Liberty Coins v. David Goodman, 748 F.3d 682

Background

Plaintiffs Liberty Coins, LLC and owner John Tomaso operated a storefront in Ohio buying and selling gold and silver; state official photographs of signage prompted enforcement under the Ohio Precious Metals Dealers Act (PMDA).
PMDA requires any person who "holds ... out to the public" as willing to purchase precious metals to obtain a license and comply with reporting, record‑keeping, retention, and inspection requirements; penalties include fines and criminal liability.
Officials told Liberty Coins that stopping advertising would not avoid the licensing requirement; Plaintiffs stopped advertising and purchases while seeking relief.
Plaintiffs brought a facial § 1983 challenge to the PMDA asserting First Amendment (commercial speech), vagueness, and Fourth Amendment claims; they sought a preliminary injunction.
The district court granted a preliminary injunction, finding the PMDA regulated commercial speech; the state appealed.
The Sixth Circuit reviewed de novo the First Amendment legal question and reversed the preliminary injunction, holding the PMDA is a valid economic licensing regulation subject to rational‑basis review.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the PMDA is a facially unconstitutional regulation of commercial speech	PMDA conditions the ability to advertise and hold out to the public on obtaining a license, so it burdens commercial speech and must satisfy Central Hudson	PMDA regulates economic conduct (unlicensed business activity of holding out to the public) not protected speech; licensing is a valid police‑power regulation	PMDA regulates business conduct, not protected commercial speech; Central Hudson does not apply
Proper level of scrutiny for PMDA	Heightened scrutiny for restrictions on advertising/solicitation	Rational‑basis review because no fundamental right or suspect class is implicated; law targets economic activity	Rational‑basis review applies
Whether PMDA is rationally related to legitimate government interests	PMDA too speech‑focused and overbroad in practice	Legislature reasonably targeted businesses that publicly deal in precious metals to curb theft, fencing, money‑laundering and aid investigations	PMDA is rationally related to legitimate interests; likely to be upheld under rational‑basis review
Whether preliminary‑injunction factors favor relief	Loss of First Amendment freedoms constitutes irreparable harm; injunction needed while constitutional issues resolved	Plaintiffs unlikely to succeed on the merits; injunction harms public interest in regulating theft/fraud	Because Plaintiffs are unlikely to succeed on the merits, injunction was erroneous; other factors do not support relief

Key Cases Cited

United States v. Salerno, 481 U.S. 739 (explains the general rule for facial challenges)
Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of New York, 447 U.S. 557 (framework for evaluating restrictions on commercial speech)
Thomas v. Collins, 323 U.S. 516 (discusses state licensing and regulation in relation to speech)
Dent v. West Virginia, 129 U.S. 114 (recognizes state police power to license and regulate occupations)
City of Cleburne v. Cleburne Living Center, 473 U.S. 432 (describes rational‑basis review for economic regulation)
Dukes v. City of New Orleans, 427 U.S. 297 (discusses deference to economic legislation under rational basis)
Thompson v. Western States Medical Center, 535 U.S. 357 (invalidated speech‑triggered regulation of drug advertising; contrasted by court)
Parker v. Commonwealth of Kentucky Board of Dentistry, 818 F.2d 504 (Sixth Circuit case striking advertising restriction; distinguished)
Connection Distribution Co. v. Holder, 557 F.3d 321 (discusses overbreadth/facial First Amendment challenges)
Doe v. Michigan Department of State Police, 490 F.3d 491 (applies rational‑basis review to economic regulation)