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CONTENTS
Glickman vs. Wileman - On the Doorstep
of The Supreme Court
USDA's Viewpoint
Editor's Notes
Director’s Corner
Next Meeting
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GLICKMAN vs. WILEMAN
On the Doorstep of The Supreme Court
Did Ninth Circuit Mistakenly Apply Rules Developed for
Commercial Speech Restrictions to a Compelled Funding of Speech Case?
by Richard T. Rossier, Esquire
Wayne R. Watkinson, Esquire
The Ninth Circuit’s First Amendment analysis in Wileman Bros. &
Elliott, Inc., v. Espy, 58 F.3d 1367 (9th Cir. 1995), cert. granted, 116
S. Ct. 1875 (1996), is currently being reviewed by the U.S. Supreme Court.
The case concerns the appeal filed by USDA Secretary Dan Glickman (“Glickman”),
who is challenging the correctness of the Ninth Circuit’s decision
to strike down the generic advertising program of the California peach,
plum, and nectarine marketing orders. Oral argument will be heard in December
or January, and the Supreme Court’s decision is due out by July.
Whether the Supreme Court reverses the Ninth Circuit’s decision
that mandatory funding of a generic commodity promotion program violated
the First Amendment, and how it decides that question, will largely determine
the long-term fate of these programs, probably for at least the next 20
years. For those interested in, or affected by, federal and state commodity
promotion programs, Wileman is obviously a “big deal.”
This article will review the arguments made in briefs filed with the
Supreme Court in Wileman. First, we will discuss the arguments made on
behalf of Glickman and those non-party (or amicus) briefs filed in support
of Glickman. We will then examine the briefs filed by those whose constitutional
challenge to the California tree fruit promotion program prevailed at
the Ninth Circuit (“Respondents”), and those non-party (or amicus)
briefs filed in support of Respondents.
In its decision, the Ninth Circuit, applying the so-called Central Hudson
test, invalidated on First Amendment grounds the USDA’s generic advertising
program for California nectarines, peaches, and plums. In so ruling, the
Ninth Circuit held that “[t]he First Amendment right of freedom of
speech includes a right not to be compelled to render financial support
for others’ speech.” (Emphasis added.) While acknowledging that
the program had increased sales, the Ninth Circuit ruled that “the
question is not whether the generic advertising program has increased
peach and nectarine sales -- it undoubtedly has.” Rather, the Court
said, the Constitutional inquiry is a much more narrow and focused one:
does the mandatory generic advertising program “sell the product
more effectively” than the specific, targeted efforts of individual
handlers that the Ninth Circuit assumed would take place in the absence
of a mandatory program. The Ninth Circuit also ruled that the USDA must
further show that the advertising program is “narrowly tailored to
achieve the desired objective.” In applying this requirement in Wileman,
the Ninth Circuit held that any program that fails to give credit against
the generic advertising assessment for brand advertising was clearly not
sufficiently narrow in its focus to pass the Ninth Circuit’s First
Amendment test.
Briefs Seeking Reversal of Ninth Circuit’s Decision--Petitioner
Glickman’s Brief
Glickman argues that the Ninth Circuit erred in analyzing these generic
promotion programs as if they suppressed or banned a handlers’ own
commercial speech. They do not. Indeed, the statute authorizing these
programs provides that “[n]o order shall be issued ... prohibiting,
regulating, or restricting the advertising or any commodity or product.”
Thus, Glickman points out, we have a regulatory framework that uses assessments
to fund collective activities having an expressive component. In similar
circumstances, this Court has applied, not the Central Hudson test for
restrictions on commercial speech but, rather, the Abood/Keller test that
is applied to compelled funding of such speech. The latter test basically
considers the relevance of the subsidized expressive activities to the
government’s regulatory objectives. Because generic advertising is
obviously relevant to the law’s objectives of stabilizing commodity
markets, promoting the sale of the commodity, and increasing returns,
the challenged programs satisfy the applicable test -- Abood/Keller.
Glickman also contends that even if the Central Hudson test is the correct
test, the Ninth Circuit erred in ruling that these programs did not satisfy
the test. Central Hudson teaches that a speech restriction is constitutional
if it (1) directly advances, (2) a substantial government interest, and
(3) the restriction is not more extensive than necessary to serve that
interest. The Ninth Circuit erred by interpreting “directly advance”
to require that generic promotion sell more product than the theoretical
efforts of individual producers. Such an interpretation needlessly raises
the constitutional bar for commercial speech restrictions. Finally, the
Ninth Circuit also misinterpreted the “reasonable fit” requirement
to mean that all such programs must offer credit for brand advertising.
