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High court won't compel mushroom growers to fund generic ads

By The Associated Press

WASHINGTON — A mandatory advertising campaign for the mushroom industry violates the First Amendment guarantee of free speech, the Supreme Court ruled today.

The 6-to-3 ruling in U.S. v. United Foods 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 the 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 today's ruling leaves other industry ad campaigns such as the "Got Milk?" ads for dairy producers. Applying the reasoning in today's case, the constitutionality of individual ad campaigns would be judged by the degree of cohesion and regulation in each industry.

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 has 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 California fruit producers' case, Glickman v. Wileman Bros. & Elliott, Inc. In a 5-4 ruling, the court 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's decision.

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Beef Board can't force producers to fund generic ads
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Louisiana processor claims his product is superior, he shouldn’t have to pay for industry-wide marketing. 07.25.02

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

Court rulings put mandatory ad campaigns in jeopardy
Recent federal decisions striking down beef, mushroom promotions could signal legal trouble for other farmer-funded programs. 07.02.02

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