Friday, June 4, 2004
Supreme Court Overturns Ruling That Struck Down Generic Commodities Advertising Program
By KENNETH OFGANG, Staff Writer/Appellate Courts
An agricultural marketing order which compels producers to pay for generic advertising does not violate the First Amendment and does not necessarily violate the “liberty of speech” clause of the California Constitution, the state Supreme Court ruled yesterday.
The justices unanimously overturned a Fifth District Court of Appeal ruling in favor of a Tulare County grower. Justice Carlos Moreno, writing for the court, said more factfinding is required in order to determine whether the advertising component of the California Plum Marketing Program constitutes an impermissible type of compelled speech under the state Constitution.
Chief Justice Ronald M. George and Justices Ming Chin and Kathryn M. Werdegar joined in Moreno’s opinion, including his conclusion that U.S. Supreme Court precedent requires rejection of Gerawan Farming, Inc.’s federal claim.
Justice Joyce L. Kennard dissented in part, arguing that the marketing order might violate the First Amendment and that the entire case, not just the state issue, should be reconsidered in the lower courts. Justice Janice Rogers Brown, joined by First District Court of Appeal Justice Ignacio Ruvolo Jr., said the high court should not have addressed the federal issue at all because the Court of Appeal did not.
Ruvolo sat on assignment in place of the recused Justice Marvin Baxter.
Yesterday’s decision is the high court’s second in the case. It sent the case back to the Fifth District in 1999, following that court’s first ruling in the case, which upheld the program.
The case has been in the courts since 1994, when Gerawan—backed by the conservative Washington Legal Foundation—challenged the state agriculture secretary’s plum marketing assessment. Gerawan claimed that requiring it to pay up to 11 cents for every 28-pound box sent to market as its share of generic advertising costs was “socialistic” and “collectivist,” and said the assessments interfered with its own marketing by reducing the amount of money available to pay for it.
The assessment was imposed under a state law allowing 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, 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.
When the suit first went to court, 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 high court, in its 4-3 decision five years ago, said the Court of Appeal should have considered whether the state Constitution grants broader commercial free speech rights than the First Amendment. A divided Fifth District panel then concluded that that producers’ free speech interests were implicated by the program, and that the state failed to show a “substantial governmental interest sufficient to outweigh those free speech rights.”
But Moreno, writing yesterday for the high court, said the Fifth District decision was flawed in that it gave great weight to the fact that the program allowed “some plum growers to mandate that all plum growers participate financially” in the generic advertising.
“Membership participation within agricultural marketing programs ensures that the programs themselves, and the various features thereof, will be adopted only if the requisite contingent of agricultural producers believes in their efficacy,” Moreno wrote. “...Such participation may be a legitimate means of furthering the government interest.”
Moreno also noted that the Court of Appeal did not specify the appropriate level of constitutional scrutiny, nor did it determine whether the fact that the secretary must approve the content of advertising paid for under the program makes it a form of government speech.
If the advertising is government speech, the justice elaborated, “a very deferential” standard of review applies. But if Gerawan is correct in its assertion that state approval “is a mere formality” rather than an exercise of “statutorily derived regulatory authority,” then intermediate scrutiny is appropriate, the justice concluded.
The case is Gerawan Farming, Inc. v. Kawamura, 04 S.O.S. 2813.
Copyright 2004, Metropolitan News Company