Pelts & Skins, L.L.C. v. Jenkins, CIV.A.02-CV-384.

• Decision Date: 24 April 2003
• Docket Number: No. CIV.A.02-CV-384.,CIV.A.02-CV-384.
• Citation: 259 F.Supp.2d 482
• Parties: PELTS & SKINS, L.L.C., v. James JENKINS, Jr., Secretary of the Louisiana Department of Wildlife and Fisheries.
• Court: U.S. District Court — Middle District of Louisiana

259 F.Supp.2d 482

PELTS & SKINS, L.L.C., v. James JENKINS, Jr., Secretary of the Louisiana Department of Wildlife and Fisheries.

No. CIV.A.02-CV-384.

United States District Court, M.D. Louisiana.

April 24, 2003.

Alex J. Peragine, Jennifer A. Lee, Peragine & Neill, L.L.C., Covington, LA, for Plaintiff.

C. Berwick Duval, II, Stanwood R. Duval, Duval, Funderburk, Sundbery & Lovell, Houma, LA, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

JOHN V. PARKER, District Judge.

PROLOGUE

The Supreme Court has held that the Constitution prohibits the government from compelling the producers of mushrooms to pay for generic advertising to which they object, but allows the government to compel the producers of peaches to pay for such advertising. Resolution of this case requires the court to determine whether Louisiana alligator producers are more like mushroom producers than like peach producers. The answer to that riddle determines whether a Louisiana statute compelling farmers of alligators to fund generic advertising treads upon the First Amendment rights of plaintiff. For reasons that follow, this court ultimately concludes that the alligator resembles the mushroom more than the peach, and thus, that the First Amendment stands between alligator farmers and Louisiana's mandatory assessments to pay for a generic alligator advertising program.

BACKGROUND

This matter came before the court on a motion for summary judgment by plaintiff, Pelts & Skins, L.L.C. ("Pelts & Skins"), for judgment in the form of a permanent injunction against defendant, James Jenkins, Jr., Secretary of the Louisiana Department of Wildlife and Fisheries ("DWF") (doc. 29). Defendant opposes the motion (doc. 36). Thereafter, the parties agreed that the February 7, 2003 hearing on plaintiffs motion would serve as a submission of the case on the merits (doc. 43). All evidence submitted in support of and in opposition to the motion for summary judgment, as well as all other exhibits filed at the hearing, have been received by stipulation of the parties on the merits of the case. After consideration of the law, evidence, and arguments of counsel, the court renders its findings of fact and conclusions of law in accordance with Fed.R.Civ.P. 52(a), as follows:

FINDINGS OF FACT

1. Plaintiffs alligator farming operation is conditioned upon payment of certain mandatory fees ("license fees" and "tag fees") to the DWF. These fees are deposited into both the Louisiana Fur and Alligator Public Education and Marketing Fund and the Louisiana Alligator Resource Fund. A portion of revenues from these funds is then used by the DWF, as recommended by the Alligator Advisory Council, to finance generic marketing of alligator products without differentiating any particular type, quality, or brand of alligator product.¹ For example, the DWF's public education and marketing programs are primarily carried out by Don Ashley and Christine Brewton. Ashley attends trade shows, implements and designs airport booths, and produces literature promoting alligator products. Brewton visits various fashion houses promoting Louisiana alligator products and has implemented various educational information materials setting forth the "marsh to market" program of alligator skins.

2. Plaintiff has its own internal system of grading quality. Its marketing strategy is based on communicating the quality and uniqueness of its branded alligator product. Plaintiff does the majority of its business in Europe.

3. Plaintiff is "vehemently"² opposed to the DWF's marketing message, even if, as the DWF argues, generic marketing does not dilute product image in the mind of the consumer and does not reduce producer profits by lowering prices.³

4. According to the DWF's expert, Charles C. Theriot, of the total alligator industry related revenues received in the fiscal year ending 2002, approximately 92% were credited to the Resource Fund and 6% to the Education and Marketing Fund. From 1997 to 2002, the total alligator-related generic advertising and marketing expenditures made by the DWF from the Resource Fund were: 1% in 1997, 15% in 1998; 16% in 1999; 20% in 2000; 16% in 2001; and 14% in 2002.

