United Foods v. USA

• Decision Date: 23 September 1999
• Docket Number: No. 98-6436,98-6436
• Citation: 197 F.3d 221
• Parties: (6th Cir. 1999) United Foods, Inc., Plaintiff-Appellant, v. United States of America; United States Department Of Agriculture, Defendants-Appellees. Argued:
• Court: U.S. Court of Appeals — Sixth Circuit

Page 221

197 F.3d 221 (6th Cir. 1999)

United Foods, Inc., Plaintiff-Appellant, v. United States of America; United States Department Of Agriculture, Defendants-Appellees.

No. 98-6436

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Argued: September 23, 1999

Decided and Filed: November 23, 1999

Appeal from the United States District Court for the Western District of Tennessee at Jackson, Nos. 96-01252; 98-01082--James D. Todd, District Judge.

Bradley A. MacLean, Tara L. Swafford, FARRIS, WARFIELD & KANADAY, Nashville, Tennessee, for Appellant.

Barbara C. Biddle, August E. Flentje, Barbara C. Biddle, U.S. DEPARTMENT OF JUSTICE, CIVIL DIVISION, APPELLATE STAFF, Washington, D.C., for Appellees.

Before: MERRITT and CLAY, Circuit

Judges; ALDRICH,^* District Judge.

OPINION

MERRITT, Circuit Judge.

In this case of compelled, commercial speech challenged under the First Amendment, the Department of Agriculture requires the plaintiff, a mushroom producer, to contribute funds for advertising mushrooms, on a regional basis, as authorized by the Mushroom Promotion, Research, and Consumer Information Act of 1990, 7 U.S.C. § 6101 et seq. ¹ The District Court upheld the Act and the government's action compelling payments for mushroom advertising. The plaintiff claims that other mushroom producers shape the content of the advertising to its disadvantage and that the administrative process allows a majority of producers to create advertising to its detriment. The issue before us is whether the answer to the First Amendment question presented here should be the same as in the recent case of Glickman v. Wileman Bros. & Elliott, Inc., 521 U.S. 457 (1997), in which the Supreme Court in a controversial 5-4 decision ² upheld a similar agricultural advertising program in the heavily regulated California tree fruits business (peaches, plums and nectarines). But unlike the tree fruit business in Wileman, the mushroom growing business in the case before us is unregulated, except for the enforcement of a regional mushroom advertising program.

The government argues that the degree of regulation or "collectivization" of an industry should make no First Amendment difference on the compelled advertising issue so long as the compelled advertising is nonpolitical and so long as the plaintiff is not restricted in its own advertising. The plaintiff contends to the contrary that the constitutionality of the compelled speech under the 1990 Mushroom Act-in light of Wileman-must turn on the degree of regulation of the industry. The question for us is whether the degree of government regulation of an industry controls the outcome or whether the government is right that this is irrelevant under Wileman.

In prior restraint and compelled speech cases involving nonbroadcast political speech, the First Amendment prohibition is nearly absolute, Near v. Minnesota, 283 U.S. 697 (1931), holding that newspapers have a right to publish without prior restraint, West Virginia v. Barnett, 319 U.S. 624 (1943), holding that schoolchildren may not be compelled to join in a flag salute ceremony, and Miami Herald v. Tornillo, 418 U.S. 241 (1974), holding that newspapers may not be compelled to publish a reply by political candidates. But commercial speech compelled by government is governed by a different, and as yet unsettled, set of principles which require a court to balance a number of factors according to its judgment concerning the welfare of buyers and sellers in the market place.

In the Wileman case, the Supreme Court emphasized and reemphasized that the compelled advertising program for California tree fruits under the Agricultural Marketing Agreement Act of 1937 contemplates "a uniform price to all producers in a particular market," a "policy of collective, rather than competitive, marketing" and an exemption from the antitrust laws in order "to avoid unreasonable fluctuation in supplies and prices." Wileman, 521 U.S. at 461. In his opinion for five members of the Court, Justice Stevens repeatedly "stress[ed] the importance" of the fact that the advertising takes place "as a part of a broader collective enterprise in which [the producers'] freedom to act independently is already constrained by the regulatory scheme." Id. at 469. In contrast, the mushroom market has not been collectivized, exempted from antitrust laws, subjected to a uniform price, or otherwise subsidized through price supports or restrictions on supply. Except for the compelled advertising program assessing growers based on their volume of mushroom production, there appears to be a relatively free market in mushrooms, both processed and fresh. ³

On the other side of the ledger, the government correctly argues that Justice Stevens also emphasized repeatedly in his opinion that the compelled agricultural advertising in Wileman is not a restriction on commercial advertising as in cases that have invalidated such regulation, see, e.g., Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557 (1980), because separate, individual, producer advertising of tree fruits is not prohibited or restricted. See Wileman, 521 U.S. at 469-70. The opinion emphasizes that the test for compelled advertising is not the same as the four-part test for restrictions on advertising set out in Central Hudson. See id. The government also correctly argues that Justice Stevens repeatedly emphasizes that no "symbolic," "ideological" or "political" speech is involved in the tree fruit advertising. See id. Justice Stevens' opinion sets out these various factors concisely when he says that the compelled advertising of tree fruits passes muster "because (1) the generic advertising of California peaches and nectarines is unquestionably germane to the purposes of the marketing orders [which collectivize the industry] and, (2) in any event, the assessments are not used to fund ideological activities." Wileman, 521 U.S. at 473 (emphasis added).

The question for us then is whether these two elements -- (1) germaneness to a valid, comprehensive, regulatory scheme and (2) nonideological content -- are independent of each other and each provide a sufficient basis for upholding compelled commercial speech. In other words, even though the mushroom advertising program before us is not "germane" to any collective program setting prices or supply, does the fact that the advertising is "nonideological" or "nonpolitical" in nature mean that it should be permitted under the First Amendment?

We do not read the majority opinion in Wileman as saying that any compelled commercial speech that is nonpolitical or nonsymbolic or nonideological does not warrant First Amendment protection. We conclude that the explanation for the Wileman decision is to be found in the fact that the California tree fruit industry is fully collectivized and is no longer a part of a free market, as well as in the nonpolitical nature of the compelled speech. The majority uses this concept of collectivization and the nonideological nature of the advertising together. The conjunction "and" -- germaneness "and" nonpolitical -- is used in the Court's holding. Our interpretation of Wileman is that if either of the two elements is missing -- either the collectivization of the industry or the purely commercial nature of the advertising -- the First Amendment invalidates the compelled commercial speech, absent some other compelling justification not present in the case before us. The Court's holding in Wileman, we believe, is that nonideological, compelled, commercial speech is justified in the context of the extensive regulation of an industry but not otherwise. The purpose of this principle joining regulation and content is to deter free riders who take advantage of their monopoly power resulting from regulation of price...