Pelts & Skins LLC v. Landreneau

The use of mandatory fees for generic marketing is not ancillary to a government-imposed collective association. Louisiana's use of the Louisiana Alligator Resource Fund to support generic marketing violates the First Amendment.

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Click here for the full text of this decision FACTS:The Louisiana Department of Wildlife and Fisheries oversees the conservation of alligators in the state. It collects fees for licenses hunters and trappers must carry. Funds from this revenue go into the Louisiana Fur and Alligator Public Education and Marketing Fund. The marketing fund markets alligator and fur products, educates the public about the harvesting of those products and recommends strategies to the fur and alligator industry. DWF also collects a variety of fees from alligator hunters, farmers and processors. One of these fees is one for the tag that must be attached to every harvested alligator skin. Revenues from this fee go into the Louisiana Alligator Resource Fund, which helps defray the cost of other alligator programs. Though both funds were created under the DWF, the Louisiana Fur and Alligator Advisory Council is directly responsible for the content of all generic marketing under them, and it must review and approve of all expenditures. The various fees paid by Pelts & Skins, the world’s largest alligator farming operation, account for roughly 25 percent of DWF’s alligator-related revenue. P&S challenged the use of the fee revenue for generic marketing purposes. Specifically, P&S says that its business advantage lies in persuading the public that its products are superior to other alligator products, whereas the generic marketing promotes the notion that alligator products in general are desirable, reliably available and lawfully produced. “Pelts & Skins also hints broadly that the Council’s generic marketing campaign, which consists mainly of sending representatives to fashion shows and setting up educational displays, is a boondoggle. However, Pelts & Skins is quick to clarify that its objection to generic marketing stems from the message of that marketing, not its efficacy.” Citing the First Amendment, P&S sought to enjoin DWF from expanding revenues from the marketing and resource funds, arguing it was being forced to support a message with which it did not agree. The district court agreed with P&S, finding that the generic marketing was not governmental speech and that the use of mandatory fees to fund generic marketing was not ancillary to a broader cooperative regime. HOLDING:Affirmed in part; vacated in part; reversed and remanded in part. Though DWF did not raise the issue at trial, the court considers whether P&S has standing to challenge the marketing fund derived from fees for hunting and trapping licenses. Though the district court found that the P&S operation is conditioned on its payment of mandatory fees, including “license fees” and “tag fees,” that finding was clearly erroneous. There was no evidence that P&S had ever paid either type of fee. This portion of the district court’s judgment is therefore vacated and remanded. P&S does have standing to challenge the resource fund, though, the court holds. The court first considers whether DWF’s generic alligator marketing is government speech or private speech. The court points out that not all government-facilitated speech is government speech. The court is convinced that the method by which DWF funds generic marketing, the composition and operation of the advisory council, and an application of the policies underlying the government-speech doctrine lead to the conclusion that the speech in this case is governmental-facilitation of the private speech of fur and alligator harvesters. As for the method, the fees are imposed on a particular group, whereas government speech is typically funded from the government’s general revenues. As for the composition of the advisory council, it may be a governmental creation, but by statute the council must include members representing trappers, hunters, farmers and coastal landowners, as well as other related groups. Furthermore, that council, not the DWF, primarily controls how the resource fund is used. As to the policies underlying the government speech-doctrine, the court finds they do not support the application of that doctrine to this case. The challenge does not open the door to “lawsuit-induced paralysis,” whereby taxpayers dispute general payments for programs it disagrees with. Nor is this a case where the government must be held accountable to the general public for its decisions. The costs are imposed on a single, narrow group to facilitate a specialized message. After deciding that the resource fund for generic marketing is a compelled subsidy for private speech, the court next considers whether it is nonetheless permissible. While Glickman v. Wileman Bros. & Elliott Inc., 521 U.S. 457 (1997), upheld a compelled subsidy for the generic marketing of fruit, United States v. United Foods Inc., 533 U.S. 405 (2001), struck down such subsidies for the marketing of mushrooms. Comparing the cases, the court says that Glickman was based on individuals who had bound together in a cooperative, an association lacking in United Foods. The court determines that this case is more like the United Foods case. “The fees imposed here, though used for more than generic marketing, represent a collective association only in the loosest sense of that term.” OPINION:Benavides, Circuit Judge; King, C.J., Benavides and Clement, JJ.

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