Filed 6/3/04
IN THE SUPREME COURT OF CALIFORNIA
GERAWAN FARMING, INC.,
Plaintiff and Appellant,
S104019
v.
) Ct.App.
5
F031142
A.G. KAWAMURA,
as Secretary, etc.,
Tulare
County
Defendant and Respondent.
Super. Ct. No. 94-166231
In
Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468 (Gerawan I), we
held that an agricultural producer’s right to free speech under article I, section 2,
subdivision (a) of the California Constitution (hereafter sometimes article I or the
free speech clause)1 was implicated by a program that compelled that producer to
fund generic advertising about various agricultural products. In so holding, we
parted company with the United States Supreme Court, which had held in
Glickman v. Wileman Brothers & Elliott, Inc. (1997) 521 U.S. 457 (hereafter
sometimes Glickman) that a similar generic advertising program did not implicate
the free speech clause of the First Amendment to the United States Constitution,
1
Article I, section 2(a) states: “Every person may freely speak, write and
publish his or her sentiments on all subjects, being responsible for the abuse of this
right. A law may not restrain or abridge liberty of speech or press.”
1
but rather was a kind of economic regulation outside the sphere of First
Amendment doctrine. The Gerawan I court did not, however, determine whether
compelled funding of the generic advertising program at issue violated article I nor
decide upon the proper test to be employed in making that determination. We left
that task to the Court of Appeal on remand.
The Court of Appeal concluded that the program to which plaintiff
Gerawan Farms, Inc. (Gerawan), objected was unconstitutional because, as
discussed below, it was not supported by a valid government interest, owing to the
fact that it had to be approved by a private association. We granted review
specifically to assess the validity of this holding and more generally to address the
constitutional questions remaining from Gerawan I. We conclude the compelled
funding of generic advertising in this case should be tested by the intermediate
scrutiny standard articulated by the United States Supreme Court in Central
Hudson Gas & Elec. v. Public Serv. Comm’n (1980) 447 U.S. 557 (Central
Hudson), and that remand for further factfinding is required to determine whether
the program at issue is constitutional. We conclude as well the Secretary of Food
and Agriculture’s (Secretary) claim that the generic advertising in question is
constitutional because it is government speech also cannot be resolved on the
pleadings and requires further factfinding. We also reaffirm our holding in
Gerawan I that the marketing program in question does not violate the First
Amendment, rejecting Gerawan’s argument that the holding requires revision in
light of the United States Supreme Court’s most recent pronouncement on the
compelled funding of generic advertising in United States v. United Foods, Inc.
(2001) 533 U.S. 405 (United Foods).
I. FACTUAL BACKGROUND
Much of the factual background to this case may be found in Gerawan I.
We began our analysis by discussing the legislative framework of the California
2
Plum Marketing Program, which was enacted pursuant to the California Marketing
Act of 1937 (CMA). As Gerawan I explained, the CMA and its federal
counterpart, the Agricultural Marketing Agreement Act of 1937 (AMAA), were
legislative responses to the severe problems that the agricultural sector of the
economy found itself facing, which were exacerbated by the Great Depression.
These programs were rooted in the considered legislative judgment that
government intervention in agricultural markets was necessary to preserve the
agricultural industry. (See Gerawan I, supra, 24 Cal.4th at pp. 476-477; see also,
id., pp. 524-525 (dis. opn. of George, C. J.).)
As elaborated by the Court of Appeal in Voss v. Superior Court (1996) 46
Cal.App.4th 900, 907, the CMA “grew out of the chaotic conditions which
characterized California agriculture during the early part of the twentieth century.
[Citation.] Before the promulgation of the CMA, each of California’s many fruit
and vegetable growers attempted to be the first in the market with his or her
commodity, in order to take advantage of the premium prices paid on early
shipments. This led to the marketing of inadequately ripened produce, and the
glutting of the market during the peak season with poor quality commodities.
Deceptive packaging, improper sampling, and false grading were often resorted to
in order to attempt to enhance the attractiveness of the produce. This ‘unregulated
scramble’ had an ‘adverse effect upon consumer acceptance of California fruits
and vegetables,’ and the unstable and fluctuating markets ‘had an exaggerated
impact on the livelihood of’ the state’s agricultural producers. [Citation.] The
depression of 1929-1933 only exacerbated these problems; the prices paid to
growers ‘plummeted.’ [Citation.]”
Specifically, like the AMAA, “the CMA authorized . . . the Secretary of
Food and Agriculture . . . to enter into ‘marketing agreements,’ i.e., contract-like
arrangements with the producers and handlers of agricultural commodities
3
concerning marketing matters, which would be binding, expressly, only on those
signatory thereto, and would be exempt, impliedly, from all state antitrust laws.”
(Gerawan I, supra, 24 Cal.4th at p. 478.)
“[T]he CMA [also] authorized the [Secretary] to issue ‘marketing orders,’
i.e., regulations governing marketing matters for the producers and handlers of
agricultural commodities, which did the following: provided for participation in
the administration of such orders by the regulated producers and handlers
themselves; substantially restricted the terms of such orders generally to, among
others, the determination of the existence and extent of any surplus, the limitation
on total quantity marketed, the allotment of amounts for purchase, the allotment of
amounts for marketing, the regulation of periods for marketing, the establishment
of reserve pools, the institution of grading and standards, and, impliedly, the
conduct of research; and mandated that the regulated producers and handlers had
to contribute funds to cover related expenses. . . .
“But, unlike the AMAA, the CMA authorized the [Secretary] to impose,
among the terms of such a marketing order, the establishment of ‘plans for
advertising and sales promotion to create new or larger markets for agricultural
commodities,’ specifically, plans that are ‘directed toward increasing the sale of
such commodity without reference to a particular brand,’ etc. (Stats. 1937, ch.
404, § 1, pp. 1335-1336.) It mandated that the regulated producers and handlers
subject to a marketing order with such a term had to contribute funds to cover
related expenses.” (Gerawan I, supra, 24 Cal.4th at pp. 478-479.)
At controversy here, as in Gerawan I, is a 1994 marketing order issued by
the Secretary pursuant to the CMA, entitled the California Plum Marketing
Program. As Gerawan I described the program, according to Gerawan’s first
amended complaint: “The California Plum Marketing Program provides for the
establishment of a California Plum Marketing Board, which is virtually filled with,
4
and totally controlled by, producers and/or producer-handlers of the fruit. In
addition, and among other things, it provides for the board’s administration of its
terms. It also provides for the board’s undertaking of activities extending to
research; advertising, specifically generic advertising, along with sales promotion
and market development; and the institution and implementation of quality
standards and inspections. It provides as well for the board’s assessment of funds
from producers for expenses related to the foregoing activities, at a rate that may
not exceed $0.20 per 28-pound box, including $0.02 for research, $0.11 for
generic advertising along with sales promotion and market development, and
$0.07 for quality standards and inspections.” (Gerawan I, supra, 24 Cal.4th at p.
480.)
It was the assessment of producers to pay for generic advertising that was
the subject of the constitutional challenge. “On October 31, 1994, Gerawan
Farming, Inc., filed a complaint for declaratory and injunctive relief in the
Superior Court of Tulare County against, among others, the California Secretary
of Food and Agriculture in his official capacity, . . . . It challenged the California
Plum Marketing Program, which was issued by the secretary pursuant to the
CMA, under provisions including the free speech clause of the First Amendment
to the United States Constitution and the free speech clause of subdivision (a) of
section 2 of article I of the California Constitution. It . . . alleged facts, liberally
construed, to the following effect: It produces and handles plums; . . . it has
developed, and uses, a brand for marketing purposes; it engages in commercial
speech about its own branded plums through advertising; its message is not false
or misleading; nonetheless, the California Plum Marketing Program compels it to
fund commercial speech in the form of generic advertising about plums as a
commodity against its will, and does so to some appreciable extent; the
compulsion of funding reduces the amount of money available for its own
5
advertising; the generic advertising, otherwise undescribed, ‘reflect[s] . . .
viewpoints,’ political and ideological as well as commercial, ‘to which it does not
subscribe,’ and indeed with which it ‘vehemently disagrees.’
“Subsequently,
in
Glickman, a majority of the United States Supreme
Court, in an opinion by Justice Stevens, concluded that Marketing Order No. 917,
which was issued by the United States Secretary of Agriculture pursuant to the
AMAA, did not implicate the right of parties including Gerawan to freedom of
speech under the First Amendment by compelling funding of generic advertising.
(Glickman v. Wileman Brothers & Elliott, Inc., supra, 521 U.S. at pp. 467- 477.)
They indicated that, had such a right been implicated, the appropriate standard for
use in determining whether it had been violated would have been the test of Abood
v. Detroit Board of Education (1977) 431 U.S. 209 . . . and its progeny, including
Keller v. State Bar of California (1990) 496 U.S. 1 . . . , which had not been used
by the court below which ‘involv[es] the compelled funding of speech’
generally [citation] and not the test of Central Hudson Gas & Elec. v. Public
Serv. Comm’n (1980) 447 U.S. 557 . . . , which had been used by the court below
which ‘involve[s] a restriction on commercial speech’ [citation]. . . .
“The Secretary of Food and Agriculture moved for judgment on the
pleadings on the ground that Gerawan’s complaint did not allege facts sufficient to
constitute a cause of action. By order, the superior court granted the motion, but
with leave to amend.
“Gerawan
proceeded
to
file an amended complaint. It challenged the
California Plum Marketing Program under provisions including article I’s free
speech clause. It again alleged facts reflecting the historical, statutory, and
administrative background, as set out above. [I]t also alleged [additional] facts,
liberally construed, to the following effect: . . . the California Plum Marketing
Program compels it to fund commercial speech in the form of generic advertising
6
about plums as a commodity against its will, and does so in excess of $80,000 per
year; the compulsion of funding reduces the amount of money available for its
own advertising; it ‘disagrees’ with, and indeed ‘abhors,’ the generic advertising,
otherwise undescribed, both on political and ideological grounds, as ‘socialistic’
and ‘collectivist,’ and also on commercial grounds, as ‘grouping all . . . plums as
though they are the same’ and as ‘embarrassingly silly, idiotic and/or totally
ineffective.’ ” (Gerawan I, supra, 24 Cal.4th at pp. 480-482, fn. omitted.)
The Secretary again moved for judgment on the pleadings and the superior
court granted it, without leave to amend, stating that Gerawan “ ’cite[d] no
authority for its argument that the California Constitution extends protections
against compelled speech . . . greater than those provided in the United States
Constitution which the United States Supreme Court [in Glickman] has held were
not violated by’ Marketing Order No. 917, which it said was ‘not substantively
distinguishable from’ the California Plum Marketing Program.” (Gerawan I,
supra, 24 Cal.4th at p. 482.)
The Court of Appeal upheld the trial court. This court reversed. As stated
above, this court disagreed with Glickman’s conclusion that the compelled funding
scheme of the California Plum Marketing Program does not implicate free speech,
at least with respect to article I. But the court declined to address whether the
program actually violated the free speech clause. Nor did it set forth the proper
test for determining such violation, leaving those matters for the Court of Appeal
on remand. (Gerawan I, supra, 24 Cal.4th at pp. 515-517.)