5. Mr. Theriot also calculates that if educational expenditures made by the DWF are included as part of the DWF's alligator-related generic advertising and marketing expenditures and are included with those expenditures, then the total alligator-related generic advertising and marketing expenditures as a percentage of the total revenues realized by the DWF were: 1% in 1997, 9% in 1998, 12% in 1999, 22% in 2000, 16% in 2001, and 21% in 2002.⁴ 6. Defendant argues in brief that licensing fees are the only sources of income for the Education and Marketing Fund and are de minimis compared to the tag fees that account for the majority of the Resource Fund. Defendant argues further that the percentage of the total income used for generic marketing and public education is less than 25% of the annual funds received and that approximately 75% is used for maintaining proper research habitat, law enforcement, and so on. First of all, plaintiff maintains that it exports in excess of 80,000 raw skins per year and pays annual tag fees in excess of $320,000. Moreover, Mr. Theriot's report maintains that the plaintiffs own alligator-related payments were approximately 22.6%, 25.4%, and 25.1% of the total alligator-related revenue realized by the DWF from all sources for the fiscal years ending 2000, 2001, and 2002, respectively. The fact that plaintiff was responsible for approximately one quarter of the DWF's alligator revenue undermines defendant's de minimis argument. To trample upon one's First Amendment rights "just a little bit" does not rectify the fact that those rights are being trampled upon.

7. The DWF controls and supervises all wildlife within the state, including fish, and is charged with management, protection, conservation, and replenishment of the wildlife and fish. The DWF also regulates the shipping of skins. La.R.S. 36:602(B).

8. The DWF has statutory authority to establish regulations and licensing procedures regarding the taking, possessing, and shipping of all alligators, raw alligator skins, and alligator parts. La.R.S. 56:251(A)(2)(a)(iii).

9. Pursuant to La.R.S. 56:253(C)(1), every resident alligator hunter or farmer or nonresident alligator hunter must attach a tag to any out-of-state shipment of alligators or alligator skins. The tag must be secured from the DWF and must bear a certain color and serial number. Before shipping alligator or raw alligator skins out of state, La.R.S. 56:253(C)(2)(a) requires resident alligator hunters and farmers and nonresident hunters to pay to the DWF an alligator shipping label fee for each alligator and an alligator hide tag fee for each raw skin. The alligator shipping label fee and the alligator hide tag fee may be no more than four dollars per alligator or skin.⁵ No alligator part may be shipped out of state without having affixed a label bearing the DWF license number and other information to the shipment. La.R.S. 56:253(D).

10. Every resident alligator hunter must pay a $25 annual license fee to DWF before commencing business. La. R.S. 56:251(2)(a)(i). Payment of an additional $25 entitles a duly licensed resident alligator hunter to another license authorizing him to be accompanied by one resident assistant while hunting. La.R.S. 56:251(2)(a)(h). Only bona fide residents may apply for a resident alligator hunter's license. La.R.S. 56:252(A).

11. The Louisiana Alligator Resource Fund, intended to defray the cost of alligator programs, is established by La.R.S. 56:279. This Fund is maintained by revenues received by the state from tag fees imposed on alligator hunters, alligator farmers, alligator shipping label fees on the sale of alligators, and all revenues derived from any other alligator-regulated fees and from the severance tax on alligator skins provided for in La.R.S. 56:256. La.R.S. 56:279(C)(1).⁶

12. Pursuant to La.R.S. 56:279(B)(1)-(5), the Resource Fund's five specific goals are as follows:

(1) To provide salaries and financial support including associated indirect cost for the following positions, to provide a minimum of two full-time technical positions (biologists) and eight nontechnical positions such as computer operators, secretaries, and wildlife specialists existing within the fur and refuge division of the Louisiana Department of Wildlife and Fisheries.

(2) To assist with funding for law enforcement activities associated with the alligator farm industry when surplus funds are available and recommended by the Louisiana Fur and Alligator Council.

(3) To assist with funding marketing programs recommended by the Louisiana Fur and Alligator Advisory Council

⁷

when surplus funds are available.

(4) To actively fund research on all aspects involved with alligator conservation and to develop the techniques needed to enhance the commercial alligator industry.

(5) To assist in funding management of the alligator population through proper management, harvest, and farm facility management.

(Emphasis added).

13. The Louisiana Fur and Alligator Public Education and Marketing Fund is established by La.R.S. 56:266. This Fund is maintained by the $25 license fees imposed upon trappers and alligator hunters as required by La.R.S. 56:251.⁸

14. Pursuant to La.R.S. 56:266(B)(1)-(7), the Education and Marketing Fund's seven specific goals are as follows:

(1) To educate the public regarding the need for trapping as a sound wildlife management tool and regarding the logic of managing furbearing species and alligators as renewable resources.

(2) To identify the current consumers of Louisiana furs and alligator hides.

(3) To identify present and potential Louisiana fur and alligator marketing problems, obstacles, and related significant issues.

(4) To strengthen existing markets and develop new markets and marketing strategies for...