The 3-0 decision by a panel of the 10th Circuit Court of Appeals comes about six months before Salt Lake City stages the 2002 Winter Olympics when its liquor laws and Mormon culture will be the focus of international attention. The Games will run from February 8-24, 2002.
In 1996, a local monthly magazine called the Catalyst and the Utah Licensed Beverage Association jointly sued the state, seeking a preliminary injunction against the advertising ban.
U.S. District Judge David Sam last year denied the request and the plaintiffs appealed the ruling.
The appeals court judges in Denver noted the state allows beer advertising, making the ban on wine and liquor advertising for temperance reasons "irrational," they said.
"Utah also cannot justify its advertising restrictions through its operation of a public business in liquor sales, as Utah has presented no evidence supporting the somewhat counter-intuitive argument that advertising by liquor licensees poses any threat to the operation of a public business," the judges wrote in a 30-page ruling.
A federal appeals court on Tuesday struck down Utah's strict liquor laws that ban advertising for wine and liquor on grounds they limit constitutionally protected free speech.