The Court of Appeal, in a two-to-one decision, held that the plum
marketing program did indeed violate article I. The majority found it unnecessary
to decide precisely which legal standard to employ. Rather, it held, as will be
discussed at greater length below, that the program’s compelled funding of generic
advertising could not be constitutionally justified under any of the possible free
7
speech tests because such generic advertising did not advance a valid government
interest. The principal ground for this conclusion was that the determination
whether to conduct the generic advertising program had been and could only be
decided by a referendum of the agricultural growers, not by a governmental
agency. As the court stated: “In the absence of an affirmative vote adopting a
program, the Secretary has no power to implement the program, regardless how
overwhelming the state’s interest in addressing current conditions.”
Justice Levy dissented, arguing essentially that the “germaneness” test
proposed by Abood v. Detroit Board of Education, supra, 431 U.S. 209 (Abood),
and Keller v. State Bar of California, supra, 496 U.S. 1 (Keller), to determine
whether compelled funding of speech was constitutional should apply in the
present case, and that referendum-approval procedures did not diminish the
importance of the government interest. He would have remanded the case to the
trial court for further development of the factual record. We granted review.
II.
DISCUSSION
A. The Proper Constitutional Test
There are several cases critical to our understanding of the present case and
to the formulation of the proper test for determining whether the California Plum
Marketing Program’s mandatory fee to finance its generic advertising program
violates article I. We review these cases below.
1.
Abood and Keller
Abood and Keller are the cornerstones of United States Supreme Court
jurisprudence regarding government-compelled funding of private speech. In
Abood, supra, 431 U.S. 209, dissident teachers objected to being charged
mandatory union dues, pursuant to a state statute, claiming this charge violated
their First Amendment rights. The court recognized that these mandatory
8
assessments did indeed have an impact upon the dissident employees’ First
Amendment interests, but would nonetheless be constitutional under some
circumstances. “An employee may very well have ideological objections to a
wide variety of activities undertaken by the union in its role as exclusive
representative. His moral or religious views about the desirability of abortion may
not square with the union’s policy in negotiating a medical benefits plan. One
individual might disagree with a union policy of negotiating limits on the right to
strike . . . while another might have economic or political objections to unionism
itself. . . . The examples could be multiplied. To be required to help finance the
union as a collective-bargaining agent might well be thought, therefore, to
interfere in some way with an employee’s freedom to associate for the
advancement of ideas, or to refrain from doing so, as he sees fit. But . . . such
interference as exists is constitutionally justified by the legislative assessment of
the important contribution of the union shop to the system of labor relations
established by Congress. . . . ‘As long as [the union] act[s] to promote the cause
which justified bringing the group together, the individual cannot withdraw his
financial support merely because he disagrees with the group’s strategy.’ ”
(Abood, supra, at pp. 222-223, fn. omitted.)
On the other hand, the balance between First Amendment right and a
government interest tips the other way when the government would compel an
employee to fund union activity devoted to “an ideological cause” not directly
related to the union’s primary, collective bargaining function. (Abood, supra, 431
U.S. at p. 235.) “We do not hold that a union cannot constitutionally spend funds
for the expression of political views, on behalf of political candidates, or toward
the advancement of other ideological causes not germane to its duties as
collective-bargaining representative. Rather, the Constitution requires only that
such expenditures be financed from charges, dues, or assessments paid by
9
employees who do not object to advancing those ideas and who are not coerced
into doing so against their will by the threat of loss of governmental employment.”
(Id. at pp. 235-236, fn. omitted.)
In Keller, supra, 496 U.S. 1, the court extended Abood’s rationale to
mandatory fees charged by the State Bar of California: “Abood held that a union
could not expend a dissenting individual’s dues for ideological activities not
‘germane’ to the purpose for which compelled association was justified: collective
bargaining. Here the compelled association and integrated bar are justified by the
State’s interest in regulating the legal profession and improving the quality of legal
services. The State Bar may therefore constitutionally fund activities germane to
those goals out of the mandatory dues of all members. It may not, however, in
such manner fund activities of an ideological nature which fall outside of those
areas of activity.” (Keller, supra, 496 U.S. at pp. 13-14.)
2.
Gerawan I and Glickman
In
Gerawan I, supra, 24 Cal.4th 468, the court recognized that a program
very similar to the one at issue in this case had been upheld as constitutional under
the First Amendment in Glickman, supra, 521 U.S. 457, in which Gerawan itself
had been a plaintiff. Gerawan I’s discussion and critique of Glickman is central to
the resolution of this case and will be reviewed at length.
Gerawan I characterized Glickman as follows: “In Glickman, a majority
sustained Marketing Order No. 917, issued by the United States Secretary of
Agriculture pursuant to the AMAA against a challenge by Gerawan, among
others, that it violated their First Amendment right to freedom of speech by
compelling funding of generic advertising.
“At the outset, the Glickman majority ‘stress[ed] the importance of the . .
context’ established by the AMAA. (Glickman v. Wileman Brothers & Elliott,
10
Inc., supra, 521 U.S. at p. 469.) They also emphasized that Marketing Order No.
917 was a ‘detailed’ ‘regulatory scheme’ that had ‘displaced many aspects of
independent business activity that characterize other portions of the economy in
which competition is fully protected by the antitrust laws.’ (Ibid.) It ‘compelled’
Gerawan and the rest ‘to fund the generic advertising at issue . . . as a part of a
broader collective enterprise in which their freedom to act independently’ was
‘already constrained.’ (Glickman v. Wileman Brothers & Elliott, Inc., supra, 521
U.S. at p. 469.) [¶] . . . [¶]
“The
Glickman majority went on to conclude that Marketing Order No. 917
did not even implicate, still less violate, the First Amendment right of Gerawan
and the rest to freedom of speech by compelling funding of generic advertising.
(See Glickman v. Wileman Brothers & Elliott, Inc., supra, 521 U.S. at pp. 468,
473-474, fn. 16, & 476.) They considered the marketing order in question as
merely a ‘species of economic regulation,’ no more and no less, without any effect
on the right at issue. (Id. at p. 477.) They ‘presume[d]’ that Gerawan and the rest
‘agree[d] with the central message of the speech that [was] generated by the
generic [advertising].’ (Id. at p. 470.) They did not measure the marketing order
against the right, but rather purported to ‘distinguish’ the former out of the latter’s
scope. (Id. at p. 469.)” (Gerawan I, supra, 24 Cal.4th at pp. 499-500, fn.
omitted.)
As recounted in Gerawan I, the Glickman court explained that the order
neither restricted plaintiffs from speaking nor compelled them to speak. Most
importantly, the Glickman majority stated that the order “did not ‘compel’ any
person to fund any ‘political or ideological’ speech (Glickman v. Wileman
Brothers & Elliott, Inc., supra, 521 U.S. at pp. 469-470): The generic advertising
amounted only to commercial speech, ‘encouraging consumers to buy’ the fruit
indicated [citation]; it could not be ‘said to engender any crisis of conscience’ in
11
political or ideological matters [citation] or to ‘conflict with’ anyone’s ‘ “freedom
of belief” ’ ‘in such areas [citation]; any objection against the generic advertising
as political or ideological in character, for instance, as ‘promot[ing] . . . “socialistic
programs” ’ [citation], was ‘trivial’ [citation]. Indeed, decisions such as Abood
and its progeny, including Keller, stand for the proposition that a person who has
lawfully been compelled to associate with others may be compelled to fund even
political or ideological speech, without suffering a violation of his First
Amendment right to freedom of speech, if the political or ideological speech in
question is ‘ “germane” to the purposes’ that ‘ “justified” ’ the ‘ “compelled
association” ’ in the first place. [Citation.]” (Gerawan I, supra, 24 Cal.4th at p.
501.)
As we recognized in Gerawan I, Glickman also concluded that even if
Marketing Order No. 917 did implicate plaintiffs’ First Amendment rights, it did
not violate them. “The ‘test’ of Abood and Keller would ‘clearly’ be ‘satisfied in
this case because . . . the generic advertising . . . is unquestionably germane to the
purposes of the marketing order[] . . . .’ (Glickman v. Wileman Brothers & Elliott,
Inc., supra, 521 U.S. at p. 473.)” (Gerawan I, supra, 24 Cal.4th at p. 501.)
Finding the marketing program at issue in Gerawan I “not materially different”
from the one in Glickman, at least for First Amendment purposes, (Gerawan I,
supra, 24 Cal.4th at p. 508), the Gerawan I court held that program did not
implicate, much less violate, the First Amendment. (Gerawan I, supra, 24 Cal.4th
at p. 497.)
Turning to the California Constitution’s free speech clause, the court found
that the marketing program did indeed implicate that clause. It found article I’s
right to freedom of speech distinctive from the First Amendment right, as
construed by the Glickman court, on essentially two grounds.
12
First, the court found Glickman, on its own terms, unpersuasive. It noted
the extensive criticism that the Glickman court had received in concluding that the
marketing order at issue did not even implicate the First Amendment. (See
Gerawan I, supra, 24 Cal.4th at pp. 501-505, 511-512.) The Gerawan I court
opined that Glickman’s “legal component is driven not so much by principled
reasoning as by ad hoc distinguishing. Its factual component is hardly better.”
The court, for example, found the Glickman majority’s presumption that Gerawan
and the rest “ ’agree[d] with the central message of the speech that [was] generated
by the generic [advertising], Glickman v. Wileman Brothers & Elliott, Inc., supra,
521 U.S. at p. 470,’ . . . betray[ed] a certain lack of sophistication,” Gerawan I
found, principally because producers who seek to develop their own brands may
have that effort undermined by generic advertising and may therefore be said to
disagree with that advertising. (Gerawan I, supra, 24 Cal.4th at pp. 503-504.)
The court found more persuasive the reasoning of Justice Souter’s dissent:
“Justice Souter observed that the First Amendment’s right to freedom of speech
does not bar compelling a speaker to fund speech that he otherwise would not fund
only when such speech would be political or ideological in character only
when, in other words, it would ‘engender’ in him a ‘crisis of conscience’
(Glickman v. Wileman Brothers & Elliott, Inc., supra, 521 U.S. at p. 472) or
‘conflict with’ his ‘ ”freedom of belief” ’ in such areas [citation]: Prior decisions
such as Abood and its progeny including Keller happened to arise in the context of
political or ideological speech a mere ‘fortuity’ but did not bar their
application to commercial speech. (Glickman v. Wileman Brothers & Elliott, Inc.,
supra, 521 U.S. at p. 488 (dis. opn. of Souter, J.).) The fact that, under such
decisions, a person who has lawfully been compelled to associate with others may
be compelled to fund even political or ideological speech without suffering a
violation of the right in question does not mean that he can be so compelled
13
without experiencing any implication of the right at all. [Citation.]” (Gerawan I,
supra, 24 Cal.4th at p. 502.) The Gerawan I court noted that the weight of
scholarly authority appeared to side with Justice Souter’s Glickman dissent, at
least as to whether Marketing Order No. 917 implicated the First Amendment.
(Gerawan I, supra, 24 Cal.4th at pp. 504-505.)
