No. 99-1347
In the Supreme Court of the United States
CAL-ALMOND, INC., ET AL., PETITIONERS
v.
UNITED STATES DEPARTMENT OF AGRICULTURE
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE RESPONDENT IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
DAVID W. OGDEN
Acting Assistant Attorney
General
BARBARA C. BIDDLE
AUGUST E. FLENTJE
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Whether California almond handlers may, consistent with the First Amendment,
be required to fund a generic advertising and promotion program for almonds
and almond products under an agricultural marketing order that is similar
to, but more flexible than, those upheld in Glickman v. Wileman Brothers
& Elliott, Inc., 521 U.S. 457 (1997).
In the Supreme Court of the United States
No. 99-1347
CAL-ALMOND, INC., ET AL., PETITIONERS
v.
UNITED STATES DEPARTMENT OF AGRICULTURE
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE RESPONDENT IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-11a) is reported at 192
F.3d 1272. The opinion of the district court (Pet. App. 12a-21a) is unreported.
JURISDICTION
The judgment of the court of appeals was entered on September 21, 1999.
A petition for rehearing was denied on November 12, 1999 (Pet. App. 275a).
The petition for a writ of certiorari was filed on February 10, 2000. The
jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. Almond handlers (i.e., processors and distributors) in the State of California
are regulated by a marketing order promulgated by the Secretary of Agriculture
pursuant to the Agricultural Marketing Agreement Act of 1937 (AMAA), 7 U.S.C.
601 et seq. The AMAA was enacted "in order to establish and maintain
orderly marketing conditions and fair prices for agricultural commodities."
Glickman v. Wileman Bros. & Elliott, Inc., 521 U.S. 457, 461 (1997)
(citing 7 U.S.C. 602(1)).
The AMAA authorizes the Secretary of Agriculture to issue marketing orders
for certain commodities, including almonds. 7 U.S.C. 608c(1) and (2). Such
marketing orders may include limits on the quantity, quality, grade, and
size of the commodity that may be marketed. 7 U.S.C. 608c(6)(A). They may
also provide for "production research, marketing research and development
projects designed to assist, improve, or promote the marketing, distribution,
and consumption" of the commodity. 7 U.S.C. 608c(6)(I). Those projects
may-with respect to certain commodities, such as almonds-include "paid
advertising." Ibid. The projects are funded by mandatory assessments
on handlers. Ibid; see also 7 U.S.C. 610(b)(2)(ii) (handlers shall pay assessments
equal to their pro rata share of expenses of administering marketing orders).
The Act provides that the marketing orders for almonds and a few other commodities
may authorize a handler to receive credit against its assessment for amounts
that it spends on certain advertising of its own. 7 U.S.C. 608c(6)(I).
Before promulgating a marketing order for a commodity, the Secretary of
Agriculture must conduct a formal rulemaking proceeding and, in most cases,
obtain approval of the marketing order either from two-thirds of the producers
of the commodity covered by the order or from the producers who market two-thirds
of the volume of the commodity. 7 U.S.C. 608c(8). The marketing order is
administered by a committee, which generally is composed of producers and
handlers of the commodity, under the supervision of the Secretary. 7 U.S.C.
608c(7)(C), 610. The Secretary appoints the members of the committee and
may remove them at any time. See, e.g., 7 C.F.R. 981.33 and 981.40(d) (relating
to the Almond Board of California). The committee recommends an annual budget
for administering the marketing order, which may include expenditures for
advertising and other promotional activities. The Secretary may accept or
reject the recommended budget. 7 U.S.C. 608c(12); 7 C.F.R. 981.38, 981.41.
After adopting a budget, the Secretary promulgates a regulation prescribing
assessments on handlers to fund the budgeted activities. See 7 U.S.C. 610(c);
7 C.F.R. 981.41(e), 981.80, 981.81(a).
A marketing order must be discontinued in either of two situations. The
Secretary of Agriculture must terminate or suspend a marketing order if
he finds that it "obstructs or does not tend to effectuate the declared
policy" of the AMAA. 7 U.S.C. 608c(16)(A)(i). The Secretary also must
terminate a marketing order if he determines that a majority of the producers
do not support it. 7 U.S.C. 608c(16)(B).
