C.A.: Dairy Assessment Does Not Violate Cheese Producer’s Speech Rights

Monday, February 4, 20008

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C.A.: Dairy Assessment Does Not Violate Cheese Producer’s Speech Rights

By KENNETH OFGANG, Staff Writer

A statutory assessment on dairy producers that funds the state’s “Real California Cheese” campaign does not violate the California Constitution’s “liberty of speech” clause, the Third District Court of Appeal ruled Friday.

The court affirmed Sacramento Superior Court Judge Raymond Caddei’s ruling in favor of the California Department of Food and Agriculture, whose assessment—levied pursuant to statutory authority—of 10 cents per hundredweight of milk was challenged by Gallo Cattle Company.

Gallo has long produced milk and cheese in Merced County. Its cheese has been sold under the Joseph Farms brand since winemakers Ernest and Julio Gallo sued their brother Joseph Gallo Jr. over 20 years ago to stop him from using the family name to sell dairy products.

Joseph Gallo Jr. and Ernest Gallo both died last year. Julio Gallo died in 1993.

Justice M. Kathleen Butz, writing for the Court of Appeal, cited Johanns v. Livestock Marketing Ass’n. (2005) 544 U.S. 550, in which the U.S. Supreme Court upheld a similar assessment by the federal government. The high court held that when the assessment is part of a program administered by the government, the advertising content that it funds is government speech, not compelled private speech that would violate the First Amendment.

Gallo Cattle argued that Johanns should not apply because the state Constitution’s speech protections are broader than those of the First Amendment. The company also argued that even if commodities assessment generally do not violate producer’s free speech rights, they should be treated as compelled speech when economic necessity forces the producer to obtain a state certification that is available only to those who pay the levy, as with the “Real California Cheese” campaign.

Justice M. Kathleen Butz, writing for the Court of Appeal, rejected both arguments.

“There is no persuasive reason arising from the language or history of the California provision impelling a different resolution from that under the federal Constitution,” she wrote.

Contrary to Gallo’s assertions, Butz added, commodities assessments are not comparable to forced payment of union dues.

The justice went on to note that Gallo, by its own admission, “is not legally compelled to carry the Real California Cheese certification seals on its cheese packages.”

While the company might prefer to use the money used for generic advertising to advertise its own products as superior to those of its competitors, including other California producers, “whether the resulting effects of a government program intervening in the economy are unfair, too unfair, or unfair enough to override the resulting advantages, is ordinarily a question of public policy assigned to the Legislature,” Butz wrote.

The case is Gallo Cattle Company v. Kawamura, 08 S.O.S. 781.