Supremes Will Bite Into Commercial Speech Case

Today, Gerawan Farming Inc. goes before the California Supreme Court seeking the affirmance of a ruling that held that, while compelled funding didn't violate the company's First Amendment rights, it did infringe its commercial speech rights. Much is at stake. Gerawan's backers say the court could free individual growers from funding speech they oppose, while opponents contend that a unified industry voice expands the market for California agriculture.

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After the owners of family-run Gerawan Farming Inc. spent years and millions of dollars developing a premium plum called the Prima, they wanted to devote a good portion of their advertising dollars to its promotion. But, instead, some of that money was required to go to the California Plum Marketing Board for generic ads proclaiming that all the state’s plums are high quality. The folks at Gerawan, a 46-year-old orchard outside Fresno, felt that not only helped their competitors, but also violated their state free-speech rights. Today, Gerawan’s lawyers go before the California Supreme Court seeking the affirmance of a 15-month-old appellate ruling holding that, while compelled funding didn’t violate the company’s First Amendment rights, it infringed its commercial speech rights under the California Constitution. In particular, the appeal court held that the state had no public interest in requiring individual growers to fund industry ads because the marketing board — while state-sanctioned — is comprised of self-selected plum growers who decide whether the program should exist and how it operates. In other words, the court held, the state has no voice in the board’s decisions. Much is at stake. Gerawan’s backers say the Supreme Court could free individual growers from funding speech they oppose, while opponents contend that a unified industry voice expands the market for California agriculture. They also argue that an adverse ruling would undermine the avocado, pistachio and grape industries, among others. And there’s also the theory that the appeal court ruling calls into question a range of issues — from election reform laws to initiative-based tobacco surtaxes — which implicate speech. “One of the major functions [of the trade groups] is advertising, and advertising could be prohibited as a result of whether their activities are constitutional,” said Kendall Manock of Fresno’s Baker, Manock & Jensen, which represents the California Table Grape Commission. “One of the problems is, what is advertising? What is speech? Is it merely the advertisements in the newspaper, or anything spoken? Does it deal with foreign trade, or any number of activities that are in writing? “But so far, the Supreme Court has only talked about advertising,” Manock said. The significance of the case can also be measured by the fact that former U.S. Solicitor General Seth Waxman, now a partner in Washington, D.C.’s Wilmer, Cutler & Pickering, intends to use part of the state’s time today to argue for the Grape Commission as amicus curiae. On Gerawan’s side, Michael McConnell, a former constitutional law professor who’s now a judge on the 10th U.S. Circuit Court of Appeals, handled most of the briefing. The ruling will likely affect more than four dozen similar programs in California. In its brief for today’s argument, the state attorney general’s office insists that the Fresno, Calif.-based 5th District Court of Appeal ruling “is inconsistent with decades of settled precedent recognizing the significant governmental interest undergirding agricultural marketing programs.” The AG also argues that the speech at issue is government speech, not commercial speech, because the state Department of Food and Agriculture oversees agricultural boards, even appointing their members. “Accordingly, inasmuch as the state is the speaker here, communicating a duly-authorized and appropriate message in the public interest, the compelled financial support of that governmental expression suffers no constitutional infirmity,” Sacramento-based Deputy AG Tracy Winsor wrote in court papers. “Both logic and precedent compel a holding that governments may, and regularly do, speak through programs like that at issue here.” Gerawan’s lawyers — McConnell, Clovis, Calif., solo practitioner Brian Leighton and Washington appellate specialist Erik Jaffe, who will argue the case — will defend the state free-speech claim, but they also hope to revive their federal claims. They plan to direct the court to a 2001 U.S. Supreme Court ruling that said mandatory promotional assessments for the nation’s mushroom industry violated the First Amendment. The 6-3 ruling in United States v. United Foods, 533 U.S. 405, said the First Amendment prevents the government from “compelling certain individuals to pay subsidies for speech to which they object.” Subsequently, courts have struck down industry ad campaigns such as “Beef: It’s What’s for Dinner,” “Pork: The Other White Meat,” and “Got Milk?” Gerawan’s lawyers note that the holding in United Foods allows mandated assessments if they are “ancillary to a more comprehensive program restricting marketing autonomy.” Far from being ancillary, they insist, the plum marketing ads are the main purpose of the regulatory scheme. “With the exception of the generic marketing program and modest consumer protection, plum growers and handlers operate on an entirely competitive basis,” Leighton and McConnell wrote in court papers. “There are no price controls, prorates, quantity controls, market allocations or restrictions on production or marketing. “It follows,” they said, “that the plum promotion program is unconstitutional, for precisely the reasons the mushroom program was unconstitutional.” Gerawan’s hatred of the forced funding radiates from its briefs. Company officials contend that the plum board has used assessments for promotions directly benefiting competitors, for expensive retreats and to underwrite visits by large buyers to selected packing houses. They also argue that the generic ads are “embarrassingly silly, idiotic and/or totally ineffective,” and that the board itself is populated by members who are “ideologically abhorrent” to Gerawan. The company contends that the generic ads promote the idea that plums are a fungible product, exactly opposite the message backed by Gerawan. “In order to promote its branded products effectively,” the company’s lawyers say, “Gerawan must then spend additional advertising dollars challenging the message promulgated by these generic plum ads.” The Washington Legal Foundation, a nonprofit public interest law firm and policy center based in Washington, is backing Gerawan as an amicus. “Businesses have the constitutional right under California law to choose what speech they will pay for,” WLF Chief Counsel Richard Samp said in a prepared statement. “That right must not be sacrificed merely because the government wants to promote a certain industry as a whole.” The case is Gerawan Farming Inc. v. Lyons, S104019. Justice Marvin Baxter, who is from Fresno, Calif., and has a farm there, will not participate in today’s arguments. He will be replaced by 1st District Justice Ignazio Ruvolo.

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