2. This case concerns the marketing order for California almonds, which
is administered by the Almond Board of California, a committee of almond
growers and handlers appointed by the Secretary of Agriculture. 7 C.F.R.
Pt. 981. Four members of the Almond Board are nominated by cooperative growers
and handlers, four are nominated by independent growers and handlers, and
two are nominated by whichever group accounts for more than 50 percent of
almonds delivered or handled during the current crop year. 7 C.F.R. 981.31(a)-(f).
Since 1971, the marketing order has authorized the Almond Board to conduct
generic advertising and promotion programs for California almonds. See 36
Fed. Reg. 20,887. The marketing order requires that seven members of the
Almond Board concur in any proposal to establish or continue a promotional
plan, thereby assuring at least some degree of consensus between representatives
of the cooperatives and the independents. 7 C.F.R. 981.40(e). The Almond
Board's activities, including its generic advertising and promotion programs,
are funded by mandatory assessments on handlers based on the volume of almonds
that they handle. See 7 C.F.R. 981.41(a), 981.81(a). As authorized by the
AMAA, the marketing order permits an almond handler to receive a credit
against a portion of its assessment for conducting its own promotional activities,
including paid advertising, provided that those activities meet certain
regulatory guidelines.
The almond marketing order has contained different provisions at different
times with respect to which promotional expenses may qualify for a credit:
The "creditable advertising" provision was in place through the
1992-1993 crop year, and the "credit-back" provision has been
in place since the 1993-1994 crop year. See 7 C.F.R. 981.441 (Pet. App.
302a-308a); 7 C.F.R. 981.441 (1992) (Pet. App. 311a-321a). Under the creditable
advertising provision, almond handlers were allowed a credit of up to 100
% for expenditures on qualifying advertising and sample distribution, although
no credit was allowed if the advertising mentioned non-complementary products
or nuts other than almonds. 7 C.F.R. 981.441(c)(3) (1992). The current credit-back
provision was designed to give almond handlers more flexibility in the types
of promotional activities for which they could receive a credit. See 7 C.F.R.
981.441. Under the credit-back provision, almond handlers are allowed a
credit of up to 66 2/3 % for expenditures on 14 categories of promotional
and public relations activities, including advertising directed at "end-users"
or "trade or industrial users," marketing research, retail in-store
promotional activities, coupons, and trade fairs. 7 C.F.R. 981.441(a), (e)(4)(ii)(A)
through (M).1
3. Petitioners are current or former handlers of California almonds. Pet.
App. 12a. They challenged, first at the administrative level and then in
federal court, the constitutionality of the generic advertising program
established under the almond marketing order, including its creditable and
credit-back provisions. See id. at 139a.
a. An administrative law judge sustained petitioners' challenge. The Department
of Agriculture appealed to the judicial officer, who stayed the matter pending
this Court's resolution of Wileman Brothers. The judicial officer then relied
on Wileman Brothers to reject petitioners' challenge. Pet. App. 3a-4a, 139a.
b. Petitioners then filed a complaint in United States District Court for
the Eastern District of California pursuant to 7 U.S.C. 608c(15)(B). The
district court granted the government's motion to dismiss. Pet. App. 12a-21a.
c. The court of appeals affirmed. Pet. App. 1a-11a.
The court of appeals concluded that the generic advertising program for
California almonds, like the generic advertising programs for California
tree fruits in Wileman Brothers, is part of a "regulatory scheme"
in which the growers' and handlers' "freedom to act independently is
already constrained." Pet. App. 6a (quoting Wileman Bros., 521 U.S.
at 469). The court therefore concluded that this Court's mode of analysis
in Wileman Brothers was equally applicable to this case. Id. at 5a-6a. The
court then proceeded to consider whether the generic advertising program
for California almonds exhibits the "[t]hree characteristics"
that distinguished the generic advertising programs in Wileman Brothers
from laws that abridge the freedom of speech.