The second basis for Gerawan I’s departure from Glickman lay in the
differences between article I and the First Amendment. Citing well-established
case law, the Gerawan I court reaffirmed that article I’s free speech clause is
“ ’broader’ and ‘greater’ ” than the First Amendment. (Gerawan I, supra, 24
Cal.4th at p. 491.) More specifically, “article I’s right to freedom of speech,
unlike the First Amendment’s, is ‘unlimited’ in scope. [Citations.] Whereas the
First Amendment does not embrace all subjects, article I does indeed do so, in
ipsissimis verbis: ‘Every person may freely speak, write and publish his or her
sentiments on all subjects . . . .’ ” (Id. at p. 493, italics in Gerawan I.) The
reference to “all subjects” obviously included commercial speech and therefore
encompassed programs that compelled funding of speech. (Ibid.)
The historical circumstances surrounding the adoption of the predecessor to
article I in 1849 also supported this conclusion. “In California . . . in 1849, the
prevailing political, legal, and social culture was that of Jacksonian democracy.
[Citations.] Jacksonian democracy was animated by ‘ideals of equality and open
opportunity.’ [Citation.] Those ideals worked themselves out in a ‘liberal,
market-oriented, economic individualism.’ [Citation.] What such individualism
presupposed, and produced, was wide and unrestrained speech about economic
matters generally, including, obviously, commercial affairs.” (Gerawan I, supra,
24 Cal.4th at pp. 494-495.) The court further concluded that nothing in the history
of the subsequent amendments to that section of the California Constitution in
1879, 1974, and 1980 evinced an intent to change the original understanding of the
14
1849 Constitution with respect to commercial speech. (Gerawan I, supra, 24
Cal.4th at pp. 495-497.)
An examination of the briefs in the present case, both of the parties and
amicus curiae, reveals considerable disagreement about the meaning of Gerawan
I. In particular, Gerawan and his amicus argue that Gerawan I stands for the
proposition that commercial speech receives the same protection as political and
ideological speech under article I, section 2(a) that is, it is subject to the
strictest scrutiny. The Secretary and his amicus curiae dispute this point. Part of
this confusion may stem from the fact that while Gerawan I’s discussion of article
I, section 2(a) and its history is broad and far ranging, its actual holding is
extremely narrow. As the Gerawan I court stated: “Our conclusion, however,
brings no conclusion to this cause. That the California Plum Marketing Program
implicates Gerawan’s right to freedom of speech under article I does not mean that
it violates such right. But it does indeed raise the question. That question, in turn,
raises others, including what test is appropriate for use in determining a violation.
And that question, in its turn, raises still others as well, including what protection,
precisely, does article I afford commercial speech, at what level, of what kind,
and, perhaps ‘most difficult,’ subject to what test. [Citation.] To address such
questions belongs, in the first instance, to the Court of Appeal on remand.”
(Gerawan I, supra, 24 Cal.4th at p. 517, first two italics added.)
Thus, contrary to Gerawan’s and amicus curiae’s arguments, Gerawan I
takes no position on the sort of constitutional protection the rights at issue in this
case should receive. All the court held in Gerawan I is that a program that
requires agricultural producers to fund nongovernmental commercial speech
implicates article I’s free speech clause, and that a court must conduct some
unspecified inquiry into whether the program violates that clause. Although the
Gerawan I court engaged in a general historical discussion, quoted in part above,
15
in support of the position that compelled subsidization of commercial speech
implicates the free speech clause (Gerawan I, supra, 24 Cal.4th at pp. 494-497),
no specific constitutional test can be derived from that discussion.
3.
United Foods
The United States Supreme Court further clarified its Glickman decision in
United Foods, supra, 533 U.S. 405. In United Foods, the court considered the
constitutional validity of a program authorized by the Mushroom Promotion,
Research and Consumer Information Act (7 U.S.C. § 6101 et seq.) In practice,
the program established pursuant to the act was almost exclusively for the purpose
of subsidizing generic advertising. (United Foods, supra, 533 U.S. at p. 415.) In
considering the constitutional validity of the program, the court acknowledged that
the standards employed for determining the validity of restrictions on commercial
speech were less exacting than for other forms of expression, citing the test found
in Central Hudson, supra, 447 U.S. 557, and recognized that the test had been
subject to criticism by members of the court. (United Foods, supra, 533 U.S. at
pp. 409-410.) The court declined to resolve that controversy, stating that “even
viewing commercial speech as entitled to lesser protection, we find no basis under
either Glickman or our other precedents to sustain the compelled assessments
sought in this case.” (Id. at p. 410.)
United Foods began its analysis by affirming the principle that the First
Amendment may, under certain circumstances, prohibit “compelling certain
individuals to pay subsidies for speech to which they object,” relying on Abood
and Keller. (United Foods, supra, 533 U.S. at p. 410.) As the United Foods court
further affirmed: “The fact that the speech is in aid of a commercial purpose does
not deprive respondent of all First Amendment protection . . . .” (Ibid.) The court
then turned to what it viewed as the key distinction between the case before it and
16
Glickman. In Glickman, the compelled subsidy of speech was part of a detailed
marketing order that had “ ’displaced competition’ to such an extent that [it was]
‘expressly exempted from the antitrust laws.’ ” (United Foods, supra, 533 U.S. at
p. 412.) “Given that producers were bound together in [a] common venture, the
imposition upon their First amendment rights caused by using compelled
contributions was, as in Abood and Keller, in furtherance of an otherwise
legitimate program.” (United Foods, supra, 533 U.S. at pp. 414-415.)
“The statutory mechanism as it relates to handlers of mushrooms is
concededly different from the scheme in Glickman; here the statute does not
require group action, save to generate the very speech to which some handlers
object. In contrast to the program upheld in Glickman, . . . there is no broader
regulatory system in place here. We have not upheld compelled subsidies for
speech in the context of a program where the principal object is speech itself. . . .
The only program the Government contends the compelled contributions serve is
the very advertising scheme in question. Were it sufficient to say speech is
germane to itself, the limits observed in Abood and Keller would be empty of
meaning and significance.” (United Foods, supra, 533 U.S. at p. 415.)
The
United Foods court rejected the government’s argument that the Abood
line of cases was concerned only with compelled subsidization of political speech
or speech that violated the “freedom of belief.” (United Foods, supra, 533 U.S. at
p. 413.) “Before addressing whether a conflict with freedom of belief exists, a
threshold inquiry must be whether there is some state imposed obligation which
makes group membership less than voluntary; for it is only the overriding
associational purpose which allows any compelled subsidy for speech in the first
place.” (Ibid.)
Thus,
although
United Foods did not purport to overrule Glickman, and
indeed took pains to distinguish Glickman, it appears to have modified Glickman’s
17
holding in this sense: United Foods holds that the compelled funding of
commercial speech does not violate the First Amendment if it is part of a larger
marketing program, such as was the case in Glickman, and if the speech is
germane to the purpose of the program. But that being the case, compelled
funding of commercial speech must be said to implicate the First Amendment, i.e.,
such compelled funding requires a particular constitutional inquiry along the lines
of Abood and its progeny. In other words, the United States Supreme Court
appears to have distanced itself from Glickman’s conclusion that the generic
advertising program does not implicate commercial speech because it does not
“engender any crisis of conscience.” (Glickman, supra, 521 U.S. at p. 472.) On
this point, the United States Supreme Court now seems to be in agreement with
Gerawan I. Furthermore, because the United Foods court did not overrule
Glickman, the latter case can now most sensibly be read as simply holding that
Market Order No. 917 did not violate the First Amendment because it passed the
Abood test. (See Glickman, supra, 521 U.S. at pp. 472-473.)
Gerawan contends that the California Plum Marketing Program does not
pass the United Foods threshold. Gerawan made a very similar argument in its
last appearance before this court in Gerawan I, which we rejected. Anticipating
the distinction the high court recognized in United Foods, Gerawan quoted the
Glickman majority’s statement that Marketing Order No. 917 was a “ ’detailed’
‘regulatory scheme’ that had ‘displaced many aspects of independent business
activity that characterize other portions of the economy in which competition is
fully protected by the antitrust laws,’ and accordingly ‘compelled’ Gerawan and
the rest ‘to fund the generic advertising at issue . . . as a part of a broader
collective enterprise in which their freedom to act independently’ was ‘already
constrained.’ [Citation.] Gerawan then maintain[ed] that the California Plum
18
Marketing Program is not such a ‘detailed’ ‘regulatory scheme.’ ” (Gerawan I,
supra, 24 Cal.4th at p. 507.)
The
Gerawan I court rejected this argument. “Although plainly not
identical, the California Plum Marketing Program and Marketing Order No. 917,
so far as the Glickman majority’s analysis is concerned, are not materially
different. Marketing Order No. 917, among other things, provided for the
undertaking, by the Plum Commodity Committee, of research and development
projects, including advertising, and set out specific regulations regarding both fruit
containers and packs and also fruit grades and sizes. The California Plum
Marketing Program provides for the undertaking, by the California Plum
Marketing Board, of research; advertising, specifically generic advertising, along
with sales promotion and market development; and the institution and
implementation of quality standards and inspections. It appears that a federal
marketing order under the AMAA might have regulated more broadly and deeply
than a state marketing order under the CMA. But Marketing Order No. 917 did
not in fact regulate so much more broadly and deeply than the California Plum
Marketing Program.
“At bottom, Gerawan would have us characterize Marketing Order No. 917
as a regulation of economic activity with an incidental effect on speech and the
California Plum Marketing Program as a regulation of speech with an incidental
effect on economic activity. We cannot do so. Contrary to Gerawan’s assertion,
the fact that the California Plum Marketing Program earmarks 55 percent of the
funds assessed from producers for generic advertising along with sales promotion
and market development, with only 35 percent for quality standards and
inspections and only 10 percent for research, does not cause it to ‘stand[] alone . . .
19
as a regulation of speech.’ ” (Gerawan I, supra, 24 Cal.4th at p. 508, fn.
omitted.)2
In
fact,
Gerawan I explicitly distinguished the program in that case from
the Mushroom Promotion, Research, and Consumer Information Act of 1990 at
issue in United Foods, which, at the time Gerawan I issued was pending before
the United States Supreme Court: “In apparent contrast to both the AMAA and
the CMA is the Mushroom Promotion, Research, and Consumer Information Act
of 1990 [citation], which has been characterized as ‘basically a commercial
advertising statute designed to assess mushroom growers for the cost of
advertising’ (United Foods, Inc. v. U.S. (6th Cir. 1999) 197 F.3d 221, 222, fn. 1,
cert. granted Nov. 27, 2000 . . . .” (Gerawan I, supra, 24 Cal.4th at p. 507, fn. 9;
see also id., at p. 508, fn. 10.)
Gerawan continues to argue that the chief distinction between the
marketing orders in Glickman and in this case is that the former orders displaced
competition, whereas the latter does not. This assertion is incorrect. As Justice
Breyer noted in his dissent in United Foods: “Both then-existing federal
regulations and Justice Souter’s dissenting opinion make clear that, at least in
respect to some of [Glickman’s] marketing orders, price and output regulations,
while ‘authorized,’ were not, in fact, in place. See 7 CFR pts. 916, 917 (1997)
(setting forth container, packaging, grade, and size regulations, but not price and
output regulations); [Glickman, supra,] 521 U.S., at 500, n. 13 (Souter, J.,
2
Justice Brown’s concurring and dissenting opinion argues that the
percentage of funds actually earmarked for generic advertising could be
substantially higher than 55 percent. But Gerawan did not make any such
allegation in its pleadings nor make any such argument before this court. Nor do
we read United Foods to suggest that a marketing program is constitutionally
invalid whenever more than 50 percent of its assessment is allocated to generic
advertising.
