BARTOW, Fla. A state tax on citrus that pays for generic advertising of Florida juices is unconstitutional because it forces growers to pay for speech against their will, a judge has ruled.
The decision issued March 31 by Circuit Court Judge Dennis Maloney in Bartow could jeopardize the main source of funding for the Florida Department of Citrus since the agency gets about two-thirds of its revenue from the tax.
The tax ranges from 16.5 to 25 cents per 90-pound box of citrus as it comes from the groves.
Officials with the Department of Citrus said yesterday that they planned to appeal.
"We are confident that we have a solid case and look forward to the appeal," said Walt Brewer, chairman of the Florida Citrus Commission, which overseas the Department of Citrus.
The challenge to the citrus tax was brought by six growers, including three of Florida's largest growers, who were seeking a $16 million refund for the taxes they have paid since September 1999.
Maloney must decide on a remedy before the case can be appealed. Among the remedies he must address is whether the growers should get refunds and whether the Department of Citrus must stop collecting the tax.
Attorneys from both sides planned to meet soon to discuss an agreement that would let the appeal move forward.
The decision represents a victory for Florida's largest growers and a defeat for the state's smaller growers, said James Griffiths, managing director of Citrus Growers Associates Inc. in Lakeland, which represents smaller growers.
The larger growers can afford to pay their own marketing efforts, while the smaller growers are more dependent on marketing done by the Department of Citrus.
"This is for the benefit of a few greedy (growers)," Griffiths said. "They're hurting the rest of the industry."
It wasn't clear how the decision would immediately affect the Department of Citrus, said Andy LaVigne, chief executive of Florida Citrus Mutual, the state's largest growers group with 11,000 members.
"That's the question: Does it get rid of the Department of Citrus?" LaVigne said.
The Department of Citrus said a draft of an independent study by a Texas A&M professor showed that demand for Florida citrus juices increased by more than half a gallon for every dollar spent on generic advertising.
In his decision, the judge said the tax violates the First Amendment by forcing growers to pay for speech against their will. The ruling affects only the taxes paid on oranges and grapefruits processed for juice, which accounts for about $36 million of this season's box-tax revenue.
In all, the box tax was estimated to raise about $43 million this citrus season, providing most of the Department of Citrus' $65.5 million budget. The agency spends about 80% of its budget on marketing programs.
The lawsuit was similar to one filed by five Florida citrus processors. In a partial decision in that lawsuit, Maloney struck down an "equalization tax" Florida placed on foreign juice imports to make Florida juice more price competitive. The judge rejected the processors' demand for a $10 million refund.
Kristin Gunter, an attorney for the citrus processors, praised the decision involving the citrus growers.
"Judge Maloney's decision is consistent with a growing body of law," Gunter said.