First, the court of appeals concluded that the generic advertising program
for California almonds does not impose a restraint on petitioners' freedom
to communicate any message to any audience. Pet. App. 6a-7a; see Wileman
Bros., 521 U.S. at 469. The court rejected petitioners' argument that the
credit provisions render the generic advertising program in this case more
constitutionally suspect than the generic advertising program in Wileman
Brothers. The court explained that the mere fact that a generic advertising
program, or particular features of that program, may reduce the amount that
a handler would otherwise spend on its own advertising does not amount to
a restriction on speech. Pet. App. 7a.
Second, the court of appeals concluded that the generic advertising program
for California almonds does not compel any almond handler to engage in actual
or symbolic speech. Pet. App. 8a-9a; see Wileman Bros., 521 U.S. at 469.
The court rejected petitioners' argument that the credit provisions create
such compulsion, observing that "[h]andlers can decline to advertise
directly and simply pay their assessments." Pet. App. 8a. Indeed, said
the court, "[r]ather than supporting [petitioners'] assertion that
Wileman is distinguishable, the flexibility provided by the creditable and
credit-back programs instead supports the conclusion that the assessments
here are indeed constitutional," because they "potentially limit
the extent to which almond handlers must fund advertising to which they
object." Id. at 8a-9a.
Finally, the court of appeals concluded that the generic advertising program
for California almonds does not require handlers to endorse or finance political
or ideological views. Pet. App. 9a-10a; see Wileman Bros., 521 U.S. at 469-470.
The court observed that petitioners' "objections to the advertising
programs and the assessments imposed thereunder do not appear to be ideological
or 'to engender any crisis of conscience.'" Pet. App. 10a (quoting
Wileman Bros., 521 U.S. at 472). In any event, said the court, even if petitioners'
objections were ideological, the generic advertising program would still
be constitutionally permissible, because the messages conveyed by the generic
advertisements and the individual advertisements for which handlers may
receive credit are "germane to the purposes of the Almond Order and
the [AMAA]." Pet. App. 9a. The court found that "there can be
no dispute that messages, generic or branded, promoting almond sales are
germane to the Almond Order's and the [AMAA's] purpose, which is 'to assist,
improve, or promote the marketing, distribution, and consumption' of almonds."
Ibid. (quoting 7 U.S.C. 608c(6)(I)).
ARGUMENT
The decision below is correct and does not conflict with any decision of
this Court or any other court of appeals. The court of appeals properly
applied the First Amendment principles recently set forth by this Court
in Glickman v. Wileman Brothers & Elliott, Inc., 521 U.S. 457 (1997),
to a generic advertising program that, while similar to the program in Wileman
Brothers, is more accommodating of the interests of objecting participants.
This Court has previously denied a petition for certiorari that presented
the same challenge by some of the same petitioners to the same generic advertising
program. Cal-Almond, Inc. v. Department of Agriculture, 525 U.S. 818 (1998).
There is no more reason now than there was two years ago for the Court to
grant such a petition.2
1. This Court held in Wileman Brothers that handlers may, as part of a regulatory
scheme for the marketing of an agricultural commodity, be required to fund
generic advertising for that commodity. The Court identified three characteristics
that distinguish such generic advertising programs from laws that abridge
the freedom of speech protected by the First Amendment: (1) the programs
"impose no restraint on the freedom of any producer to communicate
any message to any audience," (2) the programs "do not compel
any person to engage in any actual or symbolic speech," and (3) the
programs "do not compel the producers to endorse or to finance any
political or ideological views," much less views with which they disagree.
Wileman Bros., 521 U.S. at 469-470.
