for medical and recreational purposes remain illegal in Nebraska.” But federal officials approved the law in January of 2020, and instances of prosecuting CBD sellers in 2020 and beyond seem to be rare to nonexistent.
Thus, so long as the advertiser is compliant with state law and federal law and markets the product within those parameters, CBD products can be advertised. As renowned media law firm Lerman Senter PLLC counsels, such advertising is legal if:
- The CBD product is derived from Hemp with THC levels of 0.3% or lower.
- The hemp is produced under a production plan approved by a state or federal government (or permissible research plan).
- The business is licensed pursuant to state regulations.
- The product complies with FDA requirements and applicable state or local requirements.
However, as Lerman Senter also notes, advertising CBD products is not without pitfalls. Red flags to watch for include:
- Ads should not feature CBD products that are food, drugs or dietary supplements. This includes beverages, gummies, pet foods and treats.
- Ads should not mention specific diseases or illnesses. Words such as restore, prevent, mitigate, cure or treat should be avoided.
- Ads should not contain images targeted to children.
- Ads should not guaranty results.
- Any claims re health or therapeutic benefits must be substantiated.
- Ads should not make any claims regarding safety of a specific product.
Further, to minimize risk, Lerman Senter advises:
- Get indemnification from the advertiser regarding legality of products and compliance with federal and state regulation.
- Certification that all CBD products advertised contain no more than 0.3% THC.
Tobacco and E-Cigarettes
“The FDA regulates all tobacco products, including e-cigarettes, hookah tobacco, and cigars.” According to the federal government, a “covered tobacco product” is “any tobacco product deemed under the deeming final rule to be subject to chapter IX of the Federal Food, Drug, and Cosmetic Act, but excludes any component or part that is not made or derived from tobacco. For example, cigars, liquid nicotine, hookah/waterpipe tobacco, and pipe tobacco would be considered ‘covered tobacco products,’ while vaporizers or pipes that are not pre-loaded with tobacco or a tobacco-derived substance would not.” An advertisement for e-cigarettes, or electronic nicotine delivery systems (ENDS), must display a health warning statement.
Print advertisements or other advertisements with a visual component (including, for example, advertisements on signs, shelf-talkers, Web pages, and email) for “covered tobacco products” must comply with 15 U.S. Code § 1333. Under that law, advertisements must carry one of the forms of Surgeon General’s warnings and conform to the format used by the federal Cigarette Liability Act. 15 U.S. Code § 1333(a)(1). The label with warning must be conspicuous and legible, contrasting in typography, layout and color with all other material in the advertisement. 15 U.S. Code § 1333(b)(2). The FDA provides a list of requirements for warning labels at this link: https://www.fda.gov/tobacco-products/products-guidance-regulations/advertising-and-promotion
Under amendments to federal law on December 20, 2019, the legal age to purchase tobacco products is 21. Federal law also provides that smokeless tobacco advertising must carry labels approved by the FTC. See 15 U.S. Code § 4402(b)(“Smokeless tobacco warning; required labels”). As of September, 2020, additional FDA rules regulating cigars and pipe tobacco implemented in 2018 have been vacated.
As of October 1, 2020, Nebraska includes electronic nicotine delivery systems within its definition of tobacco products:
“Electronic nicotine delivery system includes, but is not limited to, the following:
(i) Any substance containing nicotine, tobacco, or tobacco derivatives, whether sold separately or sold in combination with a product or device that is intended to deliver to a person nicotine, tobacco, or tobacco derivatives in vapor, fog, mist, gas, or aerosol form;
(ii) Any product or device marketed, manufactured, distributed, or sold as an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, electronic hookah, or similar products, names, descriptors, or devices; and
(iii) Any component, part, or accessory of such a product or device that is used during operation of the product or device when sold in combination with any substance containing nicotine, tobacco, or tobacco derivatives.” Neb. Rev. Stat. § 28-1418.01(b).
The penalties for unlawful use by or sale to persons under the age of 21 of both tobacco and electronic nicotine delivery systems are the same under Nebraska law. Neb. Rev. Stat. § 28-1418; 28-1419; 28-1425 (2020).
The Nebraska legislature enacted additional tobacco-product-related legislation in 2020, restricting vending machine sales of vapor products to locations inaccessible to the general public or in locations where liquor is sold, see Neb. Rev. Stat. § 28-1429.02 (2020), and self-service displays to tobacco specialty stores and cigar bars, see Neb. Rev. Stat. § 28-1429.03 (2020). Nebraska also banned the use of e-cigarettes indoors and in public places as of November 14, 2020. See Neb. Rev. Stat. § 71-5730(d).
