Delano Farms Co. v. Cal. Table Grape Commission
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Opinion
CANTIL-SAKAUYE, C.J.
*1209 Pursuant to the Ketchum Act ( Food & Agr. Code, § 65500 et seq. ; sometimes hereafter referred to as the Act), the *1210 activities of the California Table Grape Commission (sometimes hereafter referred to as the Commission) are funded by assessments on shipments of California table grapes. Plaintiffs and appellants are five growers and shippers of these grapes. They contend that the collection of assessments under the Act to subsidize promotional *48 speech on behalf of California table grapes as a generic category violates their right to free speech under article I, section 2, subdivision (a) of the state Constitution (sometimes hereafter article I, section 2 ). Specifically, plaintiffs believe that the table grapes they grow and ship are exceptional, and cast the assessment scheme as infirm insofar as it requires them to sponsor a viewpoint (promoting all California table grapes equally) with which they disagree.
The Commission responds that the Act's compelled-subsidy program does not violate article I, section 2 because the promotional messaging it underwrites represents government speech, as opposed to private speech. Both the Commission's position and that of plaintiffs recognize this court's prior determinations that a government program that compels market participants to subsidize generic promotional speech over their objections implicates article I, section 2 (
Gerawan Farming, Inc. v. Lyons
(2000)
We conclude that the Commission's advertisements and related messaging represent government speech, and hold that the
**702
Ketchum Act's compelled-subsidy scheme does not violate plaintiffs' rights under article I, section 2. The government speech doctrine recognizes that a properly functioning government must express potentially controversial viewpoints as a matter of course, and that payers of taxes and fees may be required to subsidize this speech, even when they disagree with it, without implicating their constitutional right to free speech. Yet, as the United States Supreme Court recently cautioned, although "the government-speech doctrine is important-indeed, essential-it is a doctrine that is susceptible to dangerous misuse." (
Matal v. Tam
(2017) 582 U.S. ----,
Here, the relevant circumstances establish sufficient government responsibility for and control over the messaging at issue for these communications to represent government speech that plaintiffs can be required to subsidize without implicating their rights under article I, section 2. Meanwhile, no triable issue of fact exists that the Ketchum Act violates plaintiffs' article I, section 2 rights under a different theory, such as one asserting that the statute's compelled-assessment scheme effectively prevents them from speaking. Accordingly, we hold that plaintiffs have advanced no viable claim under article I, section 2. Because the Court of Appeal rejected plaintiffs' challenge to the Ketchum Act on similar grounds, we affirm the judgment below.
*49 I. FACTUAL AND PROCEDURAL BACKGROUND
California leads the nation in the production of agricultural commodities, with its farms and ranches generating more than $47 billion in value in the 2015 crop year. (Cal. Dept. of Food and Agriculture, California Agricultural Statistics Review 2015-2016 (2017) pp. 1-2 (Agricultural Statistics Review).) Table grapes are among the agricultural products for which this state is well known. Table grapes are distinguished from other types of grapes, such as raisin grapes and wine grapes, in that they are generally eaten while fresh instead of being consumed only after being dried or turned into wine. (See Food & Agr. Code, § 65523.) 1 This opinion therefore sometimes refers to table grapes as "fresh grapes." The 2015 harvest of California table grapes had an estimated total value in excess of $1.7 billion. (Agricultural Statistics Review, at p. 12.) The parties have stipulated that as of 2012, there were approximately 475 growers of table grapes in California.
A. The Ketchum Act and Its Implementation
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CANTIL-SAKAUYE, C.J.
*1209 Pursuant to the Ketchum Act ( Food & Agr. Code, § 65500 et seq. ; sometimes hereafter referred to as the Act), the *1210 activities of the California Table Grape Commission (sometimes hereafter referred to as the Commission) are funded by assessments on shipments of California table grapes. Plaintiffs and appellants are five growers and shippers of these grapes. They contend that the collection of assessments under the Act to subsidize promotional *48 speech on behalf of California table grapes as a generic category violates their right to free speech under article I, section 2, subdivision (a) of the state Constitution (sometimes hereafter article I, section 2 ). Specifically, plaintiffs believe that the table grapes they grow and ship are exceptional, and cast the assessment scheme as infirm insofar as it requires them to sponsor a viewpoint (promoting all California table grapes equally) with which they disagree.
