Supreme Court Says Farmers Must Keep Paying for Ads

The milk mustache ads and valuable news that beef is “Real Food for Real People” will live to see another day, thanks to a 5-4 ruling from the Supreme Court on Wednesday.

Siding with agriculture officials instead of dissident growers from California’s Central Valley, the court upheld federal and state marketing orders that force farmers and shippers to pay for generic advertising to promote agricultural products.

The court characterized these industrywide promotions as a type of “economic regulation.” Since the New Deal era of the 1930s, the court has routinely upheld federal efforts that regulate the economy.

California agriculture officials were pleased with the decision, while the losing side called it a blow to farmers’ 1st Amendment rights.

“It is good news. Certainly the industry is celebrating with great joy today,” said Ann M. Veneman, secretary of the California Department of Food and Agriculture.

California benefits from marketing orders because they not only promote the state’s products, but groups they fund also open new markets, research food safety improvements and create consumer education and health programs, she said.

But Thomas E. Campagne, a Fresno lawyer representing some of the dissident growers, called the marketing orders “a waste of money for the consumers and the growers” and said the decision takes away the free-speech rights of agricultural businesses, forcing them to support the efforts of competitors.

“I don’t think any of my farmer clients believe that they are any different from any other entrepreneurs,” Campagne said. “They believe that the Constitution applies to them just as it does to any other entrepreneur.”

The generic-advertising programs are based on the Agricultural Marketing Act of 1937, a New Deal law that sought to stabilize the markets and prop up prices for farmers.

In the mid-1960s, the U.S. Department of Agriculture began to include generic ad campaigns in its marketing orders, and California farm officials did the same for about 35 commodities.

Some campaigns became famous, such as the California Dancing Raisins singing “I Heard It Through the Grapevine.” Others were more low-key, such as telling supermarket shoppers how to make peach pies with fresh California peaches.

But the entire system of industrywide promotions threatened to unravel last year when the U.S. 9th Circuit Court of Appeals in San Francisco ruled that growers of peaches, nectarines and plums could not be forced to pay for the ads.

Several dozen growers in the Central Valley complained that the government was violating their free-speech rights by forcing them to pay for the ads, particularly when they disagreed with the message.

Dan Gerawan, a leader of the dissidents, said he is disappointed by the decision. Gerawan said he markets the peaches, nectarines and plums he grows on the farm his family has owned since 1938 as special, high-quality fruit. Yet he is forced to subsidize an ad campaign that says all fruit is the same.

Gerawan said he pays more than $600,000 a year in forced assessments to the California Tree Fruit Agreement, a federally authorized board based in Reedley.

“It’s sad to see this happen,” Gerawan said. “We’ll continue with business as usual, but we’re looking at what options we have.”

The agreement is one of 34 marketing campaigns authorized by the USDA that collect $750 million per year from growers and shippers. In addition, California has 47 state-authorized programs that collect another $137 million to promote everything from apples and apricots to walnuts and wheat.

Federal officials point out that the ad campaigns originate with a vote of the growers, at least two-thirds of whom must approve them.

Although the ruling dealt with a challenge to the California Tree Fruit Agreement, it is expected to affect lawsuits against several other marketing orders, said Bob Obbink, president of the California Table Grape Commission.

“It’s been a big cloud over all these programs over the past 10 years,” said Obbink, whose commission represents 800 grape growers, only two of whom have challenged the marketing orders’ right to generic advertising. “We’ve all spent a tremendous amount of money in court.”

Ruling for the growers such as Gerawan, the 9th Circuit said the 1st Amendment protects the rights of dissenters. It relied on Supreme Court rulings involving union dues.

In a 1977 decision, the court said schoolteachers can be forced to pay general dues to support a union but that dissident teachers cannot be forced to pay that part of the dues that go to fund political activity. But writing for the high court, Justice John Paul Stevens said the generic ads and union dues for political activity are not the same.

The marketing orders “do not compel the producers to endorse or to finance any political or ideological views,” he said. “None of the advertising in this record promotes any particular message other than encouraging consumers to buy California tree fruit.”

His opinion in Glickman vs. Wileman Bros. & Elliott Inc. was joined by Justices Sandra Day O’Connor, Anthony M. Kennedy, Ruth Bader Ginsburg and Stephen G. Breyer.

In dissent, Justice David H. Souter expressed surprise that the majority found “no 1st Amendment right to be free of coerced subsidization of commercial speech.”

Savage reported from Washington and Rivera Brooks reported from Los Angeles.