Fair Housing/Equal Employment Opportunities
The Federal Civil Rights Act of 1968 established the framework for protecting persons’ fundamental rights in obtaining housing and employment. Nebraska law is consistent with federal law.
Under the Nebraska Fair Housing Act, Neb. Rev. Stat. § 20-301 et seq., it is unlawful to “[m]ake, print, publish, or cause to be made, printed, or published any notice, statement, or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, color, religion, national origin, handicap, familial status, or sex or an intention to make any such preference, limitation, or discrimination.” Neb. Rev. Stat. § 20-318(3).
The federal government has created a list of “unacceptable” words to avoid in advertising housing.
Further, consistent with federal law prohibiting the inclusion of preferences in an advertisement (i.e., it is illegal under federal law to advertise for a “female administrative assistant” or a “male factory worker”), Nebraska law provides that “[i]t shall be an unlawful employment practice for an employer, labor organization, or employment agency to print or publish or cause to be printed or published any notice or advertisement relating to employment by such an employer or membership in or any classification or referral for employment by such a labor organization, or relating to any classification or referral for employment by such an employment agency, indicating any preference, limitation, specification, or discrimination based on race, color, religion, sex, disability, marital status, or national origin, except that such a notice or advertisement may indicate a preference, limitation, specification or discrimination based on religion, sex, disability, marital status, or national origin when religion, sex, disability, marital status, or national origin is a bona fide occupational qualification for employment.” Neb. Rev. Stat. § 48-1115.
Due to a unique confluence between the First and Second Amendments, the advertising of firearms is not heavily regulated. Gun sale regulations are numerous, however, and the chief issue for newspapers is avoiding any knowing publication of an offer for an illegal sale.
Firearm sales fall into two general categories: licensed dealers and unlicensed individuals. Dealers must comply with any federal, state and local laws, including performing federal background checks. See, e.g., 18 U.S. Code § 922(t). They may not sell firearms to residents of states other than where the dealers’ premises are located. See, e.g., 18 U.S. Code § 922(a)(5) and (9). They may not sell rifles, shotguns, or ammunition to any person under 18 or handguns to anyone less than the age of 21. 18 U.S. Code § 922(b)(1).
Under Nebraska law, “[d]ealers of firearms shall distribute to all purchasers information developed by the Department of Health and Human Services regarding the dangers of leaving loaded firearms unattended around children.” Neb. Rev. Stat. § 69-2426.
However, these requirements apply only to dealers and do not apply to “a person who makes occasional sales, exchanges, or purchases of firearms for the enhancement of a personal collection or for a hobby, or who sells all or part of his personal collection of firearms.” 18 U.S. Code § 921(a)(21)(c). Thus, because of this so-called “gun show loophole”, a newspaper would not be in violation of federal law if it were to publish an ad paid for by a private individual, such as a classified ad, without performing any background check. While former President Obama stated in 2016 that he would take executive action to close this loophole, such an executive order has yet to be issued.
However, there is a movement among publishers and others to refuse to publish such ads on the basis of gun safety, and there have been instances of backlash against publishers who advertised the sale of firearms due to the loophole.
Nebraska law, with some exceptions, requires “a certificate prior to the purchase, lease, rental, or transfer of a handgun.” Neb. Rev. Stat. § 69-2401 et seq. Concealed carry is legal in Nebraska. See Neb. Rev. Stat. § 69-2441.
Nebraska state law “only allows for fireworks to be sold between June 24 and July 5 or between December 28 and January 1.” See Neb. Rev. Stat. § 28-1249. It is permissible to advertise that “consumer fireworks” are to be sold in Nebraska on those days. The state stopped trying to expressly define a “consumer firework” in 2010. Since then, state law has described prohibited the sale of that are not defined as a “consumer firework” to the general public. See Neb. Rev. Stat. § 28-1241(c).
Also, as pointed out on the website of the Nebraska chapter of the National Safety Council, “[l]ocal jurisdictions have the authority to be more restrictive. Always check with your local jurisdiction to find out what restrictions, if any, they may have on the dates fireworks may be sold.”
