With the state facing a lawsuit, lawmakers move on lifting happy hour restrictions

A lawsuit filed against the state by a Northern Virginia restaurateur could be the motivation the General Assembly needs to change laws that restrict happy hour advertising.

Chef Geoff Tracy, who operates  locations of his Chef Geoff restaurant in Virginia, Maryland and Washington D.C., filed suit against the Virginia Alcoholic Beverage Control Authority earlier this year over the law.

“I just find that to be annoying and overly restrictive, I don’t think anyone really cares,” Tracy said. “I think we’ve got lots of issues … I think we could all agree on this one.”

Virginia’s happy hour laws have changed in recent years, like in 2014 when restaurants were given permission to advertise happy hour on flyers, social media and sandwich boards outside of businesses.

But there are still some very specific strings attached.

Happy hours can’t happen after 9 p.m., restaurants can only call it “happy hour” or use the phrase “drink specials,” prices can’t be advertised outside of the restaurant and two-for-one drink specials are illegal, among other restrictions.

A bill from Del. John Bell, D-Chantilly, would loosen the rules about wording in advertisements and allow for “creative marketing techniques, provided that such techniques do not tend to induce overconsumption or to induce consumption by minors.”

The bill is ready for a vote from the full House.

Bell’s legislation would solve the problem at the heart of Tracy’s lawsuit, but the legal process will continue as lawmakers consider the law, said Michael Kelly, spokesman for Attorney General Mark Herring. 

Tracy’s lawsuit is focused on his ability to be creative in marketing deals, said Anastasia Boden, an attorney from the Pacific Legal Foundation that is representing Tracy.

“It’s legal to offer happy hour in Virginia, it’s legal to reduce your prices, it’s just not legal to talk about them and that’s a violation of the First Amendment,” Boden said.

If a restaurant is found in violation of the law, it can be fined by the state or temporarily lose its license to serve liquor.

Efforts to loosen the rules around happy hour advertising have usually been non-starters in the General Assembly, said Del. Barry Knight, R-Virginia Beach, chair of the committee that moved Bell’s bill forward.

“It looks like we have some First Amendment consequences now that might put this to rest,” Knight said at a committee meeting.

Travis Hill, CEO of ABC, said removing the restrictions on advertising pricing was most important to the agency, which supports Bell’s bill.

“That’s what got us in trouble in the first place,” he said at a subcommittee meeting.

ABC laws make sure Virginia isn’t actively encouraging consuming alcohol, Knight said. That’s been the argument from the state, which began its legal hearings in Tracy’s case by retelling the story of a young woman who was killed in a drunken-driving crash following the driver’s participation in a happy hour.

Tracy’s lawyers dismissed that argument.

“If ABC truly believes that happy hour presents a threat to public safety, it can ban happy hour altogether, or it can limit the number of drinks one can purchase, or it can tax happy hour beverages — but it will have to bear the political consequences of that choice,” they wrote. “It may not, however, manipulate consumers into avoiding happy hour by restricting truthful speech about a perfectly lawful business practice. Plaintiffs simply seek to speak freely about their legal business practices.”

The state argued its happy hour advertising regulations are narrowly drawn and still allow restaurant owners to share information about times, location, drink types, brands and combined food and drink specials, “all of which is useful and objectively verifiable information for consumers,” a state legal filing says.

“The commonwealth has a substantial government interest in limiting promotions associated with discounted alcoholic beverages during happy hour, which may result in binge drinking, drinking and driving, and other harmful personal and public-health consequences,” attorney for the state wrote.