As the court of appeals recognized, the generic advertising program for
California almonds is distinguishable, for the same three reasons, from
laws that have been held to violate the First Amendment. Indeed, the generic
advertising program in this case is even further removed from such unconstitutional
laws than were the generic advertising programs in Wileman Brothers, because
handlers of California almonds, unlike handlers of California tree fruits,
may receive a credit against their assessments for their own advertising
and promotional activities under rules promulgated by the Secretary of Agriculture.
See 7 C.F.R. 981.441 (1999) (Pet. App. 302a-308a); 7 C.F.R. 981.441 (1992)
(Pet. App. 311a-321a). In Wileman Brothers, three of the dissenting Justices
observed that such a credit mechanism, "[o]n its face, at least,"
would be "a far less restrictive and more precise way to achieve the
Government's stated interests [in promoting an agricultural commodity],
eliminating as it would much of the burden on [handlers'] speech without
diminishing the total amount of advertising for a particular commodity."
521 U.S. at 502 (Souter, J., dissenting) (noting that the AMAA authorizes
such credits for, inter alia, almonds, although not for tree fruits).
Petitioners nonetheless contend (Pet. 22-25) that such credit mechanisms
render the generic advertising program here more constitutionally problematic,
in three respects, than the generic advertising programs in Wileman Brothers.
Petitioners are mistaken.
First, the almond marketing order does not, as petitioners assert (Pet.
22), "impose a restraint on the freedom of the producer to communicate
the message of his choice to the public." A handler is free under the
almond marketing order to communicate any message that it chooses. See 7
U.S.C. 608c(10) (no marketing order may "prohibit[], regulat[e], or
restrict[] the advertising of any commodity or product"). The marketing
order simply limits the types of advertising for which an almond handler
may receive a credit against its assessment for the generic advertising
program. An almond handler who chooses to engage in advertising that is
not eligible for a credit is thus in precisely the same position as every
fruit handler in Wileman Brothers, which involved marketing orders that,
as noted above, did not contain any credit mechanism. The Court recognized
in Wileman Brothers that the mere fact that assessments for generic advertising
"may indirectly lead to a reduction in a handler's individual advertising
budget does not itself amount to a restriction on speech." 521 U.S.
at 470.
Second, the almond marketing order does not, as petitioners assert (Pet.
24), "compel handlers to engage in actual speech." A handler is
free under the marketing order to refrain from engaging in any speech whatsoever.
To be sure, such a handler, like every handler in Wileman Brothers, must
pay the full amount of its assessment under the marketing order, without
any credit for its own advertising. But Wileman Brothers rejected the argument
that a requirement to contribute to a generic advertising program constitutes
"compelled speech." See 521 U.S. at 470-471 ("The use of
assessments to pay for advertising does not require [handlers] to repeat
an objectionable message out of their own mouths, require them to use their
own property to convey an antagonistic ideological message, force them to
respond to a hostile message when they would prefer to remain silent, or
require them to be publicly identified or associated with another's message.")
(internal quotation marks and citation omitted).3
Third, the almond marketing order does not, as petitioners assert (Pet.
24-25), "vest the power to exercise subjective judgments about the
content of private speech in a non-neutral decisionmaker," Blue Diamond.
Under the marketing order, any almond marketing program, including its credit
mechanism, must be approved by at least seven members of the Almond Board.
7 C.F.R. 981.40(e). Neither cooperatives (such as Blue Diamond) nor independents
can ever hold more than six seats on the Almond Board. 7 C.F.R. 981.31.
More importantly, the final decision concerning marketing programs or credit
mechanisms rests not with the Almond Board but with the Secretary of Agriculture,
an impartial decisionmaker. 7 C.F.R. 981.441(f). Cf. Chicago Teachers Union
v. Hudson, 475 U.S. 292, 308 (1986) (finding a procedure inadequate that
vested the union, an interested party, with sole control over complaints
that agency fees were used to fund ideological speech).