The Commission responds that the Act's compelled-subsidy program does not violate article I, section 2 because the promotional messaging it underwrites represents government speech, as opposed to private speech. Both the Commission's position and that of plaintiffs recognize this court's prior determinations that a government program that compels market participants to subsidize generic promotional speech over their objections implicates article I, section 2 (
Gerawan Farming, Inc. v. Lyons
(2000)
We conclude that the Commission's advertisements and related messaging represent government speech, and hold that the
**702
Ketchum Act's compelled-subsidy scheme does not violate plaintiffs' rights under article I, section 2. The government speech doctrine recognizes that a properly functioning government must express potentially controversial viewpoints as a matter of course, and that payers of taxes and fees may be required to subsidize this speech, even when they disagree with it, without implicating their constitutional right to free speech. Yet, as the United States Supreme Court recently cautioned, although "the government-speech doctrine is important-indeed, essential-it is a doctrine that is susceptible to dangerous misuse." (
Matal v. Tam
(2017) 582 U.S. ----,
Here, the relevant circumstances establish sufficient government responsibility for and control over the messaging at issue for these communications to represent government speech that plaintiffs can be required to subsidize without implicating their rights under article I, section 2. Meanwhile, no triable issue of fact exists that the Ketchum Act violates plaintiffs' article I, section 2 rights under a different theory, such as one asserting that the statute's compelled-assessment scheme effectively prevents them from speaking. Accordingly, we hold that plaintiffs have advanced no viable claim under article I, section 2. Because the Court of Appeal rejected plaintiffs' challenge to the Ketchum Act on similar grounds, we affirm the judgment below.
*49 I. FACTUAL AND PROCEDURAL BACKGROUND
California leads the nation in the production of agricultural commodities, with its farms and ranches generating more than $47 billion in value in the 2015 crop year. (Cal. Dept. of Food and Agriculture, California Agricultural Statistics Review 2015-2016 (2017) pp. 1-2 (Agricultural Statistics Review).) Table grapes are among the agricultural products for which this state is well known. Table grapes are distinguished from other types of grapes, such as raisin grapes and wine grapes, in that they are generally eaten while fresh instead of being consumed only after being dried or turned into wine. (See Food & Agr. Code, § 65523.) 1 This opinion therefore sometimes refers to table grapes as "fresh grapes." The 2015 harvest of California table grapes had an estimated total value in excess of $1.7 billion. (Agricultural Statistics Review, at p. 12.) The parties have stipulated that as of 2012, there were approximately 475 growers of table grapes in California.
A. The Ketchum Act and Its Implementation
The Ketchum Act responded to challenging market conditions encountered by the state's producers of fresh grapes in the 1960s. 2 As will be explained in *1212 more detail below, the Act created the California Table Grape Commission, a public corporation vested with the power and duty to engage in activities intended to increase consumer demand for California fresh grapes. These activities **703 are funded by assessments imposed upon shippers of these grapes, which are passed along to their producers.
1. Legislative Findings
The Ketchum Act begins with a series of findings by the Legislature. Several of these findings concern the importance assigned to the production and marketing of California fresh grapes, and the challenges faced by growers of these grapes. These findings include, "[g]rapes produced in California for fresh ... consumption comprise one of the major agricultural crops of California, and the production and marketing of such grapes affects the economy, welfare, standard of living and health of a large number of citizens residing in this state" ( § 65500, subd. (a) ); and "[i]ncreased plantings of vineyards and improved cultural practices for the production of California grapes for fresh ... consumption have increased and will continue to increase the production thereof and unless the fresh ... consumption of California grapes is increased by the expansion *50 of existing markets and the development of new markets, the interests of the fresh grape industry of California, and the public interest of the people of this state, will be adversely affected" ( id ., subd. (b) ). Furthermore, the Legislature found that "[t]he inability of individual producers to maintain or expand present markets or to develop new or larger markets for such grapes results in an unreasonable and unnecessary economic waste of the agricultural wealth of this state" ( id ., subd. (c) ); and "[s]uch conditions and the accompanying waste jeopardize the future continued production of adequate supplies of fresh grapes for human consumption for the people of this and other states, and prevent producers from obtaining a fair return for their labor, their farms and their production. As a consequence, the purchasing power of such producers has been in the past, and may continue to be in the future unless such conditions are remedied, low in relation to that of other people engaged in other gainful occupations within the state, and they are thereby prevented from maintaining a proper standard of living and from contributing their fair share to the support of the necessary governmental and education functions, thus tending to increase unfairly the tax burden of other citizens of the state" ( id ., subd. (d) ). *1213 Other findings relate the state's response to these challenging conditions, endorsing measures perceived as developing and expanding markets for California fresh grapes. These findings provide, "The[ ] [aforementioned] conditions vitally concern the health, peace, safety and general welfare of the people of this state. It is therefore necessary and expedient in the public interest to protect and enhance the reputation of California fresh grapes for human consumption in