This approach fails to recognize that brand credit programs substantially
undermine the key government objective of avoiding “free riders.”
National Association of State Departments of Agriculture’s Amicus
Brief
NASDA argues that the speech produced by federal marketing orders is
“government speech.” It is the government that is speaking.
Therefore, NASDA concludes, the First Amendment does not apply. The First
Amendment does not limit what the government itself can and cannot say.
It only restrains government regulation of what private parties may or
may not say. Here, the marketing orders were issued pursuant to a federal
statute to achieve defined governmental objectives. They are administered
under the supervision of the Secretary of Agriculture and by committees
that are appointed by him and subject to removal by him at any time. The
speaker in connection with these generic advertisements is, therefore,
plainly the government. Moreover, the advertising messages funded by the
mandatory assessments do not even give rise to the close association between
the message and those that fund the message that might somehow transform
otherwise permissible government speech into impermissible forced private
speech.
Washington Apple Commission’s Amicus Brief
The Washington Apple Commission argues that the correct constitutional
analysis for this case appears in Abood/Keller. Promotion programs, it
asserts, are created in response to industry requests and operate under
government supervision. The programs are designed to advance industry-wide
interests rather than providing specific benefits to individual producers.
Experience with voluntary promotion programs demonstrates that without
a mandatory assessment, these promotion programs would wither on the vine.
These programs benefit producers, consumers, and the relevant industry
as a whole. Because the programs are relevant to important governmental
objectives, they are constitutional. The Ninth Circuit’s decision
is deficient because: (1) it provides no finality to legal determinations
(because the comparative efficacy test could come out differently at different
points in time, and because, at least arguably, the track record of a
certain promotion program may not be attributed to its current promotion
campaign if that campaign is materially different from the campaign upon
which its record is based), (2) it may eliminate the opportunity to create
new commodity promotion programs (because a new promotion program necessarily
has no track record to utilize so that the comparative efficacy test could
be meaningfully applied, and (3) it is based on a fundamental misunderstanding
of the government’s interest in establishing these programs. That
interest is in expanding the entire market for a particular commodity,
it is not to increase each producer’s own share of the market.
Amicus Brief for Eleven States (California, New York, et. al.)
The eleven states argue that the Ninth Circuit erred in applying Central
Hudson. The second and third prongs of the Central Hudson commercial speech
test do not apply in this case, they claim, because commodity promotion
programs do not impair the free flow of commercial information to consumers.
The correct constitutional analysis is Abood/Keller, which protects one’s
interest in economic free association. In Abood and Keller, this Court
held that a union could force non-members to pay dues to support collective
bargaining activities and a bar association could force members to pay
dues to support relevant bar association activities. Here the intrusion
on free association rights of the individual is even less than was tolerated
in Abood and Keller. First, the speech involved here is pure commercial
speech. Second, the commodity promotion programs have a very circumscribed
range of activities in which they are authorized by law to engage. Finally,
a stable and economically viable agricultural economy is a vital governmental
interest that commodity promotion significantly bolsters. The agricultural
economy is subject to numerous de-stabilizing forces that necessitate
government intervention. These forces include variable supply, inelastic
demand, seasonality, perishability, lagged production, limited mobility
of resources, many small producers, and homogeneous products.
AFL-CIO’s Amicus Brief
The AFL-CIO argues that the Ninth Circuit erred in applying the strict
standards of Central Hudson. The Ninth Circuit erroneously decided that
the tests for determining the constitutionality of prohibitions on truthful
commercial advertising apply equally to a regulatory scheme that promotes
such advertising. This analysis, it claims, is flawed.
The AFL-CIO points out that the First Amendment protects commercial
speech in the interest of furthering the free flow of information. This
same value, which is infringed by a complete ban on truthful advertising,
is actually advanced by requiring that fruit handlers financially support
truthful generic advertising of the commodities they handle. Fruit handlers
claims are like other claims the Court has considered by members of regulated
groups urging that their compelled association with expressive activity
pursuant to a statute is unconstitutional. The Court has in the past repeatedly
rejected such claims, in cases such as Abood and Keller, when, as here,
the positive group speech activity is contemplated by the regulatory scheme
and there is a rational basis for concluding that this positive group
speech activity serves the overall goals of the regulatory scheme. In
addition, unless the challenged speech activity is political or ideological
speech at the core of protected First Amendment values, the Court has
taken a generous view in considering whether the challenged expenditures
are rationally related to the overall legislative purpose.