2. Petitioners also contend (Pet. 20) that the almond marketing order imposes
a "content-based financial burden on commercial speech," and thus
should be evaluated not under Wileman Brothers, but instead under the three-part
test announced in Central Hudson Gas & Electric Corp. v. Public Service
Commission, 447 U.S. 557, 564 (1980). As Wileman Brothers made clear, however,
Central Hudson, a case involving restrictions on commercial speech, is inapplicable
in cases, such as this one, involving compelled funding of commercial speech
under a "collective action program." Wileman Bros., 521 U.S. at
474 (observing that "the Central Hudson test is inconsistent with the
very nature and purpose" of such programs); see also id. at 469 &
n.12 (explaining that such programs are distinguishable from the regulation
at issue in Central Hudson because they "impose no restraint on the
freedom of any producer to communicate any message to any audience").4
The mere fact that petitioners, unlike the handlers in Wileman Brothers,
may satisfy their "compelled funding" obligation either by paying
the full assessment or by engaging in their own creditable advertising does
not bring this case within the reach of Central Hudson or other cases finding
content-based restrictions on speech to be unconstitutional.5
3. The Court has had two previous opportunities to consider, on the merits,
the applicability of Wileman Brothers to the almond marketing order. The
Court declined both opportunities.
a. In 1996, the Secretary of Agriculture filed a petition for a writ of
certiorari in United States Department of Agriculture v. Cal-Almond, Inc.,
No. 95-1879 (Cal-Almond I), which challenged the Ninth Circuit's earlier
decision that the almond marketing order violated the First Amendment under
the Central Hudson standard. See Cal-Almond, Inc. v. United States Dep't
of Agriculture, 14 F.3d 429 (1993), opinion after remand, 67 F.3d 874 (9th
Cir. 1995), cert. denied, 519 U.S. 819 (1996). The Secretary explained that
a similar First Amendment issue was already pending before the Court in
Wileman Brothers, which "provide[d] a more appropriate vehicle for
resolution of [that] issue," and therefore asked the Court to hold
the petition in Cal-Almond I while considering the petition in Wileman Brothers.
Pet. at 16-17, Cal-Almond I, supra.
On June 27, 1997, two days after the Court issued its decision in Wileman
Brothers, the Court granted the Secretary's petition in Cal-Almond I, vacated
the Ninth Circuit's judgment, and remanded the case to the Ninth Circuit
"for further consideration in light of [Wileman Brothers]." Department
of Agriculture v. Cal-Almond, Inc., 521 U.S. 1113, 1113-1114 (1997). The
remand order suggests that the Court understood that the constitutionality
of the almond marketing order, including its credit mechanism, is governed
by Wileman Brothers, not Central Hudson.
b. In 1998, after the Ninth Circuit, citing Wileman Brothers, remanded the
case to the district court with instructions to dismiss the First Amendment
claim, various almond handlers, including some of the petitioners here,
petitioned for a writ of certiorari in Cal-Almond, Inc. v. United States
Department of Agriculture, No. 97-1935 (Cal-Almond II). That petition argued,
as does the petition in this case, that the almond marketing order is distinguishable
from the marketing orders in Wileman Brothers because an almond handler,
unlike the handlers of tree fruits in Wileman Brothers, may receive a credit
against its assessment for certain advertising of its own.6 The Court denied
the petition. Cal-Almond II, 525 U.S. 818 (1998). No intervening decision
of this Court or any court of appeals provides any reason to do otherwise
here.
4. Finally, petitioners' challenge to the almond marketing order implicates
no issue of general significance. That challenge is predicated solely on
availability
of a mechanism, which was not available in Wileman Brothers, whereby a handler
may receive a credit against its assessment for its own advertising. Although
the AMAA and three marketing orders authorize the Secretary of Agriculture
to implement credit mechanisms for certain other commodities,7 we have been
informed by the Department of Agriculture that no credit mechanism is actually
in effect (or has been in effect in recent years) for any other commodity.
