Gerawan Farming, Inc. v. Lyons

• Decision Date: 27 November 2000
• Docket Number: No. S080610.,S080610.
• Citation: 101 Cal.Rptr.2d 470,24 Cal.4th 468,12 P.3d 720
• Parties: GERAWAN FARMING, INC., Plaintiff and Appellant, v. William J. LYONS, Jr., as Secretary, etc., et al., Defendants and Respondents.
• Court: California Supreme Court

101 Cal.Rptr.2d 470

24 Cal.4th 468

12 P.3d 720

GERAWAN FARMING, INC., Plaintiff and Appellant, v. William J. LYONS, Jr., as Secretary, etc., et al., Defendants and Respondents.

No. S080610.

Supreme Court of California.

November 27, 2000.

Brian C. Leighton, Clovis; Mayer, Brown & Platt, Michael W. McConnell, Chicago, IL., and Sharon Swingle, Washington, Dist. of Columbia, for Plaintiff and Appellant.

Donald Lescoulie, Fresno, and James A. Moody, Washington, Dist. of Columbia, for Matsui Nursery, Inc., Delano Farms, Inc., the Susan Neill Company, Country Eggs, Inc., Rosemary Farms, Inc., Duarte Nursery, Inc., Bidart Bros., Inc., and Britton-Konynenburg Partners as Amici Curiae on behalf of Plaintiff and Appellant.

Law Offices of Manuel S. Klausner, Los Angeles, Manuel Klausner and Erik S. Jaffe, Washington, Dist. of Columbia, for the Center for Individual Freedom as Amicus Curiae on behalf of Plaintiff and Appellant.

Thomas E. Campagne & Associates and Jeffrey C. Heeren, Fresno, for Wileman Bros. & Elliott, Inc., as Amicus Curiae on behalf of Plaintiff and Appellant.

Daniel J. Popeo, R. Shawn Gunnarson; Cadwalader, Wickersham & Taft, Steven G. Brody, New York, NY, Christine P. Jackson; and Susan Liebeler for Washington Legal Foundation as Amicus Curiae on behalf of Plaintiff and Appellant.

Bill Lockyer, Attorney General, Roderick E. Walston and Richard Frank, Chief Assistant Attorneys General, Charles W. Getz IV and Mary E. Hackenbracht, Assistant Attorneys General, Richard M. Thaihammer, Ellen M. Peter, Edna Walz and Tracy L. Winsor, Deputy Attorneys General, for Defendants and Respondents. Jennifer Friesen; Dowling, Aaron & Keeler, Dale Ikeda and Philip D. Kopp, Fresno, for the California Asparagus Commission, California Cut Flower Commission, California Pepper Commission and the California Tomato Commission as Amici Curiae on behalf of Defendants and Respondents.

Baker, Manock & Jensen, Kendall L. Manock, Robert D. Wilkinson, Linda B. Othman, Fresno, and John A. Bezmalinovic for the California Table Grape Commission and the California Stone Fruit Coalition as Amici Curiae on behalf of Defendants and Respondents.

Kahn, Soares & Conway, George H. Soares, Dale A. Stern, Sacramento, and Robert S. Hedrick for the California Apple Commission, California Avocado Commission, California Date Commission, California Egg Commission, California Forest Products Commission, California Grape Rootstock Improvement Commission, California Kiwifruit Commission, California Pistachio Commission, California Rice Commission, California Strawberry Commission, California Walnut Commission and Lodi-Woodbridge Winegrape Commission as Amici Curiae on behalf of Defendants and Respondents.

Jonathan P. Hiatt, James B. Coppress; Altshuler, Berzon, Nussbaum, Berzon & Rubin and Scott A. Kronland, San Francisco, for the American Federation of Labor and Congress of Industrial Organizations as Amici Curiae on behalf of Defendants and Respondents.

Manatt, Phelps & Phillips, Catherine A. Conway and Vincent M. Waldman, Los Angeles, for Sun-Maid Growers of California as Amicus Curiae on behalf of Defendants and Respondents.

Marie M. Moffat, Lawrence C. Yee, Dina E. Goldman, San Francisco; Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Steven L. Mayer, Todd E. Thompson and Margaret W. Rosequist, San Francisco, for the State Bar of California as Amicus Curiae on behalf of Defendants and Respondents.

MOSK, J.

The First Amendment to the Constitution of the United States, one of the provisions of the Bill of Rights, states: "Congress shall make no law ... abridging the freedom of speech, or of the press ...." (U.S. Const., 1st Amend.)

Article I of the Constitution of the State of California, entitled the Declaration of Rights, states in subdivision (a) of section 2: "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."