Lotteries and Gambling
Under the federal criminal lottery statute, anyone who “knowingly deposits in the mail, or sends or delivers by mail….[a]Any newspaper, circular, pamphlet, or publication of any kind containing any advertisement of any lottery, gift enterprise, or scheme of any kind offering prizes dependent in whole or in part upon lot or chance, or containing any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prizes….[s]hall be fined under this title or imprisoned not more than two years, or both; and for any subsequent offense shall be imprisoned not more than five years.” 18 U.S. Code § 1302.
However, the federal criminal lottery statute is inapplicable to state-sanctioned games of chance. Under 18 U.S. Code § 1307(a)(2), the prohibitions do not apply to advertisements for state lotteries or “an advertisement, list of prizes, or other information concerning a lottery, gift enterprise, or similar scheme…that is authorized or not otherwise prohibited by the State in which it is conducted and which is—
- conducted by a not-for-profit organization or a governmental organization; or
- conducted as a promotional activity by a commercial organization and is clearly occasional and ancillary to the primary business of that organization.”
Thus, as set forth in the NPA’s publication Nebraska Publishing Laws on pages 149 and 150, in Nebraska, “certain types of lotteries, i.e., lotteries ‘authorized or not otherwise prohibited by the State in which it is conducted,’ run by certain types of entities, i.e. ‘not-for-profit’ or ‘governmental’ organizations, may be advertised by newspapers which are delivered through the mail.”
Nebraska law authorizes several different types of operations that are exempt from the criminal lottery statute. For example, the Nebraska Bingo Act, Neb. Rev. Stat. § 9-201 through § 9-266, allows certain types of nonprofit organizations to obtain licenses to conduct bingo games. Bingo may be advertised only if the advertising does not reference aggregate prize values exceeding $4,000. Neb. Rev. Stat. § 9-241.07.
The Nebraska Pickle Card Lottery Act, Neb. Rev. Stat. §§ 9-301 to 9-356, allows nonprofit organizations to obtain licenses to sell pickle cards, or to retain agents to distribute by sale such cards for them, including for-profit private entities such as bars and restaurants. See Neb. Rev. Stat. § 9-330. However, due to a 1991 ruling by the Federal Communications Commission that to the knowledge of the NPA has never been applied to Nebraska publishers, Nebraska newspapers are taking some risk if they advertise pickle card or keno games, even if licensed, when a for-profit businesses is the distributor. According to the FCC, if the pickle card game or keno game is operated by a private business on behalf of a nonprofit organization, or city or county, the game is not truly “conducted by” the nonprofit or governmental organization. Therefore, the FCC opined that under federal law, such games may not be legally advertised. See pages 151 and 152 of Nebraska Publishing Laws for a detailed discussion about the risks of advertising pickle card lotteries.
Nebraska also authorizes and regulates lotteries. “The Nebraska Lottery and Raffle Act governs lotteries which exceed $1,000 in gross proceeds (ticket sales) and raffles which exceed $5,000 in gross proceeds. The Nebraska Small Lottery and Raffle Act governs lotteries and raffles which do not exceed the $1,000/$5,000 thresholds.” The Nebraska Lottery and Raffle Act, Neb. Rev. Stat. § 9-401 et seq., allows nonprofit organizations to obtain licenses to conduct lotteries and raffles, as defined by the Act. Meanwhile, the Nebraska Small Lottery and Raffle Act, Neb. Rev. Stat. 9-501 et seq., permits lotteries with gross proceeds less than $1,000 or raffles with gross proceeds less than $5,000, even where no Department of Revenue license is issued, so long as the small lottery or raffle is conducted by a nonprofit organization and so long as the proceeds of the raffle or lottery go to “charity or community betterment purposes” as defined under Neb. Rev. Stat. § 9-504.
Thus, in sum, except for bingo games (which are government by the $4,000 threshold set forth above), the confluence of federal and state laws applicable to lotteries means generally that newspapers may legally advertise Nebraska lotteries so long as:
- The lottery is conducted by a valid, nonprofit organization, that is tax exempt under Section 501 of the Internal Revenue Code, or a governmental entity; and
- The nonprofit or governmental entity conducting the game has obtained a license for the game from the Nebraska Department of Revenue.
Another form of a lottery exempt from the criminal lottery statute is a “gift enterprise.” Under Neb. Rev. Stat. § 9-701, a person engaged in a business in Nebraska may conduct a “gift enterprise” as a promotional mechanism. With regard to advertising a gift enterprise, page 151 of Nebraska Publishing Laws advises that “the promotional activity may be advertised so long as no monetary consideration other than a product purchase is required for participation, and so long as the business running the promotion does not generate an independent profit from the promotion itself.”