20
dissenting) (noting that ‘the extent to which the Act eliminates competition varies
among different marketing orders’).” (United Foods, supra, 533 U.S. at p. 420
(dis. opn. of Breyer, J.).) This point is not controverted by the United Foods
majority, which, as noted, did not purport to overturn Glickman. We thus do not
understand United Foods as holding that the cooperative regulatory activity
displacing competition must take the form of price regulations or output
regulations in the strict sense. Rather, the cooperative regulations may simply
control the quality or size of the product, as was the case in Glickman but not in
United Foods. The California Plum Marketing Program, according to Gerawan’s
pleadings, is involved in that sort of activity and spends a substantial portion of its
assessment on developing and enforcing quality standards. Moreover, as we
recognized in Gerawan I, CMA marketing orders implicitly exempt those
participating in a marketing agreement from state antitrust laws (Gerawan I,
supra, 24 Cal.4th at p. 478), a factor found significant in Glickman and United
Foods. (See Glickman, supra, 521 U.S. at p. 461; United Foods, supra, 533 U.S.
at p. 412.)
Gerawan further argues that generic advertising is not necessary to the other
parts of the marketing program, such as quality standards. What is required,
however, is not necessity but germaneness. (See United Foods, supra, 533 U.S. at
pp. 414-416; Glickman, supra, 521 U.S. at p. 473.) Here, as in Glickman, “the
generic advertising of California [plums] is unquestionably germane to the
purposes of the marketing order” (Glickman, supra, at p. 473), i.e., germane to the
purpose of increasing the sale of particular California agricultural products.3
3
Gerawan cites four recent federal appellate cases that invalidated programs
of compelled contribution to generic advertising. It is clear that in three of the
cases, the court concluded that the program at issue was essentially a stand-alone
(footnote continued on next page)
21
In sum, as we concluded in Gerawan I, the program at issue in this case is
not materially different from the one that passed constitutional muster in
Glickman, which the United Foods majority expressly distinguished from the
program it found constitutionally deficient. (United Foods, supra, 533 U.S. at pp.
411-414.) We therefore conclude the compelled funding of speech by the
California Plum Marketing Program is part of a larger cooperative regulatory
program with substantial nonexpressive elements (see United Foods, supra, 533
U.S. at p. 413), and therefore crosses the United Foods threshold. Accordingly,
we reaffirm our holding in Gerawan I that the generic advertising program at issue
here does not violate the First Amendment.
4.
The Proper State Constitutional Test
As noted, the court in Glickman held that if the First Amendment had been
implicated, then the “test” of Abood and Keller would “clearly [be] satisfied in this
case because . . . the generic advertising . . . is unquestionably germane to the
purposes of the marketing order[] . . . .” (Glickman v. Wileman Brothers & Elliott,
(footnote continued from previous page)
commercial advertising program indistinguishable from the program invalidated in
United Foods. (See Cochran v. Veneman (3d Cir. 2004) 359 F.3d 263, 270 [“[t]he
Dairy Act is a stand-alone law that was not passed as part of any other federal
dairy regulatory scheme”]; Michigan Pork Producers Ass’n, Inc. v. Veneman (6th
Cir. 2003) 348 F.3d 157, 162-163 [“the Pork Act is nearly identical in purpose,
structure, and implementation” to the program invalidated in United Foods and
does not “permit or require the imposition of quality standards for pork . . .
products”]; Delano Farms Co. v. Cal. Table Grape Com’n. (9th Cir. 2003) 318
F.3d 895, 899 [about 90 percent of assessment spent on “generic promotional
activities” and no general marketing order is applicable except in one location].)
The United States Supreme Court has granted certiorari in the fourth case cited by
Gerawan, Livestock Marketing Ass’n v. U.S. Dept. of Agric. (2003) 335 F.3d 711,
certiorari granted May 24, 2004, No. 03-1164, __ U.S. __ [72 U.S.L.W. 3539].)
22
Inc., supra, 521 U.S. at p. 473.) As has been recognized, the standard employed
by the Glickman court was “plainly less exacting” than the intermediate scrutiny
test employed in testing the constitutionality of commercial speech restrictions.
(Gerawan I, supra, 24 Cal.4th at pp. 534-535 (dis. opn. of George, C.J.).) In light
of our recognition in Gerawan I that the generic advertising program does in fact
implicate the free speech clause, that is to say, a program of compelled
subsidization of generic advertising does interfere with the right protected under
the free speech clause and requires some justification for that interference, we
believe it would be incongruous to subject the program to only minimal scrutiny.
On this point we are partly persuaded by Justice Souter’s dissent in
Glickman, supra, 521 U.S. at page 474, wherein he points out that previous forays
into compelled funding of speech have involved areas in which the importance of
the government interest at stake and legitimacy of compelled association was
already well established. Commenting on the seminal case of Abood, supra, 431
U.S. 209, Justice Souter reasoned that the court had concluded some interference
with the First Amendment interests was “ ’constitutionally justified by the
legislative assessment of the important contribution of the union shop to the
system of labor relations established by Congress.’ [Citation]; see also Keller,
supra, [496 U.S. at pp.] 13-14 (‘[T]he State’s interest in regulating the legal
profession and improving the quality of legal services’ justifies ‘the compelled
association [inherent in the] integrated bar’). But this was simply a way of saying
that the government’s objective of guaranteeing the opportunity for a union shop,
the importance and legitimacy of which were already settled, [citations], could not
be attained without the incidental infringements of the interests in unfettered
speech and association that petitioners there claimed.” (Glickman, supra, 521 U.S.
at p. 484 (dis. opn. of Souter, J.).)
23
Justice Souter appears correct that an assumption underlying Abood and
Keller, albeit an implicit one, is that the interest justifying the compelled
association must be important, and that there be no effective alternative means of
achieving this interest with less intrusion on free speech rights. On the other hand,
the conclusion of the Glickman majority that the compelled funding of generic
advertising requires only minimal scrutiny is at variance with the general rule that
intrusion into free speech rights requires substantial justification, even when the
intrusion is incidental to the enforcement of a content-neutral law. (See O’Brien v.
United States (1968) 391 U.S. 367.) The requirement of substantial justification is
further supported by the fact that the right to free speech under the California
Constitution is in some respects “ ’broader’ and ‘greater’ ” than under the First
Amendment. (Gerawan I, supra, 24 Cal.4th at p. 491, and cases cited therein.)
Because generic advertising was not self-evidently incidental to the
functioning of some important, legislatively established institution, such as a union
shop or an integrated state bar as in Abood and Keller, Justice Souter argued for
treating compelled funding of such advertising the same as any other regulation
implicating the right of commercial speech, subjecting it to the test articulated in
Central Hudson, supra, 447 U.S. 557. That standard asks (1) ”whether the
expression is protected by the First Amendment,” which means that the expression
“at least must concern lawful activity and not be misleading”; (2) ”whether the
asserted governmental interest is substantial”; if yes to both, then (3) ”whether the
regulation directly advances the governmental interest asserted”; and (4) ”whether
it is not more extensive than is necessary to serve that interest.” (Id. at p. 566.)
We believe this intermediate standard appropriately protects the free speech rights
article I was designed to safeguard. Drawing on constitutional doctrine
summarized above, we conclude that the compelled funding of commercial speech
neither warrants application of the strictest scrutiny reserved for such matters as
24
the censorship or compelled utterance of noncommercial speech (see, e.g., Texas
v. Johnson (1989) 491 U.S. 397, 412; West Virginia Bd. of Ed. v. Barnett (1943)
319 U.S. 624, 642), nor can it pass muster simply because it is rationally based.
Turning to the present case, we apply the Central Hudson test to determine
whether this case can be resolved on the pleadings. As explained, we conclude it
cannot be and requires remand.
There can be no dispute that the first prong of the Central Hudson test
“whether the expression is protected by the First Amendment” (Central Hudson,
supra, 447 U.S. at p. 566) — should be resolved in Gerawan’s favor. After
Gerawan I, it is established that the right not to contribute financially to a
commercial message is protected by the free speech clause. Moreover, the right
Gerawan seeks to exercise has nothing to do with untruthful or misleading speech
on its part.
The second prong is whether the government interest is substantial.
(Central Hudson, supra, 447 U.S. at p. 566.) The government’s goal in promoting
generic advertising schemes is, in the words of the legislation explaining the
purpose of the CMA, to “[p]rovide methods and means for the maintenance of
present markets, or for the development of new or larger markets, for commodities
that are growing within this state . . . . (Food & Agr. Code, § 58654, subd. (d); see
Voss v. Superior Court, supra, 46 Cal.App.4th at pp. 907-908 [historical
experience with agriculture prompted legislative intervention to improve
agricultural markets].) We do not doubt, in the abstract, that the objective of
maintaining and expanding markets for agricultural products, thereby ensuring the
viability of California agriculture, is a substantial objective. (See Gerawan I,
supra, 24 Cal.4th at p. 524 (dis. opn. of George, C.J.) [explaining the unique
position agriculture holds in the state and national economy].) Moreover, as
discussed in the next part of this opinion, we reject the Court of Appeal’s position
25
that the government’s interest is not substantial simply because the CMA has
delegated the decision whether to create a marketing program in a given sector of
the agricultural economy to the agricultural producers themselves. This case
comes to us, however, on the pleadings. It cannot be definitively determined
whether the above-stated statutory goals are in fact the goals of the marketing
program at issue in this case, and further factfinding is required to ascertain the
nature of the government’s actual interest.
The third prong of the Central Hudson test is “whether the regulation
directly advances the governmental interest asserted.” (Central Hudson, supra,
447 U.S. at p. 566.) Here, “the State must demonstrate that the challenged
regulation ‘advances the Government’s interest “in a direct and material way.” ’
[Citation.] That burden . . . ‘ “is not satisfied by mere speculation or conjecture;
rather, a governmental body seeking to sustain a restriction on commercial speech
must demonstrate that the harms it recites are real and that its restriction will in
fact alleviate them to a material degree.” ’ ” (Florida Bar v. Went For It, Inc.
(1995) 515 U.S. 618, 625-626 (Went For It).)4 Moreover, in the First Amendment
intermediate scrutiny context, the government’s position must be supported not
merely by any evidence but by substantial evidence. (See Turner Broadcasting
System, Inc. v. FCC (1994) 512 U.S. 622, 666.) Given that this case has not
advanced beyond the pleading stage, there is as yet no evidence in the record to
support the government’s position that generic advertising is an efficacious means
of significantly improving the sale of agricultural products in this state.
Accordingly, the case must be remanded for further factfinding on that point.
4
We note that the Supreme Court in Went For It, supra, 515 U.S. 618, took
the first prong of the Central Hudson test as a given and so designated what we are
calling the third and fourth prongs of that test as the second and third prongs.