intrastate, interstate and foreign markets, and to otherwise act so to eliminate unreasonable and unnecessary economic waste of the agricultural wealth of this state" ( id ., subd. (e) ); "[t]he promotion of the sale of fresh grapes for human consumption by means of advertising, dissemination of information on the manner and means of production, and the care and effort required in the production of such grapes, the methods and care required in preparing and transporting such grapes to market, and the handling of the same in consuming markets, research respecting the health, food and dietetic value of California fresh grapes and the production, handling, transportation and marketing thereof, the dissemination of information respecting the results of such research, instruction of the wholesale and retail trade with respect to handling thereof, and the education and instruction of the general public with reference to the various varieties of California fresh grapes for human consumption, the time to use and consume each variety and the uses to which each variety should be put, the dietetic and health value thereof, all serve to increase the consumption thereof and to expand existing markets and create new markets for fresh grapes, and prevent agricultural waste, and [are] therefore in the interests of the welfare, public economy and health of the people of this state" ( § 65500, subd. (f) ); "[i]t is hereby declared to be the policy of this state to aid producers of California fresh grapes in preventing economic waste in the marketing of their commodity, to develop more efficient and equitable methods in such marketing, and to aid such producers in restoring **704 and maintaining their purchasing power at a more adequate, equitable and reasonable level" ( id ., subd. (g) ); and "[t]he production and marketing of grapes produced in California for fresh human consumption is declared to be affected with a public interest; the provisions of this chapter are enacted in the exercise *51 of the police power of this state for the purpose of protecting the health, peace, safety and general welfare of the people of this state" ( id ., subd. (h) ).
2. The California Table Grape Commission
The Act created the California Table Grape Commission to effectuate the policies set forth in the statute's findings. (§ 65550.) 3 The Commission is a *1214 public corporation. (§ 65551.) Its membership consists of three producers from each of the state's six operational fresh grape growing districts (§§ 65533, 65550, 65554), as well as one "public" member not engaged in the production, shipment, or processing of fresh grapes in this state (§ 65575.1). The Legislature has determined *52 that the commissioners drawn from the state's producers "are intended to represent and further the interest of a particular agricultural industry concerned, and that such representation and furtherance is intended to serve the public interest." (§ 65576.) The public member "shall represent the interests of the general public in all matters coming before the commission." (§ 65575.2.) *1215 After the Commission's inception and initial elections, producers have been selected **705 for service on the Commission through a two-part process. First, each year each district conducts an election in which the district's qualified grape producers cast votes. (§ 65556.) The Secretary of the Department of Food and Agriculture then tabulates these votes, identifies the two leading vote-getters, and appoints one of these two nominees as a member of the Commission. (§ 65563.) The public member of the commission, meanwhile, is selected by the Secretary from a list of three nominees proposed by the Commission. (§ 65575.1.) If the Secretary disapproves of all nominees for the public member position, "the [C]ommission shall continue to submit lists of nominees until the [Secretary] has made a selection." ( Ibid .) Each commissioner serves a three-year term. (§ 65555.)
3. The Commission's Powers and Duties
The Ketchum Act confers upon the Commission "powers and duties" (§ 65572) that include responsibility to "administer and enforce [the Act], and to do and perform all acts and exercise all powers incidental to or in connection with or deemed reasonably necessary, proper or advisable to effectuate the purposes of" the Act. (§ 65572, subd. (c).) The Commission may hire officers and other personnel to assist with these responsibilities. ( Id ., subd. (d).) 4 The Act specifically vests the Commission with the "power[ ] and dut[y] ... [¶] ... [¶] ... [t]o promote the sale of fresh grapes by advertising and other similar means for the purpose of maintaining and expanding present markets and creating new and larger intrastate, interstate, and foreign markets for fresh grapes; to educate and instruct the public with respect to fresh grapes; and the uses and time to use the several varieties, and the healthful properties and dietetic value of fresh grapes." (§ 65772, subd. (h).) In the Commission's discretion, it also may "educate and instruct the wholesale and retail trade with respect to proper methods of handling and selling fresh grapes; ... arrange for the performance of dealer service work providing display and other promotional materials; ... make market surveys and analyses; and ... present facts to and negotiate with state, federal and foreign agencies on matters which affect the marketing and distribution of fresh grapes; and ... undertake any other similar activities which the [C]ommission may determine appropriate for the maintenance and expansion of present markets and the creation of new and larger markets for fresh grapes." ( Id ., subd. (i).) The Commission also is authorized to "conduct, and contract with others to conduct, scientific research ... respecting the marketing and distribution of fresh grapes, the production, storage, refrigeration, inspection and transportation thereof, to develop and discover the dietetic value of fresh grapes and to develop and expand markets, and to *1216 improve cultural practices and product handling so that the *53 various varieties may be placed in the hands of the ultimate consumer in the best possible condition." ( Id ., subd. (k).) These and other provisions of the Act are to be "liberally construed." (§ 65674.)
