Monday, November 23, 2009
Ninth Circuit Rejects Free Speech Challenge to Grape Growers Tax
By KENNETH OFGANG, Staff Writer
A California law compelling table grape growers to pay for generic advertising does not violate the First Amendment, the Ninth U.S. Circuit Court of Appeals ruled Friday.
The activities of the California Table Grape Commission, the panel reasoned, constitute government speech under Johanns v. Livestock Marketing Association (2005) 544 U.S. 550 rather than an abridgement of the growers’ free speech rights.
The case is one of a number, in state and federal courts, in which growers and producers have challenged agricultural assessment programs on free speech grounds. The grape program is authorized in California by the 1967 Ketchum Act.
The act recites the importance of the industry to “the economy, welfare, standard of living and health of a large number of citizens residing in this state.” It includes a finding that a generic marketing and advertising program is needed because the “inability of individual producers to maintain or expand present markets or to develop new or larger markets for such grapes results in an unreasonable and unnecessary economic waste of the agricultural wealth of this state.”
The case that was ruled on yesterday has been in the courts since 1996, when Delano Farms Company, Lucas Brothers Partnership, and The Susan Neill Company filed suit in U.S. District Court in Fresno.
Their complaint alleged that they were being forced to pay $600,000 annually and receiving inadequate value. They claimed that the commission spends too much money on non-advertising costs, such as employee travel and scholarships, and they objected to the generic campaign—focusing on grapes as a healthy alternative to other snack foods—as creating a misimpression that all varieties of table grapes are of similar quality.
Senior District Judge Oliver Wanger upheld the program, but in Delano Farms v. Cal. Table Grape Comm’n (9th Cir. 2003) 318 F.3d 895, the appellate court reversed. It held that the program appeared to violate the First Amendment under standards that the U.S. Supreme Court had set subsequent to Wanger’s decision.
The commission then amended its answer to assert that its activities constituted government speech. While the case was pending, the high court decided Johanns, which upheld a $1-a-head fee on cattle to provide funds for a marketing and research program under the Beef Promotion and Research Act of 1985.
The court concluded, 6-3, that the fee was used to promote government speech and not to compel ranchers to disseminate an unwanted message.
Justice Antonin Scalia was joined in the majority by Chief Justice William Rehnquist, and Justices Sandra Day O’Connor—since retired—and Clarence Thomas, Ruth Bader Ginsburg and Stephen Breyer. Justice David Souter—also since retired—was joined in dissent by Justices Anthony Kennedy and John Paul Stevens.
Following that ruling, Wanger again upheld the grape program, and the Ninth Circuit on Friday said he was correct.
Like the Beef Act, the Ketchum Act places responsibility for the content of generic advertising on a governmental entity rather than private persons, Judge M. Margaret McKeown explained for the panel. She noted that “the government is not required to be impartial when speaking, as long as its speech is consistent with the Establishment and Equal Protection clauses.”
McKeown went on to say that the state’s control over the grape commission is even greater than the federal government’s control over the entities that control the beef program. The commission’s members are appointed, and are removable, by the state secretary of food and agriculture, and its books and records are subject to audit and review by the state, the judge pointed out.
While the secretary cannot unilaterally suspend or terminate the program, she added, he or she may order a referendum of growers on the question, either upon the recommendation of the commission or upon a petition from growers.
McKeown acknowledged that the last provision distinguishes the grape program from California’s pistachio program, which the court upheld in Paramount Land Co. LP v. California Pistachio Commission (9th Cir. 2007) 491 F.3d 1003.
The Pistachio Act allows the secretary to order the Pistachio Commission to “correct or cease any existing activity or function that is determined by the secretary not to be in the public interest or to be in violation of this chapter.” But the secretary’s control over the grape commission, including the power to remove its members, is also sufficiently extensive to find that the commission is a governmental entity for purposes of the First Amendment, McKeown said.
Senior Judge John T. Noonan concurred in the opinion. Judge Stephen Reinhardt concurred in part, agreeing that the commission is a governmental entity but arguing that it was unnecessary for the panel to consider the extent of governmental control as a factor in the free-speech analysis.
The case is Delano Farms Company v. California Table Grape Commission, 08-16233.
Copyright 2009, Metropolitan News Company