26
The fourth prong of the Central Hudson inquiry is “[w]hether [the
regulation] is not more extensive than is necessary to serve [the government]
interest.” (Central Hudson, supra, 447 U.S. at p. 566.) What this prong requires
“ ’is a “fit” between the legislature’s ends and the means chosen to accomplish
those ends . . . a fit that is not necessarily perfect, but reasonable; that represents
not necessarily the single best disposition but one whose scope is “in proportion to
the interest served,” that employs not necessarily the least restrictive means but . . .
a means narrowly tailored to achieve the desired objective.’ ” (Went For It, supra,
515 U.S. at p. 632.) Again, without an evidentiary record, we cannot say whether
alternative, less-speech-restrictive alternative programs would be less efficient or
effective in accomplishing the government’s objective. (See Glickman, supra, 521
U.S. at pp. 502-503 (dis. opn. of Souter, J. ) [discussing marketing programs that
give producers a choice whether to spend money on their own advertising or
generic advertising].) However, we reject Gerawan’s position that, as a matter of
law, the government always has an alternative means of encouraging plum sales
through subsidies drawn from general revenue. The government is not, per se,
constitutionally forbidden from funding a marketing program by the financial
contribution of those who benefit from it the most, rather than of the general
taxpaying public, any more than it is forbidden to fund a state bar association from
member dues rather than general revenues. (See Keller, supra, 496 U.S. at p. 12.)
In sum, we conclude this case must be remanded to the trial court for
further factfinding to determine whether the California Plum Marketing Program
is intended to promote the substantial government interest articulated in Food and
Agricultural Code section 58654, subdivision (d), whether the generic advertising
program at issue directly advances that interest and whether it is narrowly tailored
in light of the availability of less-speech-restrictive alternatives.
27
B. The Court of Appeal Opinion
The Court of Appeal majority did not decide what test was proper to
determine the constitutionality of the compelled funding of commercial speech.
Instead, the court reasoned that all tests presuppose that the compelled funding is
justified by a valid governmental interest. The court concluded that there was no
such valid governmental interest in the present case because the marketing
program must be approved by a majority of the growers: “The governmental
interest in the present . . . program is tenuous and is based on findings of necessity
that are wholly illusory, for a simple reason: under the current statute, the
government is forbidden to enact a remedial program no matter how severe an
economic crisis arises in the plum industry unless a majority of growers wants the
program.” (Italics in original.) As the Court of Appeal elaborated: “Under the
California Marketing Act, the Secretary . . . ‘shall’ hold a hearing to determine the
necessity for and terms of a marketing order if he ‘has reason to believe that the
issuance of a marketing order . . . will tend to effectuate the declared policy of this
chapter . . . .’ (Food & Agr. Code, § 58771.) However, even after the Secretary
makes findings of necessity for a marketing order (§ 58811), the growers are still
empowered to reject that finding by voting against a proposed regulatory program.
(§ 58993.) In the absence of an affirmative vote adopting a program, the Secretary
has no power to implement the program, regardless how overwhelming the state’s
interest in addressing current conditions: ‘If the director . . . [cannot] make the
finding that producers that are directly affected have approved the marketing order
. . . , he shall not make the marketing order . . . effective.’ (§ 58997, italics
added.)
“Under these circumstances, it matters not that the government might have
a substantial interest in instituting a regulatory program that retains the greatest
range of freedom for growers, rejecting price and production controls in favor of
28
advertising: in the absence of an affirmative and binding legislative or
administrative determination that intervention in the market processes in the first
instance is necessary, there is no legitimate basis for interference with the free
speech rights of dissenting growers.”
The Court of Appeal acknowledged that labor unions also generally
authorize expenditures only by a vote of the membership, but reasoned that such
programs are distinguishable from the program at issue in this case. “[I]t is readily
apparent that the governmental interest in a voluntary program in the field of labor
relations is far different from the governmental interest asserted in the field of
voluntarily established marketing orders. In the case of labor relations, the very
existence of a regulated structure in which workers can assert their demands and
grievances seeks, in and of itself, to preserve a measure of labor peace. The right
to act collectively to seek to organize in itself serves to protect workers from
oppressive, disruptive employer actions. Regulation of the right to act
collectively, in turn, protects employers from violence and overreaching by
workers. [Citation.] That a collective bargaining unit sometimes results from
concerted employee action is, of course, important; equally important, however, is
the existence of a structured environment in which employees can attempt to reach
that goal if they desire to do so.
“By contrast, there is no claim that the structure for petition and referendum
on marketing orders serves any societal interest beyond the mere facilitation of
decision making. The only aspect in which the government even asserts an
interest is the final product, the approved marketing order. Far from asserting a
public interest in the statutory structure for obtaining a marketing order, the
[CMA] provides that applicants for a marketing order may be required to privately
fund the ‘expenses of preparing and making effective such marketing order’ by
depositing funds with the Secretary. (§ 58961.) Only if the marketing order is
29
approved by referendum and implemented by the Secretary is the latter permitted
to reimburse the applicant for those expenses. This funding mechanism adopted by
the Legislature reflects a judgment that, until a marketing order is adopted, the
process of adoption primarily serves private interests.”
We find the Court of Appeal unpersuasive on this point a weakness that
is fatal to its conclusion. To be sure, the California Plum Marketing Board and the
labor union serve different interests. Membership participation within labor
unions ensures some degree of responsiveness to its members, which contributes
to labor peace. 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. (See Glickman, supra, 521 U.S. at p. 476.) Such participation may be a
legitimate means of furthering the government interest. “The CMA constitutes a
legislative entrustment of the power to regulate the marketing of agricultural
commodities to those who produce or otherwise deal with such products, subject
to the approval of the secretary.” (Voss v. Superior Court, supra, 46 Cal.App.4th
at p. 907.) As Justice Levy wrote in dissent to the Court of Appeal opinion:
“[T]he Legislature has merely recognized its own limitations and has therefore
entrusted certain aspects of the regulation of the agricultural commodities market
to those who better understand the industry . . . .”
Indeed, the effect of the Court of Appeal’s holding would be to conclude
that a government interest becomes unimportant or less important when decisions
about how to accomplish that interest are delegated to those most affected by those
decisions. Not only is there no authority for that position, but it is inconsistent
with this court’s long recognition of the legitimacy of such delegation. (See Brock
v. Superior Court (1937) 9 Cal.2d 291, 299 [predecessor of the CMA “not invalid
merely because it provides for consent of interested persons to the contemplated
30
regulation”].) We therefore conclude that the partial delegation of authority for
the creation of generic advertising programs to agricultural producers does not by
itself constitutionally invalidate such programs. Of course, the government must
still show that the marketing program, as presently constituted, serves a substantial
public interest and not merely private interests.
C. The Government Speech Argument
The Secretary argues at length the generic advertising at issue here is a
form of government speech subject to a very deferential constitutional standard of
review. (See Keller, supra, 496 U.S. at pp. 12-13.) The Secretary’s principal
argument is that he must ultimately approve any generic advertising issued by the
California Plum Marketing Board, which is itself organized pursuant to statute,
and that therefore the speech is actually that of the State of California rather than
of a private association.
Gerawan claims on the other hand that the Secretary’s approval is a mere
formality, that generic advertising is not authentically government speech because
it is funded by agricultural producers rather than taxpayers and originates from and
is ultimately approved by those producers rather than the government. Gerawan
also contends that Gerawan I considered and rejected the government speech
argument and that conclusion remains the law of the case.
In
Gerawan I we stated: “Whether, and how, article I’s free speech clause
may accommodate government speech [citation] is a question that we need not,
and do not, answer. In its amended complaint, Gerawan did not allege facts that
would show that generic advertising under the California Plum Marketing
Program which is not so much a mechanism of regulation of the producers and
handlers of an agricultural commodity by a governmental agency, as a mechanism
of self-regulation by the producers and handlers themselves amounts to speech
31
of this sort. Neither did the Secretary of Food and Agriculture so claim in his
motion for judgment on the pleadings. At oral argument, counsel for certain of the
amici curiae supporting the secretary’s position attempted to raise the point. Too
little, too late.” (Gerawan I, supra, 24 Cal.4th at p. 515, fn. 13.)
Of course, our conclusion in Gerawan I with respect to the government
speech issue was based on Gerawan’s pleading. Because we conclude that this
case must be remanded for further factfinding, the government will have an
opportunity to prove that the speech at issue was in fact government speech.
The kind of showing the government would be required to make has been
suggested by the United States Supreme Court. In United Foods the court, in
declining to consider a similar government speech argument on the grounds that
the issues was not raised before the federal Court of Appeals, noted that “although
the Government asserts that advertising is subject to approval by the Secretary of
Agriculture, respondent claims the approval is pro forma. This and other difficult
issues would have to be addressed were the program to be labeled, and sustained,
as government speech.” (United Foods, supra, 433 U.S. at p. 417.)
In
Keller, the court rejected the argument that the State Bar’s speech
amounted to government speech and stated: “The State Bar of California is a good
deal different from most other entities that would be regarded in common parlance
as ‘governmental agencies.’ Its principal funding comes, not from appropriations
made to it by the legislature, but from dues levied on its members by the board of
governors. Only lawyers admitted to practice in the State of California are
members of the State Bar, and all 122,000 lawyers admitted to practice in the State
must be members. Respondent undoubtedly performs important and valuable
services for the State by way of governance of the profession, but those services
are essentially advisory in nature.” (Keller, supra, 496 U.S. at p. 11, fn. omitted.)
Moreover, other courts considering the issue have found significant whether the
32
commercial speech in question is attributed to the government or to the
agricultural producers. (See Cochran v. Veneman, supra, 359 F.3d at pp. 273-
274.)
In the present case, the marketing board is comprised of and funded by
plum producers, and is in that respect similar to the State Bar. But, as United
Foods suggests, the speech may nonetheless be considered government speech if
in fact the message is decided upon by the Secretary or other government official
pursuant to statutorily derived regulatory authority. Because there are factual
questions that may be determinative of the outcome for example, whether the
Secretary’s approval of the marketing board’s message is in fact pro forma,
whether the marketing board is in de facto control of the generic advertising
program, and whether the speech is attributed to the government this issue
cannot be resolved on the pleadings and requires further factfinding.
III. DISPOSITION
The Court of Appeal reversed the trial court’s judgment on the pleadings in
favor of the government. We affirm this portion of the Court of Appeal’s opinion.
The Court of Appeal also stated in its disposition: “The matter is remanded to the
trial court for trial and determination of the amount of assessments allocated to
speech functions of the California Plum Marketing Board. Appellant is entitled to
an injunction prohibiting enforcement of assessments against objecting growers
and handlers to the extent those assessments are for speech-related purposes as
described above. Appellant is entitled to its costs on appeal.” We reverse this
33
portion of the Court of Appeal’s judgment, and instead remand for proceedings
consistent with the views expressed in this opinion.
MORENO, J.
WE CONCUR: GEORGE, C. J.
WERDEGAR,
J.
CHIN,
J.
34
CONCURRING AND DISSENTING OPINION BY KENNARD, J.
At issue here is whether compelled funding of commercial speech violates
plaintiff’s free speech rights under the federal and state Constitutions. (U.S.
Const., 1st Amend.; Cal. Const., art. I, § 2, subd. (a).) With respect to the
California Constitution, I agree with the majority that the applicable test is the one
articulated by the high court in Central Hudson Gas & Elec. Corp. v. Public Serv.
Comm’n (1980) 447 U.S. 557 (Central Hudson). And I agree with the majority’s
remand of that state constitutional issue to the trial court for fact finding regarding
the details of the generic advertising program in question here. In addition, I agree
with the majority’s reconsideration of our earlier determination that the challenged
program does not violate the First Amendment. (See Gerawan Farming, Inc. v.
