Huh? Banning liquor ads in liquor stores? Yes. That’s what California does.
The state law goes back several decades to when (apparently) large alcohol manufacturers tried to use their market power to control distributors and retailers. That law is still on the books, and is part of California’s three-tiered market system for alcohol: manufacture, distribution, and sales. Their laws impose several restrictions to keep these three tiers independent from one another, including a ban on alcohol advertising in liquor stores.
The Ninth Circuit had, in a 1986 case, upheld this same old law against a First Amendment challenge. In that earlier case, one of the reasons the court upheld the law was because it deemed that California had an interest in “promoting temperance.” (Yes, California was “promoting temperance.”)
RDN is a company that wants to sell liquor ad space in liquor stores to liquor makers. They recently challenged the law, arguing that the Supreme Court in a 2011 case (Sorrell v. IMS Health) had changed the legal standard for commercial speech, making the 1986 case effectively void. The full Ninth Circuit disagreed, ruled for the state, and upheld the law, but the Ninth Circuit did not rely on the “promoting temperance” rationale from their 1986 case.
Case: Retail Digital Network, LLC v. Prieto, No. 13-56069 (9th Cir. June 14, 2017) (opinion here)