The AFL-CIO argues that an asserted right not to be compelled to speak
contracts the range of communication which it is the primary purpose of
the First Amendment to protect. The claim that a corporate entity has
a broad constitutional right to opt out of the affirmative portion of
an overall regulatory program has never been accepted by the Supreme Court.
Here the fruit handler is not closely and personally involved in communicating
the message, can expressly disavow the message, and is free to communicate
his or her own message on the same subject. Where all of this is true,
the Court has recognized that the government’s regulatory program
cannot be said to work a meaningful incursion on the objector’s intimate,
personal rights of conscience.
Briefs Seeking Affirmance of Ninth Circuit’s Decision
Majority (13 of 16)
Respondents’ Brief
The majority respondents argue that Central Hudson’s three prong-test
is the proper standard for scrutinizing the challenged advertising programs
and that this compelled advertising scheme fails that test. They argue
that the government’s interests in enhancing grower returns and avoiding
“free riders” are not substantial interests. They further contend
that compelled advertising does not directly advance that interest in
a direct and material way. In fact, they claim, the governmental goals
have not been accomplished at all since growers of tree fruit make less
now than in 1971. The “Carmelita report,” relied on by the government
to provide the effectiveness of its program, fails to demonstrate that
the program’s generic advertising has increased the total market
for peaches, plums, and nectarines. Compelled advertising does not avoid
free riders because the constituency of the commodity committees extends
beyond those who pay assessments. Third, the Secretary cannot show a “sufficient
fit” between his stated goals and the abridgment of the handlers’
First Amendment rights.
In addition, these respondents argue that compelled advertising violates
core First Amendment protections. Compelled advertising is presumptively
invalid because it not only disseminates messages closely associated with
respondents, but it burdens their speech and favors the committee’s
speech based on content. This association between respondents and the
compelled advertising messages forces response, endorsement, or silence
by the respondents. Strict scrutiny must be applied where compelled advertising
implicates respondents’ freedom of association, as it does here.
Finally, they argue, the driving forces that shaped the “germaneness”
test are not at work here, so that test does not apply. Moreover, even
if Keller/Abood is the proper test, advertising by the tree fruit committees
fails the “germaneness” test because compelled advertising is
not germane to the asserted governmental goals of orderly marketing, enhancing
grower returns, or to increasing overall demand.
Minority (3 of 16) Respondents’ Brief
The minority respondents argue that absent the most compelling of reasons,
the government may not appoint one citizen (or a group of citizens) to
speak for others, or force unwilling persons to pay for or convey messages
they do not freely choose to endorse. Government action that requires
the utterance of a particular message favored by the government contravenes
a person’s fundamental rights of free speech. The collective advertising
programs at issue fail to satisfy all three parts of the Central Hudson
test used by the Court to evaluate interference with commercial speech.
There is no substantial interest, it is not directly advanced, and there
is no reasonable fit between means and ends.
Moreover, they argue, perhaps because the Secretary recognizes that
he cannot possibly satisfy the three Central Hudson requirements, he seeks
to avoid the application of this test by urging this Court to apply Abood/Keller
instead. Such a routine application of this low level of scrutiny would,
in effect, legitimate all coercions of speech in a commercial context
since it is hard to imagine any such requirement that would not be “germane”
to some legitimate “regulatory objective.” The Secretary, they
argue, offers no principled justification for “this astonishing enlargement
of governmental power over the commercial marketplace of ideas.”
The Secretary has offered no convincing reason why the government should
be given any wider latitude to coerce than to forbid commercial speech.
The Court routinely reviews compelled speech claims in the commercial
context under the standards applicable to commercial speech restrictions.
Governmental compulsion of nonfactual advocacy for the purpose of manipulating
consumer opinion is subject to strict scrutiny. The Court has relaxed
constitutional scrutiny where the government has compelled disclosures
of non-controversial, purely factual information for the protection of
the public. Because the governmental regulation of advertising here is
not limited to factual information, and cannot be justified by the need
to prevent deception, the rationale for a relaxed standard does not exist.
Accordingly, the government’s regulation of speech should be reviewed
under a strict scrutiny standard. Moreover, strict scrutiny is appropriate
because the compelled advertising programs alter the content of speech.
This case is the mirror image of 44 Liquormart, where the Court stuck
down a law that barred commercial advertising in order to decrease consumption.