In Glickman v. Wileman Brothers & Elliott, Inc. (1997) 521 U.S. 457, 117 S.Ct. 2130, 138 L.Ed.2d 585 (hereafter sometimes Glickman ), a case of first impression, the United States Supreme Court, by a bare five-to-four majority, concluded that a marketing order issued by the Secretary of Agriculture of the United States did not implicate any right to freedom of speech under the First Amendment by compelling funding of generic advertising—that is, advertising for a commodity as such, without reference to brand, etc.

In this cause, itself a case of first impression, we consider whether a marketing order issued by the Secretary of Food and Agriculture of the State of California implicates any right to freedom of speech under either the First Amendment or article I by compelling funding of generic advertising.

As we shall explain, we conclude that the marketing order in question does not implicate any right to freedom of speech under the First Amendment, but does indeed implicate such a right under article I.

I

The background to this action—historical, statutory, and administrative—is as follows.

A

In the course of the Great Depression, Congress enacted the Agricultural Marketing Agreement Act of 1937 or the AMAA. (See generally Act of June 3, 1937, ch. 296, 50 Stat. 246 et seq., as amended, codified at 7 U.S.C. § 601 et seq.)

The AMAA declared, as one of Congress's policies, the establishing and maintaining of orderly marketing conditions for agricultural commodities in order to raise and support prices for their producers.

To effectuate this policy, the AMAA authorized the Secretary of Agriculture of the United States to enter into "marketing agreements," which are contract-like arrangements with the producers and handlers of agricultural commodities concerning marketing matters, and provided that the making of any such agreement should not be held violative of any federal antitrust law.

To the same end, the AMAA also authorized the Secretary of Agriculture to issue "marketing orders," which are regulations governing marketing matters for the producers and handlers of agricultural commodities. It provided for participation in the administration of such orders by the regulated producers and handlers themselves. It substantially restricted the terms of such orders generally to the limitation on total quantity marketed, the allotment of amounts for purchase, the allotment of amounts for marketing, the determination of the existence and extent of any surplus, the establishment of reserve pools, and, impliedly, the institution of grading and standards and the conduct of research. It also mandated that the regulated producers and handlers had to contribute funds to cover related expenses. It authorized the secretary to terminate as well as issue such orders. It generally provided that no such order could become effective unless approved or favored, as specified therein, by the regulated producers. Similarly, it generally provided that no such order could remain effective unless favored, as specified therein, by the regulated producers. It authorized the secretary to conduct referenda, expressly with regard to the coming into effect of such an order and impliedly with regard to its remaining in effect. In light of features of this sort, the mechanism of regulation that such an order sets up is, essentially, one of "self-regulation" by the regulated producers and handlers. (H.R.Rep. No. 99-271, 1st Sess., pt. 1, pp. 195-196 (1985), reprinted in 1985 U.S.Code Cong. & Admin.News, p. 1299.)

Since 1937, Congress has amended the AMAA on several occasions. As a general matter, the AMAA has retained the core of the provisions described above, but has expanded beyond their periphery. Notably, although it continues to restrict the terms of marketing orders for agricultural commodities that it authorizes the Secretary of Agriculture to impose, it now permits more than it did originally. Specifically, it today allows, among other terms, the undertaking of research and development projects, encompassing, for plums and 25 other specified commodities,¹ "any form of marketing promotion including paid advertising," "the expense of which is "to be paid from funds collected pursuant to the marketing order" in question. (7 U.S.C. § 608c(6)(I).) It first allowed a term of this sort, albeit not extending to advertising, in 1954. It first allowed one extending to advertising for a single specified commodity in 1962. It then did the same for 14 specified commodities, including plums, in 1965. It did likewise for the remaining 11 specified commodities, one or more at a time, in 1970, 1971, 1978, 1980, 1983, 1988, and 1999. From all that appears, and plainly with respect to plums (see H.R.Rep. No. 89-846, 1st Sess., pp. 2-4 (1965), reprinted in 1965 U.S.Code Cong. & Admin. News, pp. 4143-4144), it has allowed terms extending to advertising in order to satisfy requests made by, among others, the regulated producers themselves.

Marketing Order No. 917 (see generally 7 C.F.R. § 917 (2000)), entitled the California Tree Fruit Agreement, was issued by the Secretary of Agriculture pursuant to the AMAA in various years in its various subparts, deriving ultimately from Marketing Order No. 36, issued in 1939. It presently applies to pears and peaches, and formerly applied to plums as well. It provides for the establishment of a "Control Committee," whose members are drawn, largely if not exclusively, from the regulated producers and handlers themselves. It provides too for a "Commodity Committee" for each of the fruits, which is effectively filled with or controlled by the regulated producers themselves. In addition, and among other things, it provides for the Control Committee's administration of its terms. It also provides for each Commodity Committee's undertaking of research and development projects, encompassing "any form of marketing promotion including paid advertising," "the expenses of which ...