Lyons (2000) 24 Cal.4th 468, 497 (Gerawan I).) But I disagree with the
majority’s conclusion that the facts alleged here are insufficient to state a violation
of the First Amendment.
I.
This case is similar to several lawsuits filed by others across the nation
challenging on free speech grounds certain agricultural marketing programs. At
issue in these cases are government-sanctioned agricultural programs that require
growers or distributors to fund “generic” advertising, that is, advertising that urges
the public to buy an agricultural commodity such as mushrooms or plums without
distinguishing the products of any particular grower or distributor. The first case
1
to reach the United States Supreme Court was Glickman v. Wileman Brothers &
Elliott, Inc. (1997) 521 U.S. 457 (Glickman). In that case, which arose out of
California, the high court concluded that two tree fruit marketing orders were
merely “a species of economic regulation” that did not implicate the First
Amendment rights of the objecting growers and distributors. (Id. at p. 477.) Four
years later, the high court decided United States v. United Foods, Inc. (2001) 533
U.S. 405 (United Foods), in which the court struck down a federal program that
required mushroom distributors to fund generic advertising. The court held that
the program violated the First Amendment because it did not “require group
action, save to generate the very speech” to which the plaintiffs objected. (Id. at
p. 415.)1
Here, plaintiff Gerawan Farming, Inc. (Gerawan) contends that the plums it
developed, grows and distributes are superior to plums grown and marketed by
others, and it therefore objects to the plum marketing order compelling it to
contribute to the cost of generic advertising for plums. It sued California’s
Secretary for Food and Agriculture, contending that the marketing order violated
Gerawan’s free speech rights under both the federal and state Constitutions. As an
aside, this is the second time the case has reached this court. In Gerawan I, supra,
24 Cal.4th 468, we reversed in part the Court of Appeal after it affirmed the trial
1
The high court has just granted certiorari in another case involving generic
marketing orders, Livestock Marketing Ass’n. v. U.S. Dept. of Agric. (8th Cir.
2003) 335 F.3d 711, 717, cert. granted sub. nom. Veneman v. Livestock Marketing
Ass’n. (May 24, 2004, No. 03-1164) ___ U.S. ___ [72 USLW 3539] and Nebraska
Cattlemen, Inc. v. Livestock Marketing Ass’n. (May 24, 2004, No. 03-1165)
___ U.S. ___ [72 USLW 3539]. At issue is whether a United States Department
of Agriculture program violates the First Amendment rights of American beef
producers by requiring them to pay for advertisements such as “Beef: It’s What’s
for Dinner,” which do not distinguish between American and foreign beef.
2
court’s grant of the state’s motion for judgment on the pleadings, ruling that
Gerawan’s complaint failed to state a cause of action under either the state or
federal Constitutions.
This court decided Gerawan I after the United States Supreme Court’s
decision in Glickman, supra, 521 U.S. 457, but before its decision in United
Foods, supra, 533 U.S. 405. I joined Justice Stanley Mosk’s majority opinion in
Gerawan I, which in rejecting Gerawan’s First Amendment claim relied on the
holding in Glickman that the compelled funding of generic advertising was merely
“a species of economic regulation” that did not implicate the First Amendment.
(Gerawan I, supra, 24 Cal.4th at p. 500.) With respect to the California
Constitution’s free speech clause, Gerawan I viewed the protection afforded under
that clause as “ ‘broader’ and ‘greater’ ” than its federal counterpart. (Id. at
p. 491.) But Gerawan I did not set forth any test to determine whether compelled
funding of commercial speech violates the state Constitution, instead remanding
the case to the Court of Appeal. Thereafter, the Court of Appeal, without
articulating a test, held that the compelled funding violated California’s free
speech clause. The court reasoned that because the Legislature had left to a
majority of plum growers the decision whether to adopt a marketing order for
plums, the compelled funding of generic advertising did not serve a governmental
interest.
Again this court granted review, and it now reverses the Court of Appeal.
This time, however, the majority sets forth a test to determine whether compelled
funding of commercial speech violates the free speech clause of our state
Constitution. (Cal. Const., art. I, § 2, subd. (a).) The test is the one that was
articulated by the United States Supreme Court in Central Hudson, supra, 447
U.S. 557. That test asks (1) whether “the asserted governmental interest”
underlying the regulation of commercial speech “is substantial”; (2) “whether the
3
regulation directly advances the governmental interest asserted”; and (3) “whether
it is not more extensive than is necessary to serve that interest.” (Id. at p. 566.) In
Central Hudson, that test was used to ascertain the constitutionality of a New York
state utility regulation banning commercial advertising. But 17 years later, in
Glickman, supra, 521 U.S. 457, three of the high court’s four dissenters in that
case -- Justice Souter joined by Chief Justice Rehnquist and by Justice Scalia --
would have applied that same test (Central Hudson) to compelled funding cases.
(See Glickman, supra, at pp. 491-504 (dis. opn. of Souter, J.).)
The Central Hudson test is more protective of commercial speech rights
than the First Amendment test endorsed by a majority of the high court in
compelled funding cases. The latter asks only if the compelled funding is
“ancillary to” some comprehensive regulatory program. (United Foods, supra,
533 U.S. at p. 411.) In light of this court’s holding in Gerawan I that the
protection under the California Constitution’s free speech clause is greater than
that afforded under the First Amendment to the federal Constitution, I agree with
the majority here that the Central Hudson test governs the state constitutional
issue in this case.
I also agree with remanding this matter to the trial court. Although the
Court of Appeal may ultimately prove correct in its conclusion that the plum
marketing order at issue here lacks any substantial governmental purpose (a
conclusion fatal to the “compelled funding of speech” aspect of the program
because it would fail the first of the three-part Central Hudson test), I agree with
the majority that the parties should have a chance to litigate the scope and contours
of the program before the trial court.
II.
My disagreement with the majority lies in its conclusion that the plum
marketing order’s compelled funding of commercial speech does not infringe
4
Gerawan’s free speech rights under the First Amendment of the federal
Constitution. Given this court’s conclusion in Gerawan I that, applying the high
court’s then-controlling decision in Glickman, supra, 521 U.S. 457, the plum
marketing program did not “implicate” the First Amendment, an explanation is in
order. As mentioned earlier, after this court’s 2000 decision in Gerawan I, the
United States Supreme Court, seven months later, held in United Foods, supra,
533 U.S. 405, that compelled funding of commercial speech violates the First
Amendment if it is not “ancillary to” a comprehensive marketing program.
(United Foods, supra, 533 U.S. at p. 411.) That holding now casts doubt on our
conclusion in Gerawan I, which was compelled by the high court’s earlier
decision in Glickman, supra, 521 U.S. 457, that there was no violation of
Gerawan’s free speech rights under the federal Constitution.
Thus, unlike Justice Brown (conc. & dis. opn. of Brown, J., post, at pp. 1-
2), I agree with the majority that, in light of recent developments in the high
court’s jurisprudence in the area at issue, we must reconsider our conclusion in
Gerawan I that the plum order did not “implicate” the First Amendment to the
federal Constitution.2
Although the majority is right in reconsidering the First Amendment issue,
it is wrong in rejecting it on the merits based on the allegations in Gerawan’s
complaint. The majority asserts those allegations do not state a First Amendment
2
Furthermore, because in Gerawan I, our remand to the Court of Appeal
encompassed only the issue whether the plum marketing order violated the
California Constitution’s free speech clause, Gerawan’s additional contention that
the order violated the First Amendment (a contention this court had rejected) was
not before that court on remand. Accordingly, Gerawan was entirely correct, after
the high court decided United Foods, supra, 533 U.S. 405, to raise the issue in this
court, asking us in light of that recently decided case to reconsider our rejection of
its First Amendment argument in Gerawan I.
5
claim under United Foods, supra, 533 U.S. 504. (Maj. opn., ante, at pp. 20-21
[“according to Gerawan’s pleadings,” the program constitutes cooperative
regulatory activity that controls the quality and size of the product and that
“spends a substantial portion of its assessment on developing and enforcing
quality standards.”].) I disagree. Gerawan’s complaint does state a cause of
action under the First Amendment that the compelled funding of the commercial
speech aspect of the plum marketing order was not “ancillary to” a comprehensive
marketing program, as required by United Foods; that is, the program does not
“require group action” other than that necessary “to generate the very speech” to
which Gerawan objects. (Id. at pp. 411, 415.) On that basis, I would allow
Gerawan to pursue its First Amendment challenge to the plum order in the trial
court.
As noted earlier, this case is before us after the trial court granted the
motion for judgment on the pleadings made by the State Secretary of Food and
Agriculture. As relevant here, granting such a motion is proper only if the
plaintiff’s “complaint does not state facts sufficient to constitute a cause of
action.” (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) A motion for judgment on
the pleadings has the same “ ‘purpose and effect of a general demurrer.’ ” (Smiley
v. Citibank (1995) 11 Cal.4th 138, 146.) As with a demurrer, therefore, both a
trial and a reviewing court must liberally construe the pleadings “ ‘with a view to
attaining substantial justice among the parties.’ ” (Heckendorn v. City of San
Marino (1986) 42 Cal.3d. 481, 486; Youngman v. Nevada Irrigation Dist. (1969)
70 Cal.2d 240, 244-245; see Code Civ. Proc., § 452.) If there is a reasonable
possibility that an amendment will cure an inherent defect in a complaint, a
reviewing court should not affirm a trial court’s order granting judgment on the
pleadings unless the plaintiff has been given an opportunity to amend its
6
complaint. (See Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 385; Minsky v.
City of Los Angeles (1974) 11 Cal.3d 113, 118.)
Here, Gerawan’s complaint alleges that the “primary purpose” of the plum
marketing program is a “promotion and market development program consisting
of a ‘generic’ advertising program and other speech related activities,” but that it
also includes “forced inspection regarding maturity, color, and other quality
factors” as well as “general research, [and] educational programs.” It further
alleges that of the 20-cent assessment on each 28-pound plum container, 11 cents
funds the generic advertising, with only 2 cents spent on research and 7 cents on
quality control and inspection. These allegations that more than half of the
assessment is used to fund generic advertising, and that such advertising “and
other speech related activities” constitute the “primary purpose” of the plum
program are sufficient to state a cause of action that the program violates the First
Amendment. In two cases presenting substantially similar facts to those alleged
by Gerawan in this case, the federal Courts of Appeals for the Sixth and Eighth
Circuits recently concluded that agricultural marketing orders violated the First
Amendment. (See Michigan Pork Producers Ass’n., Inc. v. Veneman (6th Cir.
2003) 348 F.3d 157, 163; Livestock Marketing Ass’n. v. U.S. Dept. of Agric.,
supra, 335 F.3d 711, 717, cert. granted sub. nom. Veneman v. Livestock Marketing
Ass’n. (May 24, 2004, No. 03-1164) ___ U.S. ___ [72 USLW 3539] and Nebraska
Cattlemen, Inc. v. Livestock Marketing Ass’n. (May 24, 2004, No. 03-1165) ___
U.S. ___ [72 USLW 3539].)
