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Federal judge: Apple growers can't be forced to fund generic ads

By The Associated Press
04.01.03

Editor's note: The Associated Press reported on April 10 that Washington Apple Commission officials had decided not to appeal U.S. District Judge Edward Shea's ruling and would instead begin shutting down the agency.

YAKIMA, Wash. — The payments that apple growers are forced to make to support the Washington Apple Commission and its promotion of the state's apple crop are unconstitutional, a federal judge ruled yesterday.

The ruling by U.S. District Judge Edward Shea in Richland calls into question the future of the 66-year-old commission and the state's two dozen similar panels that promote other products.

It's a debate being heard in courts across the country. Livestock producers and farmers in several states have sued, contending that forced subsidies for advertising that benefits the competition is unconstitutional.

"The apple commission, although not surprised ... is very disappointed with the court's decision," said Peter Spadoni, a commission lawyer.

"However, when this case began, we realized it would not end at trial — no matter which side prevailed, it would be appealed."

The Washington Apple Commission — one of the nation's oldest and largest commodity commissions — gets 25 cents per 42-pound box of apples from growers in the state. With an 86-million-box crop for the 2002-2003 season, that's $21.5 million in assessments, or about 90% of the commission's annual budget.

Commission officials plan to ask the court to stay its decision so grower assessments can continue to be collected during the appeal.

"Otherwise, there's no reason to appeal because the apple commission wouldn't exist," Spadoni said. "Without a stay, the court would be effectively denying us our opportunity to appeal."

The Wenatchee-based commission initiated the lawsuit in 2001, hoping for an affirmation of its right to collect the mandatory assessments.

The commission argued at a March 18 hearing that it is a state agency and as such is empowered to collect fees for promotion of the state's No. 1 crop.

The commission chose two defendants as proxies for the state's apple growers in the class action. Two other groups successfully petitioned to join the case in U.S. District Court — seven organic apple growers from north-central Washington and three Yakima warehouses.

The organic growers were dissatisfied with the commission's promotion of their apples, contending they received the short end of the stick in the mix with conventionally grown apples.

The warehouses, which have their own labels and brands of fruit, contended they should not be forced to subsidize advertising for smaller operations.

The lawsuit was prompted by the 2001 U.S. Supreme Court decision U.S. v. United Foods that a Bells, Tenn., mushroom producer did not have to pay into a Mushroom Council pool for generic advertising that would benefit its competitors.

Such forced payments were found unconstitutional, in violation of the First Amendment protection for free speech.

In his decision yesterday, Shea ruled that such was the case with the apple commission, which from 1998-2002 spent between 62.5% and 85% of its budget on marketing activities.

"The court has determined that the commission's principal purpose is speech," Shea wrote. "United Foods held that compelled subsidies were unconstitutional where their principal object is speech itself."


Previous
Apple commission sues to keep cut from producers
Washington state group asks federal judge to back state-mandated fees used for generic industry ads. 03.18.03

Related

Organic farmers must continue to fund 'Got Milk?' ads

Federal judge rejects Pennsylvania couple's argument that requiring them to pay fees forces them to fund speech that they oppose. 03.26.03

Florida citrus tax gets ax
State judge finds fee that pays for generic advertising of Florida juices is unconstitutional because it forces growers to pay for speech against their will. 04.02.03

Court agrees company got raw deal on alligator-hide advertising
Federal judge sides with Pelts & Skins, rules that mandatory fees paid to Louisiana wildlife department constituted forced commercial speech. 05.14.03

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