Accordingly, if the Court were to grant the petition for certiorari in this
case, the Court's decision on the merits would have no tangible effect outside
the California almond industry.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
DAVID W. OGDEN
Acting Assistant Attorney
General
BARBARA C. BIDDLE
AUGUST E. FLENTJE
Attorneys
MAY 2000
1 The credit-back program also allows for a credit for joint promotion of
a complementary product, such as trail mix, in an amount up to the portion
of the product that is made up of almonds. 7 C.F.R. 981.441(e)(4)(iii).
2 Petitioners do not contend that the decision below conflicts with the
decision of any other court of appeals. Petitioners do note (Pet. 26) that
two courts of appeals have reached different conclusions with respect to
the applicability of the Wileman Brothers analysis to so-called "stand-alone"
marketing programs. Compare Goetz v. Glickman, 149 F.3d 1131 (10th Cir.
1998), cert. denied, 525 U.S. 1102 (1999), with United Foods, Inc. v. United
States, 197 F.3d 221 (6th Cir. 1999). That dispute, however, has nothing
to do with the issues raised by petitioners, could not be addressed in this
case, and does not, therefore, provide a reason to grant the petition.
3 Nor do the credit provisions of the almond marketing order even encourage,
much less require, any handler to endorse or finance an ideological message.
See Wileman Bros., 521 U.S. at 469-470. Those provisions do not distinguish
between advertising messages based on their ideological content. See id.
at 473 (noting that advertising to promote a commodity is not "ideological").
They instead distinguish between advertising messages based on whether,
in the view of the Almond Board and ultimately the Secretary of Agriculture,
they "promote the sale, consumption or use of California almonds,"
7 C.F.R. 981.441(e)(2)-i.e., whether the individual advertising for which
the handler seeks a credit is comparable, for purposes of the government's
interest in promoting almonds, to the generic advertising for which the
handler would otherwise be required to contribute. The credit provisions
are thus directly "'germane' to the purpose for which compelled association
was justified." Wileman Bros., 521 U.S. at 473.
4 Petitioners thus err in asserting that "the decision below conflicts
with this Court's holdings" in cases such as 44 Liquormart, Inc. v.
Rhode Island, 517 U.S. 484 (1996), Rubin v. Coors Brewing Co., 514 U.S.
476 (1995), Virginia State Board of Pharmacy v. Virginia Citizens Consumer
Council, Inc., 425 U.S. 748 (1976), and Central Hudson itself. Pet. 17,
19 (capitalization omitted). Those cases involved a complete ban on a variety
of commercial speech, either generally or in a particular context. The almond
marketing order, in contrast, imposes no restriction whatsoever on the commercial
speech in which handlers may engage.
5 The dissenting Justices in Wileman Brothers surely understood that any
marketing order that gave handlers credit for their own advertising could
permissibly be content-based. Otherwise, a business that handled almonds
and multiple other commodities could receive a credit against its assessment
under the almond marketing order for its advertising of all of those commodities,
whether or not the advertising had anything to do with almonds. Such a content-neutral
credit, which is the only sort of credit that petitioners' theory would
permit, would not serve the governmental interest, underlying the marketing
order, of promoting a particular commodity. Cf. Wileman Bros., 521 U.S.
at 502 (Souter, J., dissenting) (explaining that credit mechanisms, such
as that authorized under the AMAA for almonds, "achieve the Government's
stated interests," because they do not "diminish[] the total amount
of advertising for a particular commodity") (emphasis added).
6 The earlier Cal-Almond case involved only the credit provision that was
in effect before the 1993-1994 crop year.
7 See 7 U.S.C. 608c(6)(I); see also 7 C.F.R. 932.45(a)(2) ("The committee,
with the approval of the Secretary, may provide for crediting a portion
of a [California olive] handler's direct expenditures for paid brand advertising
for olives.") (emphasis added); 7 C.F.R. 982.58 (hazelnuts or filberts
grown in Oregon or Washington); 7 C.F.R. 989.53(b) (California raisins).