Even were one to entertain a doubt as to the sufficiency of Gerawan’s
allegations in stating a First Amendment claim, the majority -- in light of the fact
that Gerawan filed its complaint on January 31, 1994, more than 7 years before the
high court’s recent decision in United Foods, supra, 533 U.S. 405, and consistent
7
with this court’s own precedents discussed above -- should have granted Gerawan
leave to amend its complaint.
Because of my conclusion that Gerawan’s complaint does state a cause of
action for violation of its free speech rights under the First Amendment, I would
reverse the trial court’s grant of the motion for judgment on the pleadings made by
the California Secretary for Food and Agriculture on Gerawan’s First Amendment
claim, and I would remand this case in its entirety to the trial court.
KENNARD,
J.
8
CONCURRING AND DISSENTING OPINION BY BROWN, J.
I agree that, in determining whether a program that compels the funding of
generic advertising violates article I, section 2, subdivision (a) of the California
Constitution, courts should apply the intermediate scrutiny standard articulated by
the United States Supreme Court in Central Hudson Gas & Elec. v. Public Serv.
Comm’n (1980) 447 U.S. 557. In this respect, I find persuasive Justice Souter’s
discussion of the Central Hudson test in Glickman v. Wileman Brothers & Elliott,
Inc. (1997) 521 U.S. 457, 491-505 (dis. opn. of Souter, J.) (Glickman). I also
agree that a “remand for further factfinding is required to determine whether the
program at issue” satisfies the Central Hudson test and/or whether “the generic
advertising in question is constitutional because it is government speech . . . .”
(Maj. opn., ante, at p. 2.)
But I disagree with the majority’s decision to reaffirm our holding in
Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468 (Gerawan I) “that the
marketing program in question does not violate the First Amendment” despite “the
United States Supreme Court’s most recent pronouncement on the compelled
funding of generic advertising in United States v. United Foods, Inc. (2001) 533
U.S. 405 (United Foods).” (Maj. opn., ante, at p. 2.) As an initial matter, I do not
believe this issue is properly before us. Although we decided the federal
constitutional issue in Gerawan I before the United States Supreme Court decided
United Foods, neither party asked the Court of Appeal to revisit this issue on
1
remand, and the court did not do so. Indeed, the Court of Appeal followed our
instructions in Gerawan I, supra, 24 Cal.4th at page 517, by only considering
whether the California Plum Marketing Program violated California’s free speech
clause. The parties did discuss United Foods in the course of addressing the
proper standard under California’s free speech clause. But, once the majority
declined to adopt the United Foods standard as the standard under the California
Constitution (see maj. opn., ante, at pp. 22-24), it had no further need to apply it to
this case. I therefore see no reason for us to reach out and decide an issue that our
Courts of Appeal have not had an opportunity to fully address.
Moreover, the United States Supreme Court has recently decided to revisit
the issue of whether the compelled funding of generic advertising violates the First
Amendment. (See Veneman v. Livestock Marketing Assn. (May 24, 2004, No. 03-
1164) ___ U.S. ___ [2004 WL 303634].) Thus, any decision we render will likely
be moot within a year. In any event, the high court presumably granted the
petition for writ of certiorari because the federal Courts of Appeals have
apparently recognized “at least four variations” of the federal constitutional
“standard for determining the validity of laws compelling commercial speech”
since United Foods. (Cochran v. Veneman (3d Cir. 2004) 359 F.3d 263, 277.)
Given this confusion over the proper standard under the federal Constitution, I see
no reason to wade into this thicket where, as here, the United States Supreme
Court will resolve it shortly and the resolution of the state constitutional question
may render the federal constitutional question moot.
If, however, we must address the federal constitutional issue, I do not
believe we can simply rely on our analysis in Gerawan I in concluding that the
California Plum Marketing Program is constitutional. In my view, United
Foods—which focuses on the actual extent of regulation in the relevant market—
casts doubt on our reasoning in Gerawan I. As such, I believe that a remand for
2
further factfinding is also necessary in order to determine whether the program
violates the First Amendment.
In resolving the federal constitutional issue in Gerawan I, we compared the
California Plum Marketing Program and its enabling statute—the California
Marketing Act of 1937 (CMA)—with the federal marketing order—Marketing
Order No. 917—and enabling statute—the Agricultural Marketing Agreement Act
of 1937 (AMAA)—at issue in Glickman. (See Gerawan I, supra, 24 Cal.4th at pp.
507-508.) After making this comparison, we observed that the CMA was not
materially different from the AMAA (Gerawan I, at p. 508), and that the federal
marketing order at issue in Glickman “did not in fact regulate so much more
broadly and deeply than the California Plum Marketing Program” (Gerawan I, at
p. 508). Based on these similarities, we held that Glickman—which upheld the
constitutionality of Marketing Order No. 917—established that the California
Plum Marketing Program did not violate the First Amendment. (See Gerawan I,
at p. 508.)
Using the same reasoning, the majority reaffirms the constitutionality of the
California Plum Marketing Program in light of the United States Supreme Court’s
decision in United Foods. (See maj. opn., ante, at pp. 16-22.) But United Foods
does not appear to support the majority’s reasoning. In United Foods, the United
States Supreme Court held that a federal marketing order issued pursuant to the
Mushroom Promotion, Research, and Consumer Information Act (MPRCIA) did
not satisfy the test for compelled speech established in Abood v. Detroit Bd. of Ed.
(1977) 431 U.S. 209, and Keller v. State Bar of Cal. (1990) 496 U.S. 1, and was
therefore unconstitutional. (United Foods, supra, 533 U.S. at pp. 413-417.) To
reach this holding, the court carefully distinguished the MPRCIA marketing order
from the federal marketing order found constitutional in Glickman. According to
the court, “[i]n Glickman the mandated assessments for speech were ancillary to a
3
more comprehensive program restricting marketing autonomy.” (United Foods, at
p. 411.) By contrast, the “advertising itself . . . [was] the principal object of the
regulatory scheme” at issue in United Foods. (Id. at pp. 411-412.)
The United States Supreme Court did not reach this conclusion by simply
comparing the enabling statutes and the marketing orders at issue in United Foods
and Glickman. Instead, the court considered “the entire regulatory program”
(United Foods, supra, 533 U.S. at p. 412), and asked whether the mushroom
market was, in reality, as heavily regulated as the tree fruit market in Glickman.
Because there were “no marketing orders that regulate how mushrooms may be
produced and sold, no exemption from the antitrust laws, and nothing preventing
individual producers from making their own marketing decisions” (United Foods,
at p. 412), the court concluded that “there is no ‘heavy regulation through
marketing orders’ in the mushroom market” (id. at p. 413). Although “greater
regulation of the mushroom market might have been implemented under the”
AMAA, “the compelled contributions for advertising [were] not part of some
broader regulatory scheme.” (United Foods, at p. 415.) By contrast, the
California tree fruit market was subjected to “ ‘detailed marketing orders’ ”
containing various regulations that substantially limited the marketing autonomy
of producers. (Id. at p. 412, quoting Glickman, supra, 521 U.S. at p. 469.) And,
although these orders varied in the extent that they eliminated competition (see
United Foods, at p. 420), they “to a large extent deprived producers of their ability
to compete and replaced competition with a regime of cooperation” (id. at p. 414).
The court therefore held that “[t]he cooperative marketing structure relied upon by
a majority of the Court in Glickman to sustain an ancillary assessment finds no
corollary here.” (Id. at p. 415.)
Thus, under United Foods, courts must focus on the actual extent of
regulation in the market at issue in order to determine whether the compelled
4
funding of speech violates the federal Constitution. If the mandatory assessments
are part of a comprehensive regulatory scheme that actually limits the autonomy of
its participants and establishes a broader collective enterprise, then they are
constitutional. Absent such a regulatory system, however, they are not.
Based on the limited record before us, I do not believe we can conclude that
the California Plum Marketing Program is “ancillary to a more comprehensive
program restricting marketing autonomy” like the marketing orders at issue in
Glickman. (United Foods, supra, 533 U.S. at p. 411.) The marketing orders at
issue in Glickman contain extensive and detailed regulations giving the Secretary
of Agriculture broad authority to regulate the tree fruit market. (See, e.g., 7 C.F.R.
§§ 916.52, 917.41 (2004).) And these regulations actually and substantially limit
the autonomy of the participants (see, e.g., 7 C.F.R. §§ 916.55, 916.350, 916.356,
917.45, 917.442, 917.459, 917.461 (2004)), as well as impose extensive reporting
requirements (see, e.g., 7 C.F.R. §§ 916.60, 917.50 (2004)).
By contrast, there is no evidence in the limited record before us that the
California Plum Marketing Program does the same. The general provisions of the
California Plum Marketing Program relating to research and quality standards and
inspections found in the record do not appear to establish the actual extent of
regulation in the California plum market. These provisions therefore do not, by
themselves, establish a market characterized by “[c]ollective action, rather than the
aggregate consequences of independent competitive choices,” like the tree fruit
market in Glickman. (Glickman, supra, 521 U.S. at p. 461.) Moreover, the
California Plum Marketing Program permits an assessment of up to 11 cents per
28-pound box for generic advertising, but only permits an assessment of up to
2 cents per box for research activities and up to 7 cents per box for quality
standards and inspection activities. (See Gerawan I, supra, 24 Cal.4th at p. 480.)
The program therefore contemplates the use of 55 percent of the funds assessed
5
for generic advertising alone. And the actual percentage of assessed funds
earmarked for generic advertising could be even higher. Thus, absent evidence of
the actual percentage of assessed funds used for generic advertising, “ ‘the
principal object of the’ ” program is arguably “ ‘commercial speech itself’ ” in
violation of the First Amendment. (Livestock Marketing Assn. v. United States
Dept. of Agriculture (8th Cir. 2003) 335 F.3d 711, 717 [holding that a marketing
order violated the federal Constitution in light of United Foods because “ ‘at least
50% of the assessments collected and paid . . . are used for advertising’ ”], cert.
granted sub nom. Veneman v. Livestock Marketing Assn., supra, ___ U.S. ___
[2004 WL 303364].)
Thus, without an evidentiary record establishing the actual extent of
regulation of the California plum market, we cannot say whether the California
Plum Marketing Program “is part of a larger cooperative regulatory program with
substantial nonexpressive elements” as understood in United Foods. (Maj. opn.,
ante, at p. 22.) Accordingly, I believe we must remand for further factfinding if
we choose to address the issue of whether the compelled funding of advertising at
issue here violates the federal Constitution.
BROWN, J.
I CONCUR:
RUVOLO,
J.*
*
Associate Justice of the Court of Appeal, First Appellate District, Division
Two, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
6
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Gerawan Farming, Inc. v. Kawamura
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 94 Cal.App.4th 665
Rehearing Granted
__________________________________________________________________________________
Opinion No. S104019
Date Filed: June 3, 2004
__________________________________________________________________________________
Court: Superior
County: Tulare
Judge: Patrick J. O’Hara
__________________________________________________________________________________
Attorneys for Appellant:
Erik S. Jaffe; Brian C. Leighton; Mayer, Brown & Platt, Mayer, Brown, Rowe & Maw, Michael W.
McConnell, Craig Canetti and Sharon Swingle for Plaintiff and Appellant.
King & Spalding, Steven G. Brody, Jeanette M. Viggiano; Daniel J. Popeo, Richard Samp, R. Shawn
Gunnarson; Susan Liebeler; Thomas, Walton & Graves and John R. Walton for Washington Legal
Foundation as Amicus Curiae on behalf of Plaintiff and Appellant.
