Ruling backs crops' promo boards
An important court decision last summer fortified the widespread practice of California farmers who finance the promotion and advertisement of their crops.
When the U.S. Supreme Court refused to take a case ruled on by the 9th Circuit Court of Appeals, the lower court's decision stood. The lack of action by the high court attracted scant attention, even though the case had been argued in various courts for 14 years.
The legal action swirled around the California Table Grape Commission located in Fresno. This grower-controlled and grower-supported organization spends as much as $12 million a year of grower funds to promote consumer and institutional purchases of table grapes.
The collection and expenditure of the money occurs under the authority of the California Department of Food and Agriculture. Because 57 other similar commissions and marketing agreements operate under the same authority, the decision has wide ramifications among the state's agricultural marketers.
The 9th Circuit Court reached the decision in 2009 that the law authorizing the Table Grape Commission does not violate the First Amendment of the U.S. Constitution. Lawyers for a handful of growers contended that it does.
With only 500 members contributing to the commission's multi-million-dollar budget, the amount some of them pay is substantial. The annual fee to growers is allocated on a per-box basis, so those who ship large volumes pay more than those who ship lighter volumes. The few large-volume shippers who originated the legal action must have believed the argument about the First Amendment offered them the best chance for success, but they were denied.
What stood was the decision by U.S. District Court Judge Oliver Wanger issued in Fresno in April 2008. He ruled that the free speech of the commission, a creation of the state Legislature, is that of the government and thereby immune from constitutional challenge.
When questioned on that basis, Judge Wanger's ruling was upheld at the circuit court level.
Some aspect of the law that enables farm producers to pool their money to support generic advertising and promotion has been challenged before. Grower-contributors sometimes feel they can gain more through brand-specific sales messages than they do under the generic blanket. Some invest in both.
Commissions and marketing agreements administering the industry-wide collection of funds and their expenditure have an important tool at their disposal. The cooperative spirit engendered by the provision can serve as a glue that helps an industry hold together and thrive.
Some of the organizations that operate under this umbrella don't consider sales or promotion at all. They are allowed to pool resources to support research or evaluate industry performance.
Without the flexibility of the marketing authority, we never would have known that California cows are as happy as they are. One of those bodies that has taken advantage of the provision for years is the California Milk Advisory Board. It and its messages have survived several challenges.
It is important to know that the only money allocated to these pools comes from the grower-producers or other industry entities that make up a given commodity spectrum. The state's only involvement is in oversight and administration.
Federal authorization is also available in certain circumstances. In all cases, at the state or federal level, participants vote industry-wide every five years or more often to either renew or discontinue the mechanism for their specific industry, and to specify the amount they contribute.
As helpful as these tools can be and have been, their operation can create differences. The latest legal outcome proves that disagreement can be handled as well.
CONTACT Don Curlee at email@example.com