Nebraska law also authorizes and regulates casino gambling. As of November of 2020, Nebraska voters passed “a trio of ballot initiatives allowing casinos at licensed horse race tracks and earmarking most of the tax revenue to property tax relief.” Eligible racetracks “include those in South Sioux City, Lincoln, Omaha, Columbus, Hastings, and Grand Island.” Expanded gaming is expected to be offered to the public by mid- to late 2021 or in 2022.
Finally, federal regulations prohibit anyone from sending a “letter, newspaper, periodical, parcel, stamped card or postcard, circular, or other matter permitting or facilitating participation in a lottery; any lottery ticket or part thereof or substitute; and any form of payment for a lottery ticket or share.” Domestic Mail Manual (DMM), United States Postal Service (USPS), § 601.9.3.2, Unlawful Mail Matter. But so long as an advertisement for a lottery does not constitute a lottery ticket, this provision is generally inapplicable to newspapers thanks to a 1999 Supreme Court ruling and a subsequent USPS regulation clarifying how the rule is applied. In Greater New Orleans Broadcasting Ass’n, Inc. v. U.S., broadcasters were charged under the federal criminal lottery statute for advertising gambling activities authorized under Louisiana state law. There, the Court ruled that “prohibitions against truthful broadcast advertising for lawful gambling activity” violated the First Amendment. See Federal Register Volume 65, Number 234 (Tuesday, December 5, 2000). Then, in 2000, the Federal Register was amended to recognize that “Newspapers and other publications that are mailed may run advertisements for lawful gambling activity without risking their authorizations to mail at periodicals rates.” Id.
Thus, since 2000, an advertisement for a lottery does not amount to “permitting or facilitating participation” in such lottery. The provisions of the Domestic Mail Manual that prohibit “facilitating” a lottery no longer apply to “gambling advertisement mailers, so long as the activity advertised is legal and the mailing does not provide any entry materials.” USPS Customer Support Ruling, July, 2014. Still, newspapers should be careful not to publish advertisements that contain or could be construed as actual lottery or raffle tickets. And the Justice Department could still prosecute under federal law when it believes a lottery or raffle is fraudulently or inappropriately administered under 18 U.S. Code § 1341 – Frauds and swindles.
Use of Trademarked Logos and Phrases
such as “Huskers” and “Super Bowl”
A trademark is a word, phrase, or logo that identifies the source of goods or services. The purpose of various federal and state laws prohibiting trademark infringement is to prevent public confusion and protect a trademark holder’s merchandizing rights, not to afford such holders complete control over their own marks. Thus, in reporting news, a newspaper can use trademarked images to help describe newsworthy events because of the legal doctrine known “fair use,” which protects the use of trademarked images identifying the subject of an article.
Generally, use of a trademark by someone other than the trademark’s owner is actionable by the owner as trademark infringement. Trademark law protects a business’ commercial identity or brand by discouraging other businesses from adopting a name or logo that is “confusingly similar” to an existing trademark. Under Nebraska law, the Uniform Deceptive Trade Practices Act allows for civil actions to protect against instances of trademark infringement. See, e.g., Neb. Rev. Stat. § 87-303.
However, owners of trademarks do not have truly exclusive rights to their marks. “After all, the reason you have a logo is so the public will see it and think about your company.” Certainly, it is the right of the trademark holder to prevent commercial enterprises from profiting from a mark that the holder has imbued with value. But publishing the news is a protected activity under the First Amendment, and it would be too great of a burden on free speech to force newspapers to refer to “the college football team that plays in Lincoln, Nebraska” rather than “the Nebraska Cornhuskers.”
To accommodate this reality, the law has developed the concept of “fair use,” which permits the use of another’s trademark to describe the genuine goods or services associated with the mark. Federal trademark law, codified as the Lanham Act, provides that it is a defense to a claim of trademark infringement if the “term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party.” 15 U.S. Code § 1115(b)(4). Accordingly, federal courts have determined that in order to establish a classic fair use defense, a defendant must prove the following three elements: 1. Defendant’s use of the term is not as a trademark or service mark (i.e., the paper is not appropriating the logo as its own); 2. Defendant uses the term “fairly and in good faith”; and 3. [Defendant uses the term] “[o]nly to describe’ its goods or services” (i.e., describe the newsworthy event). See, e.g., Cairns v. Franklin Mint Co., 292 F.3d 1139 (9th Cir. 2002); see also Packman v. Chicago Tribune Co., 267 F.3d 628 (7th Cir.).