To pay for the Commission's activities, the Act authorizes an assessment on shipments of fresh grapes. This assessment is set annually by the Commission, but by statute may not exceed .6522 cents per pound of shipped grapes. (§§ 65572, subd. ( l ), 65600.) These assessments are paid to the Commission by shippers, each of which is in turn authorized to collect the assessments from the responsible producers. (§§ 65604, 65605.) In the event of nonpayment of an assessment, or if the Commission believes a violation of the Act, or any rule or regulation promulgated under the Act, has occurred, it may bring an action in its name for collection, civil penalties, or injunctive relief. (§ 65650.) Violations of the Act, including a shipper's refusal to supply the Commission with certain information regarding its supplier or suppliers of grapes, are punishable as misdemeanors. (§ 65653.) The Act provides that "[t]he State of California shall not be liable for the acts of the [C]ommission or its contracts." (§ 65571.)
The Commission assumed its responsibilities under the Ketchum Act only after a referendum among producers. (§ 65573.) The Commission's operations may be suspended through a similar process. If 11 members of the Commission make a finding that the Act "has not tended to effectuate its declared **706 purposes," or 20 percent of producers file a petition with the Secretary requesting suspension of the Commission's activities, the Secretary shall cause a producer referendum to be conducted. (§ 65660.) If a sufficient number of producers participate in this referendum and vote for suspension, "the [Secretary] shall declare the operation of the provisions of [the Act] and of the [C]ommission suspended, effective upon expiration of the marketing season then current." (§ 65661.) Furthermore, the Act provides for a referendum among producers every five years to determine whether the Commission's operations will continue. (§ 65675.) To date, all of these referenda have led to the continuation of the Commission and its operations.
4. The Commission's Activities Under the Act
The Commission divides its activities into five general categories-research, trade management, issues management, advertising, and education and outreach. 5 Since the Commission's inception, its programmatic efforts *1217 have included facilitating the opening of new international markets for California table grapes, funding and implementing research efforts to produce new varieties of table grapes and develop improved pest-control practices, promoting the use of table grapes among food service providers and in home cooking, collaborating with retailers to enhance the presentation and sale of fresh grapes to consumers, and developing generic advertising that promotes the consumption of California fresh grapes.
The Commission's advertising appears in print media and on radio, television, and the Internet. This advertising does not specify or endorse any one type of California fresh grape or any single producer of these grapes. Instead, it promotes California fresh grapes in general as being flavorful, *54 convenient, and healthful. The Commission's advertising has not promoted any products other than California fresh grapes. Past themes of Commission advertising have borne the taglines, "Good things come in bunches," "Share some California grapes," "Life is complicated. Grapes are simple," and "California grapes. The Natural Snack." These advertisements bear no express attribution to the State of California. Their recurring elements vary across media. Print advertisements include the Commission's website address and its logo, which reads "Grapes from California."
5. Oversight of the Commission
By all accounts, neither the Secretary nor her employees have directly participated in the development or approval of the Commission's advertising, or other promotional speech by the Commission. The Department of Food and Agriculture's "Policies for Marketing Programs" manual, the pertinent provisions of which are not captured in any promulgated regulation, states that the "CDFA reserves the right to exercise exceptional review of advertising and promotion messages wherever it deems such review is warranted," which "may include intervention in message development prior to placement of messages in a commercial medium or venue." This manual also relates the Department's expectation that advertising and promotional messages be "[t]ruthful," "[i]n good taste," "[n]ot disparaging," and "[c]onsistent with statute."
The Ketchum Act incorporates a mechanism to challenge Commission actions, providing that "[a]ny person aggrieved by any action of the [C]ommission" may appeal that action to the Secretary. (§ 65650.5.) 6 The Secretary "shall review the record of the proceedings before the [C]ommission." ( Ibid .) Upon such review, the Secretary shall dismiss the appeal if she *1218 finds that the Commission's action "was not an abuse of discretion or illegal," but may reverse the Commission's action if it was "not substantially sustained by the record, was an abuse of discretion, or **707 illegal." ( Ibid .) Any decision by the Secretary dismissing an appeal or reversing an action of the Commission is subject to judicial review upon petition of the Commission "or any party aggrieved by the decision." ( Ibid .) This appeal mechanism has been invoked in the past, leading to the Secretary's reversal of a Commission action, albeit not in the context of advertising or other promotional speech.
