WASHINGTON ó In a move that leaves the future of the beef checkoff and other similar commodity promotions in question, the U.S. Supreme Court ruled Monday that a mandatory advertising campaign for the mushroom industry violates the First Amendment guarantee of free speech.
The six-to-three ruling was a victory for mushroom producer United Foods Inc., which argued that a mandatory mushroom promotional campaign forced the company to pay for ads that benefited its competitors.
``Just as the First Amendment may prevent the government from prohibiting speech, the amendment may prevent the government from compelling individuals to express certain views,'' Justice Anthony M. Kennedy wrote for the majority.
The Justice Department took the case to the Supreme Court, arguing that the generic ads benefit all producers, and that the Agriculture Department has an interest in seeing an entire industry succeed.
The government said a 6th U.S. Circuit Court of Appeals decision in favor of United Foods threatened similar marketing programs for milk, beef, pork, eggs and cotton. Federal and state regulators run dozens of generic ad programs worth hundreds of millions of dollars. The ``Got Milk?'' campaign, featuring celebrities wearing a fake milk mustache, costs about $100 million a year.
Producers pay into a common pool, which is then used to orchestrate generic ads.
The court previously ruled that joint advertisements are constitutional in heavily regulated industries such as California fruit production.
Kennedy said the mushroom case is different, because the mushroom market is less regulated and mushroom producers do not cooperate the way the fruit producers do.
It is not clear where Monday's ruling leaves other industry ad campaigns. Applying the reasoning in Monday's case, the constitutionality of individual ad campaigns would be judged by the degree of cohesion and regulation in each industry.
The beef industry, like the mushroom industry, is essentially unregulated.
Chief Justice William H. Rehnquist and Justices John Paul Stevens, Antonin Scalia, David Souter and Clarence Thomas joined Kennedy in the majority.
Justices Stephen G. Breyer, Ruth Bader Ginsburg and Sandra Day O'Connor dissented.
United Foods refused to pay its assessment since 1996, arguing that common ads disproportionately helped the company's smaller competitors. Why, the company asked, should it be forced to spend money for speech, in this case advertisements, that harmed its bottom line?
When United Foods refused to pay, the federal government moved to enforce a 1990 law forming a joint ``Mushroom Council'' and authorizing collection of the advertising money.
Action stalled while the Supreme Court considered the 1997 case. In a five-to-four ruling, the court had said then that generic ads issued under a federal marketing order were ``a species of economic regulation that should enjoy the same strong presumption of validity that we accord to other policy judgments made by Congress.''
In other words, the generic ads should not trigger a free-speech argument under the First Amendment, the court said then.
Lower courts agreed with the government that the 1997 decision applied to United Foods. But in 1999, a three-judge panel of the 6th Circuit went the other way. ``The mushroom business is entirely different from the collectivized California fruit tree business,'' the appeals court said.
The Supreme Court agreed, and upheld the lower court.
Kennedy agreed with the appeals court that the mushroom case is different because the mushroom market is less regulated and mushroom producers do not cooperate the way the fruit producers do.
U.S. Agriculture Secretary Ann Veneman said USDA has begun a review of the Courtís ruling to determine what actions should be taken with respect to the Mushroom Research And Promotion Program.
"USDA generally regards promotion activities conducted under federal marketing agreement and order programs and federal research and promotion programs to be effective tools for market enhancement," Veneman said in a statement.
"USDA continues to believe that national commodity research and promotion programs offer opportunities to maintain, develop and expand markets for agricultural products both at home and abroad."
"We are still analyzing the ... decision," says Dan Hammond, chairman of the Cattlemen's Beef Promotion and Research Board.
Hammond insists the ruling does not necessarily apply to the beef checkoff.
"The mushroom program is as different from the beef checkoff as the mushroom industry is from the beef industry," he contends. "First, the mushroom assessment is paid by handlers. One handler preferred to advertise its own product, rather than advertise generic products. In the case of the beef checkoff, the assessment is paid by producers, each of whom benefits from an increase in beef demand.
"Second, unlike the mushroom industry the beef industry does deal with federal regulations. Examples include the federal inspection system, the grading system, and the Packers and Stockyards Administration. With these differences in mind, it would be inappropriate to assume any implications of the mushroom decision with regard to the beef checkoff program."
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