__________________________________________________________________________________
Attorneys for Respondent:
Bill Lockyer, Attorney General, Richard M. Frank, Chief Assistant Attorney General, Herschel T. Elkins,
Assistant Attorney General, Mary E. Hackenbracht, Linda Berg, Ronald A. Reiter, Seth E. Mermin and
Tracy L. Winsor, Deputy Attorneys General, for Defendant and Respondent.
Kahn, Soares & Conway, George H. Soares, Dale A. Stern and Robert S. Hedrick for California Avocado
Commission, California Apple Commission, California Asparagus Commission, California Cut Flower
Commission, California Date Commission, California Egg Commission, California Forest Products
Commission, California Grape Rootstock Improvement Commission, California Kiwifruit Commission,
Lake County Winegrape Growers Commission, Lodi-Woodbridge Winegrape Growers Commission,
California Pepper Commission, California Pistachio Commission, California Rice Commission, California
Sheep Commission, California Strawberry Commission, California Tomato Commission, California
Walnut Commission and California Wheat Commission as Amici Curiae on behalf of Defendant and
Respondent.
Baker, Manock & Jensen, Kendall L. Manock, Robert D. Wilkinson, Kathleen A. Meehan; Wilmer Cutler
Pickering and Seth P. Waxman for The California Table Grape Commission as Amicus Curiae on behalf of
Defendant and Respondent.
7
Counsel who argued in Supreme Court (not intended for publication with opinion):
Erik S. Jaffe
5101 34th Street, N.W.
Washington, D.C. 20008
(202) 237-8165
Tracy L. Winsor
Deputy Attorney General
1300 I Street, Suite 125
Sacramento, CA 94244-2550
(916) 324-5372
Seth Waxman
Wilmer Cutler Pickering
2445 “M” Street, N.W.
Washington, D.C. 20037
(202) 663-6000
8
Opinion Information
| Date: | Docket Number: |
| Thu, 06/03/2004 | S104019 |
Parties
| 1 | Gerawan Farming, Inc. (Plaintiff and Appellant) Represented by Erik S. Jaffe Attorney at Law 5101 34th St., N.W. Washington, DC |
| 2 | Kawamura, A.G. (Defendant and Respondent) Represented by Tracy L. Winsor Office of the Attorney General 1300 I Street, Suite 125 Sacramento, CA |
| 3 | Secretary Of Food & Agriculture (Defendant and Respondent) Represented by Tracy L. Winsor Office of the Attorney General 1300 I Street, Suite 125 Sacramento, CA |
| 4 | Department Of Food & Agriculture (Defendant and Respondent) Represented by Seth Edward Mermin Office of the Attorney General P. O.Box 944255 Sacramento, CA |
| 5 | Washington Legal Foundation (Amicus curiae) Represented by Susan W. Liebeler Attorney at Law P. O. Box 4362 Malibu, CA |
| 6 | California Avocado Commission (Amicus curiae) Represented by Dale A. Stern Kahn Soares & Conway 1112 " I" Street Suite 200 Sacramento, CA |
| 7 | California Table Grape Comm. (Amicus curiae) Represented by Kendall L. Manock Baker, Manock & Jensen 5260 N. Palm Ave. Suite 421 Fresno, CA |
| 8 | California Table Grape Comm. (Amicus curiae) Represented by Seth Waxman Wilmer Cutler Pickering Hale and Dorr LLP 2445 M Street, N.W. Washington, DC |
| Disposition | |
| Jun 3 2004 | Opinion: Affirmed in part/reversed in part |
| Dockets | |
| Jan 28 2002 | Petition for review filed in Sacramento by the AG-SAC for respondent William Lyons, Jr. as Secretary of State etc. |
| Jan 30 2002 | Record requested |
| Feb 15 2002 | Answer to petition for review filed by counsel for pltf/cross complainant Gerawan |
| Feb 15 2002 | Request for depublication (petition for review pending) by Deutsch LA Inc. (non party) |
| Feb 19 2002 | Request for depublication filed (another request pending) by non-party California Table Grape Commission |
| Feb 25 2002 | Opposition filed by pltf/cross complainants Gerawan and Delano to depub. request |
| Mar 5 2002 | Second Record Request |
| Mar 20 2002 | Petition for Review Granted (civil case) Votes: George C.J., Kennard, Werdegar & Moreno JJ. Baxter, J., was recused and did not participate. Brown, J., was absent and did not participate. |
| Mar 27 2002 | Record requested |
| Apr 2 2002 | Certification of interested entities or persons filed by resp |
| Apr 3 2002 | Request for extension of time filed by resps to file the brief on the merits, to 6-18-02. |
| Apr 8 2002 | Certification of interested entities or persons filed by pltf-cross complainant |
| Apr 11 2002 | Filed: pltf/cross-complainant Gerawan's opposition to deft-resp's request for ext. of time. |
| Apr 11 2002 | Extension of time granted to 5-20-02 for resps to file the opening brief on the merits. (limited extension) |
| May 14 2002 | Request for extension of time filed stipulation by parties for resps to file the opening brief on the merits, to 6-10-02 |
| May 15 2002 | Order filed The stipulation extending time to file resp's opening brief on the merits is denied (Rule 29.3(a) On the Court's own motion, the time to serve & file resp's opening brief on the merits is hereby extended to and including 6-10-02. No further extensions of time are contemplated. |
| May 15 2002 | Filed: "(Corrected) Application for Extension of Time to file Opening Brief on the Merits, etc.", from respondent. |
| May 21 2002 | Change of Address filed for: attys for Gerawan |
| Jun 10 2002 | Opening brief on the merits filed by resps (filed in Sac) **THIS FILING HAS BEEN STRICKEN** |
| Jun 10 2002 | Request for judicial notice filed (in non-AA proceeding) by resps. with attachments. |
| Jun 10 2002 | Application to appear as counsel pro hac vice (granted case) by Michael McConnell for cross-complainant Gerawan |
| Jun 13 2002 | Application to appear as counsel pro hac vice granted Michael W. Mc Connell for cross-complainant Gerawan |
| Jun 18 2002 | Filed document entitled: (resps') Motion to File Corrected (opening) Brief. revised brief received under separate cover. |
| Jun 19 2002 | Filed document entitled: Resps' **corrected** opening brief on the merits. (filed with the Court's permission. Supersedes the brief filed on June 10) |
| Jul 10 2002 | Answer brief on the merits filed by cross-complainant Gerawan |
| Jul 18 2002 | Received document entitled: Motion of cross-complainant Gerawan to file "corrected" answer brief on the merits. Brief submitted herewith. |
| Jul 19 2002 | Filed document entitled: Cross-complainant's **Corrected** Answer Brief on the Merits. (filed with permission of the Court. Supersedes the brief filed on July 10) |
| Jul 25 2002 | Request for extension of time filed by resp to file the reply brief on the merits, to 8/9. |
| Jul 30 2002 | Extension of time granted to **August 9, 2002** for resps to file the reply brief on the merits. |
| Aug 9 2002 | Reply brief filed (case fully briefed) in Sacramento by Respondents Secretary of Food & Agriculture and the Department of Food & Agriculture |
| Sep 9 2002 | Received application to file amicus curiae brief; with brief CALIFORNIA AVOCADO COMMISSION , et al. in support of Resp. (Lyons) |
| Sep 9 2002 | Received application to file amicus curiae brief; with brief CALIFORNIA TABLE GRAPE COMM. in support of Respondents |
| Sep 9 2002 | Received application to file amicus curiae brief; with brief Washington Legal Foundation in support of appellant |
| Sep 18 2002 | Permission to file amicus curiae brief granted by Washington Legal Foundation in support of aplt. An answer may be filed by any party w/in 20 days of the filing of the brief. |
| Sep 18 2002 | Amicus Curiae Brief filed by: Washington Legal Foundation in support of aplt. |
| Sep 20 2002 | Permission to file amicus curiae brief granted by the Calif. Avocado Commission in support of resp. Any party may file an answer W/in 20 days. |
| Sep 20 2002 | Amicus Curiae Brief filed by: the Calif. Avocado Commission in support of resp. |
| Sep 20 2002 | Permission to file amicus curiae brief granted by the Calif. Table Grape Commission in support of resp. Any party may file an answer w/in 20 days. |
| Sep 20 2002 | Amicus Curiae Brief filed by: the Calif. Table Grape Commission in support of resp. |
| Oct 8 2002 | Response to amicus curiae brief filed Resps' response to the A/C brief of Washington Legal Foundation |
| Oct 21 2002 | Note: Mail returned (unable to forward) to Michael W. McConnell -- "refused" |
| Mar 21 2003 | Application to appear as counsel pro hac vice (granted case) by Eric S. Jaffe for aplt Gerawan. Also received is a request for substitution of attorneys of Erik S. Jaffe in place of Michael McConnell. |
| Mar 26 2003 | Application to appear as counsel pro hac vice granted Eric S. Jaffe to appear for aplt. |
| Mar 26 2003 | Notice of substitution of counsel received (filed) Eric S. Jaffe in place of Michael Mc Connell for aplt Gerawan |
| Feb 10 2004 | Case ordered on calendar 3-9-04, 9am, S.F. |
| Feb 20 2004 | Filed: Resps' aplication to allocate oral argument time to amicus Calif. Table Grape Comm. |
| Feb 24 2004 | Application to appear as counsel pro hac vice (granted case) Seth Waxman for amicus curiae California Table Grape Commission |
| Feb 27 2004 | Supplemental brief filed by respondents (re oral argument) |
| Feb 27 2004 | Request for judicial notice granted Respondent's request for judicial notice, filed on June 10, 2002, is granted. |
| Mar 1 2004 | Order filed permission granted for two counsel to argue on behalf of resps. |
| Mar 1 2004 | Order filed Permission granted for resps to allocate 10 min oral argument time to A/C Calif. Table Grape Comm. |
| Mar 1 2004 | Application to appear as counsel pro hac vice granted by Seth P. Waxman for A/C Calif. Table Grape Commission at oral argument. |
| Mar 9 2004 | Cause argued and submitted |
| Jun 3 2004 | Opinion filed: Affirmed in part, reversed in part and remanded . Majority opinion by Moreno, J. ----------------joined by George, C.J., Werdegar, Chin, JJ. Concurring & Dissenting opinion by Kennard, J. Concurring & Dissenting opinion by Brown, J.------joined by Ruvolo, JPT. (1st Dist. C/A) |
| Jun 7 2004 | Change of contact information filed for: counsel for A/C Calif Table Grape Comm. (change of firm name for Wilmer Cutler et al) |
| Jul 7 2004 | Remittitur issued (civil case) |
| Jul 15 2004 | Received: Receipt for remittitur from 4th District, Division 3, signed for Jill Rivera, Deputy Clerk. |
| Briefs | |
| Jun 10 2002 | Opening brief on the merits filed |
| Jul 10 2002 | Answer brief on the merits filed |
| Aug 9 2002 | Reply brief filed (case fully briefed) |
| Sep 18 2002 | Amicus Curiae Brief filed by: |
| Sep 20 2002 | Amicus Curiae Brief filed by: |
| Sep 20 2002 | Amicus Curiae Brief filed by: |
| Oct 8 2002 | Response to amicus curiae brief filed |
