Fruit Growers' Generic Advertising Program Not Compelled Speech, Supreme Court Rules

By P. Cameron DeVore

A government program requiring California fruit growers to fund generic advertising about their products does not trigger First Amendment concerns, the Supreme Court ruled on June 25.

In Glickman v. Wileman Bros. & Elliott, Inc., the Court decided by a narrow 5-4 margin that a USDA advertising requirement was “simply a question of economic policy for Congress and the Executive to resolve” — in short, purely a case of economic regulation.

In a decision that surprised many observers, the Court upheld Department of Agriculture marketing orders imposing assessments on peach, plum, and nectarine growers and handlers to finance generic product advertising and promotion. The Ninth Circuit had struck down the compelled advertising program as impermissible under both Central Hudson Part 3 (requiring “direct and material advancement of a substantial governmental purpose”), and Part 4 (“no more extensive than necessary”).

The Court, in an opinion written by Justice Stevens for Justices Breyer, Ginsburg, Kennedy, and O’Connor, reversed the Ninth Circuit — not because it failed to properly apply Central Hudson Parts 3 and 4 but because application of Central Hudson was “inconsistent with the very nature and purpose of the collective action program at issue here.”

Thus the Court decided that Wileman, which had been treated in the lower courts as a commercial speech case, was not a First Amendment matter after all. Speech advocates had hoped the Court would use Wileman as a further opportunity to reaffirm commercial speech rights — in this case the unconstitutionality of government-compelled commercial speech — in the wake of 44 Liquormart’s strong restatement of advertising rights last year.

Justice Stevens, however, distinguished Wileman from other lines of First Amendment authorities that address restrictions on speech; actual or symbolic compelled speech; and the compelled endorsement of political speech (see box). Justice Stevens, a strong proponent of enhanced First Amendment protection of commercial speech, as evidenced by his opinion in 44 Liquormart, was obviously comfortable with treating the federal marketing program as a non-First Amendment matter.

The Court also rejected respondents’ arguments that the generic advertising assessments impinged on their speech rights because they “reduce[d] the amount of money that producers have available to conduct their own advertising.”

The Court recognized that the regulation “does compel financial contributions that are used to fund advertising,” but distinguished Abood, which had struck down a Michigan requirement that employees pay union dues even though they funded political activities and speech unrelated to collective bargaining.

In Wileman, in contrast, the Court said that “requiring respondents to pay the assessments cannot be said to engender any crisis of conscience.” The Court concluded:

“Although one may indeed question the wisdom of such a program, its debatable features are insufficient to warrant special First Amendment scrutiny. It was therefore error for the Court of Appeals to rely on Central Hudson for the purpose of testing the constitutionality of market order assessments for promotional advertising....The mere fact that one or more producers ‘do not wish to foster’ generic advertising of their products is not a sufficient reason for overriding the judgment of the majority of market participants, bureaucrats, and legislators who have concluded that such programs are beneficial.”

Justice Souter, joined by Chief Justice Rehnquist and Justices Scalia and Thomas, dissented and would have affirmed the Ninth Circuit result:

“The legitimacy of governmental regulation does not validate coerced subsidies for speech that the government cannot show to be reasonably necessary to implement the regulation, and the very reasons for recognizing that commercial speech falls within the scope of First Amendment protection likewise justifies the protection of those who object to subsidizing it against their will.”

The dissent disagreed that the compelled speech precedents distinguished by the Court were based solely on the impermissibility of requiring political, religious, or doctrinal expression:

“What stood against the claim of social unimportance for commercial speech was not only the consumer’s interest in receiving information..., but the commercial speaker’s own economic interest in promoting his wares. ‘[W]e may assume that the advertiser’s interest is a purely economic one. That hardly disqualifies him from protection under the First Amendment.’” (Citing Virginia Pharmacy.)

Justice Souter stated that he believed it was correct to apply Central Hudson, and that the government’s regulation here would not pass even Part 2 of the test, requiring a substantial governmental interest, because the authorization of the “compelled advertising programs is so random and so randomly implemented, in light of [the government’s] stated purposes, as to unsettle any inference that the Government’s asserted interest is either substantial or even real.” Similarly, he would have held that the program failed Central Hudson Part 3 because the government failed to show how the program directly advanced its interests — which “alone should be fatal to the Government here, which has the burden to establish the factual justification for ordering a subsidy for commercial speech. Mere speculation about one or another possibility does not carry the burden....There is no evidence of this in the record here.”

Finally, Justice Souter agreed with the Ninth Circuit’s conclusion under Central Hudson Part 4 that the failure of the mandatory scheme to deny growers/handlers any “credit toward their assessments for some or all of their individual advertising expenditures” would be “a far less restrictive and more precise way to achieve the Government’s stated interests.” Justice Souter concluded:

“Although the Government’s obligation is not a heavy one in Central Hudson and the cases that follow it [i.e., is not ‘strict scrutiny’], we have understood it to call for some showing beyond plausibility, and there has been none here. I would accordingly affirm the judgment of the Ninth Circuit.”

Justice Thomas, joined by Justice Scalia in part, separately dissented because he “continue[s] to disagree with the use of the Central Hudson balancing test and the discounted weight given to commercial speech generally,” as expressed in his concurrence in 44 Liquormart. “Because the regulation at issue here fails even the more lenient Central Hudson test, however, it, a fortiori, would fail the higher standard that should be applied to all speech, whether commercial or not.” Justice Thomas concluded:

“What we are now left with, if we are to take the majority opinion at face value, is one of two disturbing consequences: either (1) paying for advertising is not speech at all, while such activities as draft card burning, flag burning, armband wearing, public sleeping, and nude dancing are, or (2) compelling payment for third party communication does not implicate speech, and thus the Government would be free to force payment for a whole variety of expressive conduct that it could not restrict. In either case, surely we have lost our way.”

Glickman v. Wileman Bros. & Elliott, Inc., 58 F.3d 1367 (9th Cir. 1995), __ U.S. __, __ S. Ct. __, 1997 WL 345357 (No. 95-1184).

Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980).

44 Liquormart, Inc. v. Rhode Island, 517 U.S. __, 116 S. Ct. 1495 (1996).

Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977).

Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976).