This law compels commercial advertising in order to increase consumption.
This law deserves the same fate, for the same reasons.
Pacific Legal Foundation’s Amicus Brief
The PLF argues that generic advertising programs should be strictly
scrutinized. While “commercial speech” has traditionally been
accorded less constitutional protection, in that the government is not
regulating to prevent commercial harms, the traditional reasons for providing
less protection for commercial speech do not apply. In addition, because
the challenged marketing orders infringe on handler’s freedom of
association, they are subject to strict scrutiny without regard to whether
they involve commercial or non-commercial association rights. The advertising
program is unconstitutional because it is not the least restrictive means
of achieving an admittedly compelling state interest, that of maintaining
a strong agricultural economy. Glickman has not and cannot show that government
advertising is better equipped to achieve this goal than advertising by
individual farmers. Because the assessments diminish the ability of farmers
to advertise on their own, their free speech rights are infringed and
the First Amendment rights of consumers are adversely affected by limiting
the commercial messages and information available to them. In any event,
the program can be accomplished through less restrictive means such as
requiring credit for individual advertising or by making the program voluntary.
Washington Legal Foundation’s Amicus Brief
The WLF argues that Glickman was right to identify Abood as the proper
legal test for compelled funding of private speech. WLF states, however,
that Glickman mischaracterizes the Abood line of cases and the proper
test to be derived from those cases. The Abood test “impose[s] an
exacting measure of First Amendment scrutiny on any government effort
to compel speech by individuals or business entities.” The Abood
test requires that the governmental act satisfy three requirements: (1)
The government must demonstrate that the compelled financial support serves
some extremely important government interest, (2) the funded activity
must be “germane” to the identified government interest, and
(3) the compulsory funding scheme must be narrowly tailored, that is,
it must not significantly add to the burdening of free speech that is
inherent in the allowance of any amount of compulsory funding of expressive
activity. These marketing orders fail both prongs one and three. The government
has no vital policy interests in running generic advertising campaigns
and the compelled advertising programs are not narrowly tailored since
there are numerous examples of less restrictive alternatives. Such examples
include: (1) taxpayer funded government advertisements, (2) grower and
handler funded government advertisements, and (3) government encouragement
of voluntary marketing cooperatives that would then fund such activities.
*
WLF argues that Glickman has sought to eliminate from the Abood test
any consideration of the “narrowly tailored” requirement. Thus
formulated, the Solicitor’s test amounts to “little more than
a rational basis review of compelled speech.” The Third Circuit in
Frame, WLF points out, held that the Abood test employed a higher standard
of scrutiny than that employed in cases like Central Hudson that involve
only regulation, not compulsion, of commercial speech. In addition, the
Court’s rationale for permitting a somewhat relaxed standard of review
for cases involving regulation of commercial speech is inapplicable to
a case concerning the compelled funding of commercial speech.
United Sheep Producers’ Amicus Brief
The USP argue that the promotion programs impose an extraordinary burden
on First Amendment freedoms, far worse than government attempts to compel
speech previously struck down by this Court. These collective promotion
programs are not government speech. The only government role is ministerial
approval, coercion, and enforcement. The content of the programs is designed,
administered, and implemented by industry committees of competitors. These
programs are not government speech because they are paid for by a small
defined group and designed and implemented by the leadership of that group.
USP also argues that the government’s justification for this program
is, at best, vague and illusory, and at worst, diabolical. Completely
lacking is any showing by Glickman that a problem exists. There is no
analysis of the economic status of the fruit growers before or during
the program. In addition, the government must make an especially compelling
case to justify compelling speech. This Court has never upheld a speech
restriction or compulsion solely because of free riders without some compelling
independent basis to restrict or require speech.
In addition, the government’s claim that compulsion is necessary
to eliminate free riders is at best disingenuous. There are various “free
riders” in many USDA compelled speech promotion programs. For example,
dairies that process less than 500,000 pounds of milk in consumer size
packages per month are made “free riders” on the milk processor
program. These“free riders” are created for political, not economic,
reasons. Thus, the existence of “free riders” cannot justify
the mandatory nature of these programs. Finally, the program’s failure
to allow credit for each handler’s own brand advertising requires
that the program be struck down. Other less restrictive alternatives are
use of tax revenues to fund these messages, and the provision of direct
subsidies or tax credits to fruit farmers. Indeed, the most successful
alternative to coerced advertising is facilitating the use of agricultural
cooperatives. The success of agricultural cooperatives demonstrates that
the benefits of the tree fruit program can be had without its unconstitutional
and compulsory nature. The “speech tax” at issue in this case
is unconstitutional.
