Court to Decide Issue of Mandatory Payments to Produce Boards
Jun. 03, 1996
WASHINGTON (AP) _ The Supreme Court today agreed to decide whether the federal government can force growers and shippers of California peaches, plums and nectarines to help pay for generic advertising of those fruits.
The justices voted to review a federal appeals court ruling that said the mandatory assessments violated free-speech rights of those more interested in promoting their own brands.
Secretary of Agriculture Dan Glickman urged the nation's highest court to reverse a ruling by the 9th U.S. Circuit Court of Appeals. The lower court's ruling could end generic advertising campaigns worth over $100 million in seven Western states, the appeal said.
``Arizona, California, Idaho, Montana, Nevada, Oregon and Washington have enacted statutes creating marketing orders or promotion boards under which generic promotion of commodities may be conducted using mandatory assessments,' the court was told.
The federal Agricultural Marketing Agreement Act of 1937, an offspring of New Deal legislation, gives the secretary of agriculture considerable authority to regulate the nation's fruits and vegetables market through so-called market orders.
The orders primarily are quality-control measures, but also include assessments imposed on fruit handlers, based on volume, to pay for industry-wide administration, inspection, research and advertising.
Wileman Bros. & Elliott Inc. and other California fruit growers and shippers began in 1987 withholding the assessments they were required to pay under the federal marketing orders.
After several rounds of legal maneuvering, a federal trial judge in 1993 ordered the handlers to pay $3.1 million in back assessments.
The 9th Circuit court upheld that ruling last year.
``The First Amendment right to freedom of speech includes a right not to be compelled to render financial support for others' speech,'' the appeals court said, relying on a 1977 Supreme Court decision that involved use of a union member's dues.
``This is also true when commercial speech is at issue,'' the appeals court added.
The 9th Circuit ruled that such government-imposed generic advertising programs violate free-speech rights because they do not ``directly advance'' the government's interest in promoting certain products and are not ``narrowly tailored'' to interfere as little as possible with free-speech rights.
Those two tests are contained in a landmark 1980 Supreme Court decision on the rights of advertisers.
In Glickman's appeal, government lawyers argued that the appeals court wrongly invoked the 1980 Supreme Court ruling because ``the marketing orders do not restrict speech, commercial or otherwise.''
The appeal noted that another appeals court had upheld similar assessments, worth about $183 million in 1994, imposed under the federal Beef Promotion Act.
In a cross-appeal, the California fruit handlers challenged other regulations imposed by the federal government.
The cases are Glickman vs. Wileman Bros. & Elliott, 95-1184, and Wileman Bros. & Elliott vs. Glickman, 95-1393.