U.S and Department of Agriculture v United Foods Inc.

• Decision Date: 25 June 2001
• Docket Number: 00276
• Citation: 150 L.Ed.2d 438,533 U.S. 405,121 S.Ct. 2334
• Parties: UNITED STATES and DEPARTMENT OF AGRICULTURE, PETITIONERS v. UNITED FOODS, INC.SUPREME COURT OF THE UNITED STATES
• Court: U.S. Supreme Court

533 U.S. 405

121 S.Ct. 2334

150 L.Ed.2d 438

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press

UNITED STATES and DEPARTMENT OF AGRICULTURE, PETITIONERS v UNITED FOODS, INC.

No. 00-276

SUPREME COURT OF THE UNITED STATES

Argued April 17, 2001

June 25, 2001

Syllabus

The Mushroom Promotion, Research, and Consumer Information Act mandates that fresh mushroom handlers pay assessments used primarily to fund advertisements promoting mushroom sales. Respondent refused to pay the assessment, claiming that it violates the First Amendment. It filed a petition challenging the assessment with the Secretary of Agriculture, and the United States filed an enforcement action in the District Court. After the administrative appeal was denied, respondent sought review in the District Court, which consolidated the two cases. In granting the Government summary judgment, the court found dispositive the decision in Glickman v. Wileman Brothers & Elliott, Inc., 521 U.S. 457, that the First Amendment was not violated when agricultural marketing orders, as part of a larger regulatory marketing scheme, required producers of California tree fruit to pay assessments for product advertising. The Sixth Circuit reversed, holding that Glickman did not control because the mandated payments in this case were not part of a comprehensive statutory agricultural marketing program.

Held: The assessment requirement violates the First Amendment. Pp. 2-11.

(a) Even viewing the expression here as commercial speech, there is no basis under Glickman or this Court's other precedents to sustain the assessments. The First Amendment may prevent the government from, inter alia, compelling individuals to pay subsidies for speech to which they object. See Abood v. Detroit Bd. of Ed., 431 U.S. 209; Keller v. State Bar of Cal., 496 U.S. 1. Such precedents provide the beginning point for analysis here. Respondent wants to convey the message that its brand of mushrooms is superior to those grown by other producers, and it objects to being charged for a contrary message which seems to be favored by a majority of producers. First Amendment values are at serious risk if the government can compel a citizen or group of citizens to subsidize speech on the side that it favors; and there is no apparent principle distinguishing out of hand minor debates about whether a branded mushroom is better than just any mushroom. Thus, the compelled funding here must pass First Amendment scrutiny. Pp. 3-5.

(b) The program sustained in Glickman differs from the one at issue here in a fundamental respect: The mandated assessments for speech in that case were ancillary to a more comprehensive program restricting marketing autonomy. This Court stressed in Glickman that the entire regulatory program must be considered in resolving a case. There, California tree fruits were marketed under detailed marketing orders that had displaced competition to such an extent that they had an antitrust exemption; the Court presumed that the producers compelled to contribute funds for cooperative advertising were bound together and required by statute to market their products according to cooperative rules. Those important features are not present here. Most of the funds at issue are used for generic advertising; and there are no marketing orders regulating mushroom production and sales, no antitrust exemption, and nothing preventing individual producers from making their own marketing decisions. Mushroom growers are not forced to associate as a group that makes cooperative decisions. Although respondent is required simply to support speech by others, not to utter speech itself, that mandated support is contrary to the First Amendment principles set forth in cases involving expression by groups which include persons who object to the speech but, nevertheless, must remain group members by law or necessity. See, e.g., Abood, supra, Keller, supra. Properly applied, Abood's rule protecting against compelled assessments for some speech requires this scheme to be invalidated. Before addressing whether a conflict with freedom of belief exists, the threshold inquiry must be whether there is some state imposed obligation making group membership less than voluntary; for it is only the overriding associational purpose which allows any compelled subsidy for speech in the first place. In Abood, Keller, and Glickman, the objecting members were required to associate for purposes other than the compelled subsidies for speech. Here, however, the only program the Government contends the assessments serve is the very advertising scheme in question. Were it sufficient to say speech is germane to itself, Abood's and Keller's limits would be empty of meaning and significance. No corollary to Glickman's cooperative marketing structure exists here; the expression respondent is required to support is not germane to an association's purpose independent from the speech itself; and Abood's rationale extends to the party who objects to the compelled support for this speech. There is also no suggestion here that the assessments are necessary to make voluntary advertisements nonmisleading for consumers. Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, distinguished. Because the Government did not raise in the Sixth Circuit its theory that this case is permissible government speech, this Court will not entertain that argument here. Pp. 5-11.197 F.3d 221, affirmed.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, Scalia, Souter, and Thomas, JJ., joined.

