Tuesday, December 18, 2001
C.A. Expands State Constitutional Protection for Commercial Speech
Agriculture Marketing Order Held to Violate State’s ‘Liberty of Speech’ Clause
By KENNETH OFGANG, Staff Writer/Appellate Courts
An agricultural marketing order which compels producers to pay for generic advertising violates the “liberty of speech” clause of the California Constitution, the Fifth District Court of Appeal ruled yesterday.
“[A] statutory marketing program that permits some plum growers to mandate that all plum growers participate financially in the program does not embody a substantial governmental interest sufficient to outweigh the free speech rights of plum producers,” Justice Steve Vartabedian wrote for a divided panel.
“In the absence of a substantial governmental interest sufficient to outweigh those free speech rights, we must conclude a program that implicates the free speech rights also violates those rights,” the justice added.
Justice Thomas Harris joined in the opinion, while Justice Herbert Levy dissented.
The ruling is a victory for a Tulare County grower, Gerawan Farming, Inc. Gerawan challenged the state agriculture secretary’s plum marketing assessment in 1994 as a violation of free speech rights under both the state Constitution and the First Amendment.
Tulare Superior Court Judge Patrick O’Hara granted the state’s motion for judgment on the pleadings, and the Fifth District initially affirmed following a U.S. Supreme Court ruling upholding a similar program at the federal level.
But the state Supreme Court sent the case back last year. In a 4-3 decision, the justices directed the intermediate panel to reconsider the question of whether the state Constitution grants broader commercial free speech rights than the First Amendment, and if so to consider Gerawan’s claim under the broader standard.
Gerawan claims that it is being denied freedom of speech because it is required, under the California Plum Marketing Program, to pay up to 11 cents for every 28-pound box it sends to market as its share of generic advertising costs. State law allows the secretary of food and agriculture to impose the tax if approved by a vote of a majority of all plum growers, provided that majority grows at least 65 percent of all California plums.
Such marketing programs have been a feature of California and federal law since 1937. The California Marketing Act and the federal Agricultural Marketing Agreement Act allow officials to regulate the quantity of a product to be marketed, the regulation of periods for marketing, the standards of quality which must be followed, and the amounts which growers must contribute for generic advertising, sales promotion, research, and quality control.
The programs are typically administered by boards made up of producers and handlers of the commodity involved, such as the California Plum Marketing Board. The state also has boards for apples, grapes, asparagus, kiwifruit, wheat, rice, tomatoes, eggs, walnuts and other commodities.
Gerawan is one of a number of producers who have argued that they are entitled to rely on their own, branded advertising and should not be compelled to fund generic advertising. Gerawan, joined by the conservative Washington Legal Foundation, criticized compelled participation in generic advertising as “socialistic” and “collectivist,” and said the assessments interfered with its own marketing by reducing the amount of money available to pay for it.
Under the state Supreme Court decision, Vartabdian explained yesterday, commercial speech in California is entitled to the same protection as political speech—at least when it is truthful and not misleading. In either case, the justice said, the burden is on the state to establish societal justification for any restriction.
The state argued that a generic advertising tax is a legitimate part of an overall marketing program and is preferable to more intrusive measures, such as price and production controls.
But Vartabedian reasoned that “in the absence of an affirmative and binding legislative or administrative determination that intervention in the market processes in the first instance is necessary, there is no legitimate basis for interference with the free speech rights of dissenting growers.”
The justice distinguished cases holding that labor unions, after being elected as bargaining representatives of workers in a particular field, may use compulsory dues or agency fees for purposes related to collective bargaining. The right to act collectively is an essential aspect of labor relations in America, the jurist explained, while forced collective farm advertising fails to serve “any societal interest beyond the mere facilitation of decision making.”
Levy, dissenting, argued that the plum assessment was a reasonable exercise of the state’s authority to “establish and maintain orderly marketing conditions and fair prices for agricultural commodities.”
The California Marketing Act is essential to the state’s economy, Levy wrote, because it assures stability and prevents growers who enter the marketplace early from freezing out their competitors.
“Ensuring a stable and consistent plum market constitutes a sufficiently compelling reason to require cooperation among growers,” Levy said. The plum assessment, he declared, carries the same justification as compulsory bar dues or union agency fees.
The case is Gerawan Farming, Inc. v. Lyons, F031142.
Copyright 2001, Metropolitan News Company