Liberty Coins, LLC v. Goodman
977 F. Supp. 2d 783
S.D. Ohio2012Background
- Liberty Coins, LLC and Tomaso operate a Delaware County, Ohio coin business advertising to buy, sell, and trade precious metals and scrap.
- Ohio's Precious Metals Dealers Act requires a license to act as a precious metals dealer; it defines a dealer as one who holds out to the public as willing to purchase such articles.
- An Ohio official investigated after an article about Tomaso’s stance on Delaware City’s proposed law; Landis visited the store and noted signage signaling activity.
- Defendant McCartney sent letters alleging violations, requesting records, and warning of fines and licensing consequences; Plaintiffs ceased much advertising and most purchasing.
- Plaintiffs allege the Act violates the First Amendment by restricting commercial speech and is void for vagueness; they seek TRO and preliminary/permanent injunctions.
- Court grants a preliminary injunction enjoining enforcement of the Act’s licensing provision, finding likely unconstitutionality under Central Hudson.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Act violate the First Amendment’s commercial speech protections? | Tomaso argues the licensing regime burdens protected commercial speech. | Defendants contend the Act regulates conduct, not speech, and license is valid. | Likely invalid under Central Hudson |
| What level of scrutiny applies to the Act? | Act is content-based and burdens commercial speech; heightened scrutiny may apply. | Act regulates conduct with incidental speech impact; O’Brien/ intermediate scrutiny applies. | Central Hudson intermediate scrutiny applied; likely to fail |
| Does the Plaintiff show likelihood of success on the merits? | Act fails Central Hudson prongs (protected speech, substantial interest, direct advancement, narrow tailoring). | Act furthers public interests in preventing theft/fraud with licensing. | Plaintiffs show likelihood of success on the merits |
| Are there irreparable harms and public interest supports injunction? | License requirement chills speech and harms ongoing business; irreparable injury shown; public interest favors speech protection. | Licensing serves public interest in safety and oversight. | Irreparable harm shown; public interest favors injunction |
Key Cases Cited
- Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm. of N.Y., 447 U.S. 557 (U.S. 1980) (test for commercial speech regulation)
- United States v. Playboy Entm’t Grp., Inc., 529 U.S. 803 (U.S. 2000) (commercial speech protection framework)
- Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (U.S. 2001) (interchangeable with time/place/m manner scrutiny for certain regulations)
- MD II Entm’t, Inc. v. City of Dallas, 28 F.3d 492 (5th Cir. 1994) (narrow tailoring and direct advancement deficiencies in regulation)
- Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (U.S. 2011) (content-based commercial speech concerns may trigger heightened scrutiny)
- G & V Lounge, Inc. v. Mich. Liquor Control Comm’n, 23 F.3d 1071 (6th Cir. 1994) (loss of First Amendment freedoms constitutes irreparable injury)