Thus, news coverage describing newsworthy events that includes photos or images of trademarked images, such as college sports teams’ logos, is permissible within reason. For example, if a paper wanted to use a Husker logo to call a reader’s attention to a news story about the University of Nebraska football team, and used that mark in a way to highlight the story rather than to appropriate it for a commercial use or some other use beyond the minimum necessary to identify the subject of the story, the paper has a good argument to make that its use is legal. Such use must be reasonable and cannot be perceived as marketing the paper or leveraging the mark for the paper’s own gain beyond reporting the news.
But the defense is not iron-clad. For example, a use that was parodic, rather than merely descriptive, was found to be infringing. Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769 (8th Cir. 1994). Moreover, the use of the mark cannot imply sponsorship by the entity that owns the mark. A federal court in Washington held that a radio station’s and bar’s commercial use of marks similar to a university’s ‘GONZAGA UNIVERSITY’ marks and related identifiers “created a likelihood of confusion” in the minds of consumers about the origin of the goods or services, because the university’s marks were commercially strong, the radio station and bar used several of the university’s marks and identifiers, and there was evidence of actual confusion. See Corp. of Gonzaga University v. Pendleton Enterprises, LLC, No. CV-14-0093-LRS (E.D. Wash. Sept. 25, 2014).
As the Gonzaga case suggests, fair use only applies when the newspaper is covering an event or team for the purpose of newsgathering. There is no exception for advertising or suggesting sponsorship of a product or service. If a newspaper wanted to run its own ad, and include a Husker logo, it would have to pay a licensing fee. Certain trademark holders, such as the NCAA, are particularly diligent in defending any use whatsoever. As a result, newspapers should not use NCAA-trademarked phrases such as the words “Final Four” in advertising.
The NFL, while not quite as focused on the issue as the NCAA, is still willing to aggressively pursue commercial use of the word “Super Bowl.” The league employs “spotters” to look for unauthorized use of the words or logo. Even a seemingly innocuous reference to a Super Bowl sale is in violation if proper fees are not paid. A merchant selling products that have already been licensed by the NFL can promote the sale of those items in advertising, provided the appropriate wording is used. For instance, the Super Bowl beer sponsor can be described as the “official beer sponsor” but not as the “official beer.”
Ads cannot contain:
- “Super Bowl”
- “Super Sunday”
- “National Football League” (NFL)
- “National Football Conference” (NFC)
- “American Football Conference” (AFC)
- Any NFL logo or uniform
- Any specific team name or nickname
Ads can contain:
- “The Big Game”
- “The Football Championship Game”
- The date of the game
- The names of the team’s home cities
- A generic football picture or graphic
Finally, use of established political parties’ logos is less of a risk than NCAA or NFL because political ads are core political speech protected by the First Amendment. But both parties, particularly the RNC, have challenged merchandising that infringes on the donkey and elephant logos. Classic fair use, by its nature, is descriptive, rather than commercial, so it is fair to say that political parties are less likely to challenge classic fair use of their marks.
Political Advertising Disclaimers
Federal law governs advertising disclaimers during elections for federal offices. Crucially, ads involving federal races “do not have to comply with state or local disclaimer law if the communication is made only with respect to federal candidates and elections.” Federal law applies to advertisements “expressly advocating the election or defeat of a clearly identified candidate” for federal office under 52 U.S. Code § 30120. The Federal Election Commission publication titled “Special Notices on Political Ads and Solicitations” is a particularly good reference for disclaimers during federal elections. It cites applicable Code of Federal Regulations and provides examples of how to meet disclaimer requirements depending on who is paying for the ad. For additional information, the Federal Election Commission’s phone number is 800-424-9530.
For state elections, controlling law is the Nebraska Political Accountability and Disclosure Act, Neb. Rev. Stat. §§ 49-1401 to 49-14,142. Disclaimer requirements are set forth in Neb. Rev. Stat. §49-1474.01, and provide that any person not acting on their own behalf “who pays for the production, distribution, or posting of a billboard, placard, poster, pamphlet, or other printed matter relating to a candidate or ballot question shall cause a disclaimer containing the name and street address of the person to appear on such matter.” Further, Rule 8, promulgated by the Nebraska Accountability and Disclosure Commission, governs the “size and placement of the disclaimer shall be determined by rules and regulations adopted and promulgated by the commission.” The Commission’s guidelines are available here: https://nadc.nebraska.gov/rules.html. For additional information, the Commission’s phone number is 402-471-2522.