Justice Kennedy delivered the opinion of the Court.

Four Terms ago, in Glickman v. Wileman Brothers & Elliott, Inc., 521 U.S. 457 (1997), the Court rejected a First Amendment challenge to the constitutionality of a series of agricultural marketing orders that, as part of a larger regulatory marketing scheme, required producers of certain California tree fruit to pay assessments for product advertising. In this case a federal statute mandates assessments on handlers of fresh mushrooms to fund advertising for the product. The Court of Appeals for the Sixth Circuit determined the mandated payments were not part of a more comprehensive statutory program for agricultural marketing, thus dictating a different result than in Glickman. It held the assessment requirement unconstitutional, and we granted certiorari. 530 U.S. 1009 (2000).

The statute in question, enacted by Congress in 1990, is the Mushroom Promotion, Research, and Consumer Information Act, 104 Stat. 3854, 7 U.S.C. § 6101 et seq. The Act authorizes the Secretary of Agriculture to establish a Mushroom Council to pursue the statute's goals. Mushroom producers and importers, as defined by the statute, submit nominations from among their group to the Secretary, who then designates the Council membership. 7 U.S.C. § 6104(b)(1)(B), 6102(6), 6102(11). To fund its programs, the Act allows the Council to impose mandatory assessments upon handlers of fresh mushrooms in an amount not to exceed one cent per pound of mushrooms produced or imported. §6104(g)(2). The assessments can be used for "projects of mushroom promotion, research, consumer information, and industry information." §6104(c)(4). It is undisputed, though, that most monies raised by the assessments are spent for generic advertising to promote mushroom sales.

Respondent United Foods, Inc., is a large agricultural enterprise based in Tennessee. It grows and distributes many crops and products, including fresh mushrooms. In 1996 respondent refused to pay its mandatory assessments under the Act. The forced subsidy for generic advertising, it contended, is a violation of the First Amendment. Respondent challenged the assessments in a petition filed with the Secretary. The United States filed an action in the United States District Court for the Western District of Tennessee, seeking an order compelling respondent to pay. Both matters were stayed pending this Court's decision in Glickman.

After Glickman was decided, the Administrative Law Judge dismissed respondent's petition, and the Judicial Officer of the Department of Agriculture affirmed. Respondent sought review in District Court, and its suit was consolidated with the Government's enforcement action. The District Court, holding Glickman dispositive of the First Amendment challenge, granted the Government's motion for summary judgment. App. to Pet. for Cert. 18a.

The Court of Appeals for the Sixth Circuit held this case is not controlled by Glickman and reversed the District Court. 197 F.3d 221 (1999). We agree with the Court of Appeals and now affirm.

A quarter of a century ago, the Court held that commercial speech, usually defined as speech that does no more than propose a commercial transaction, is protected by the First Amendment. Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 762 (1976). "The commercial marketplace, like other spheres of our social and cultural life, provides a forum where ideas and information flourish." Edenfield v. Fane, 507 U.S. 761, 767 (1993).

We have used standards for determining the validity of speech regulations which accord less protection to commercial speech than to other expression. See, e.g., Ibid.; Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N. Y., 447 U.S. 557 (1980). That approach, in turn, has been subject to some criticism. See, e.g., Glickman, supra, at 504 (Thomas, J., dissenting); 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 518 (1996)...