American Advertising Federation’s Amicus Brief
The AAF brief, unlike the others we have discussed, consists almost
entirely of a historical review of advertising practices and legal restrictions
over the course of American history. The AAF contends that advertising
was ubiquitous in the early American press. Although states regulated
trades widely, the sole advertising restrictions were on unlawful products
and services. The virtual absence of advertising restrictions is consistent
with the Colonial conception of a “free press” that included
advertising. The absence of restrictions on advertising is also consistent
with the Framer’s political philosophy that equated liberty and property.
State legislative practice at the time of passage of the Fourteenth Amendment
is consistent with the view that truthful commercial messages regarding
lawful products and services are entitled to full Constitutional protection.
Lower protection for commercial speech is a 20th Century phenomenon that
has its origins in disenchantment with economic liberties and confusion
with economic due process. Assessed under the level of scrutiny accorded
fully protected speech, this becomes an extremely easy case. The government
obviously cannot compel a speaker to endorse or propound a particular
view. Moreover, whether assessed under Central Hudson or Abood, the Secretary’s
program is clearly unconstitutional.
Sun-Maid Growers of California’s Amicus Brief
Sun-Maid, the raisin marketing cooperative owned by 1,200 raisin growers,
and the largest single marketer of raisins in the world, argues that the
large number of briefs filed on both sides speaks to the importance of
this case. Sun-Maid’s purpose in adding its voice to the many others,
it says, is to discuss two issues which collectively demonstrate that
this program cannot withstand Constitutional scrutiny under any test.
First, Sun-Maid argues, government-compelled advertising programs force
all members of an industry to speak with a single voice, and to be identified
with a single message. Such programs subvert the ability of independent
growers, acting alone or through cooperatives, to associate and deliver
their own messages. They also dilute a grower’s or cooperative’s
ability to develop its own brand identity and consistent advertising messages.
In Sun-Maid’s case, the “generic” advertising of “California
raisins” has actually functioned to promote the products of Sun-Maid’s
competitors, even though Sun-Maid was the single largest “funder”
of such advertising.
Second, Sun-Maid argues, even if the government does have a permissible
interest in requiring growers and sellers to buy more advertising than
they would pay for of their own volition in order to avoid “free
riders,” the burdens on free speech must be no more significant than
necessary, and there are clearly less burdensome alternatives that have
not been considered. For example, cooperatives like Sun-Maid provide a
voluntary alternative through which growers may gain the advantages and
economies of scale without being forced to support messages they oppose.
At a bare minimum, to be constitutional, any compelled advertising program
must be required to provide full credit for voluntary branded advertising,
thereby allowing any “free rider” concerns to be addressed without
unnecessary coercion. Such credits must be full, fairly administered,
and available to all who engage in branded promotion.
Conclusion
We have discussed the key arguments made in briefs filed with the Supreme
Court by parties and amici in Glickman v. Wileman. Necessarily, by choosing
to highlight the major points made in these briefs, we have omitted the
other arguments and points made. Of course, the ultimate judges (or should
we say “justices”) of the merit in each of these arguments are
sitting on the Supreme Court. By next July, we all will find out which
arguments were found to be persuasive to those nine justices. The future
of this significant aspect of this country’s agricultural economy
hangs in the balance.
The authors are co-authors, along with John Roberts of Hogan &
Hartson, of one of the briefs discussed herein -- the amicus brief filed
on behalf of the National Association of State Departments of Agriculture.
* Ironically, the WLF in discussing various less restrictive
alternatives seems to implicitly support the NASDA amicus argument in
support of Glickman that the subject programs engage in “government
speech” not subject to the First Amendment. The WLF says, “Respondents
would have no cause for complaint if a generic advertising program for
peaches, plums, and nectarines were funded out of tax revenues. That might
even be true if the government imposed a tax on growers and handlers in
order to raise sufficient revenue to pay for such a program.” WLF
Amicus Brief at 26 (emphasis added). That, NASDA may argue, is essentially
what the challenged program does.
Richard T. Rossier, Esq. and Wayne R. Watkinson, Esq.
McLeod, Watkinson & Miller
One Massachusetts Avenue, NW
Washington, DC 20001
Office: (202) 842-2345
FAX: (202) 408-7763
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