As another form of oversight, the Act provides that the Commission must "keep accurate books, records and accounts of all of its dealings," which "shall be open to inspection and audit by the Department of Finance ... or other state officer charged with the audit of operation of departments of the State of California." (§ 65572, subd. (f).)
B. Proceedings Below
In 1999, plaintiffs Delano Farms Company (Delano Farms) and Gerawan Farming, Inc., filed separate but substantively similar complaints in Sacramento Superior Court, in which they alleged (among other claims) that the Ketchum Act's compelled-subsidy program violates their right to free speech under article I, section 2. 7 Plaintiffs Four Star Fruit, Inc., Bidart Bros., and Blanc Vineyards, LLC (Blanc *55 Vineyards) have since joined the litigation, raising similar claims.
All plaintiffs assert that the Ketchum Act is unconstitutional insofar as it requires them to subsidize promotional speech that advances a viewpoint with which they disagree. Delano Farms and Blanc Vineyards, for example, each allege that "[t]he Commission's advertisements, promotions, and other expressive activities are largely designed to promote table grapes as though they were a generic commodity with generic quality," whereas these plaintiffs "promote and market their own brands and labels of table grapes to distinguish to [their] buyers [their] product[s], grade, quality and [their] service from that of [their] competitors in order to secure a higher price and repeat business." The other plaintiffs make analogous allegations. Plaintiffs also claim that a conflict exists between the Commission's messaging regarding fresh grapes and the message that plaintiffs support. Delano Farms and Blanc Vineyards assert that "[t]he generic advertising and promotion activities engaged in by the Commission [are] not at all helpful to [p]laintiffs and [are] indeed harmful to [p]laintiffs' message which is to buy [p]laintiffs' table grapes because they are better, a better consumer value, and that [p]laintiffs *1219 provide better service." All plaintiffs seek declaratory and injunctive relief, as well as a refund of the assessments they have paid.
After the expiration of lengthy stays pending the resolution of related litigation, 8 the Commission moved for summary judgment in 2012. In doing so, the Commission argued that the advertisements and other communications subsidized through the Ketchum Act represent government speech that plaintiffs could be required to subsidize without violating their right to free speech under article I, section 2. The Commission advanced two rationales for treating its messaging as government speech. First, it cast itself as a government agency capable of generating government speech on its own. Second, the Commission asserted that even if it was not itself a government speaker, its communications qualified as government speech because they are effectively controlled by the government. As an alternative ground for summary judgment, the Commission argued that if its advertising and other speech did not represent government speech, the Act's compelled assessment program nevertheless survived intermediate scrutiny.
The superior court granted the Commission's motion for summary judgment, reasoning that the Commission represents a **708 government agency for purposes of the government speech doctrine. Providing an additional basis for its holding, the court determined that the Act's compelled-subsidy program directly advances a substantial government interest and is not more extensive than necessary to serve that interest, and therefore withstands intermediate scrutiny.
When plaintiffs appealed, the Court of Appeal affirmed. The Court of Appeal determined, first, that article I, section 2 does not demand a more constrained construction of the government speech doctrine than the one adopted by the United States Supreme Court in
*56
Johanns v. Livestock Marketing Assn.
(2005)
We granted review.
*1220 II. DISCUSSION
This is not the first time this court has considered the relationship between article I, section 2 and the compelled subsidy of speech. Through our previous encounters with this subject, we have concluded that a standard of intermediate scrutiny applies under article I, section 2 when the government compels the subsidization of
private
speech. (
Gerawan II
,
supra
, 33 Cal.4th at p. 6,
This case presents that issue, requiring us to decide whether speech developed and promulgated under the auspices of the Ketchum Act represents government speech. According to plaintiffs, the Commission-being overwhelmingly populated by market participants, each of whom is appointed by the Secretary from a pair of nominees proposed by growers themselves-is essentially a private entity incapable of generating government speech on its own. Plaintiffs also assert that the Ketchum Act does not otherwise ensure sufficient governmental accountability to the public regarding the messaging it contemplates for these communications to qualify as government speech. Here, plaintiffs emphasize the absence of active engagement by the CDFA in the review and approval of the Commission's promotional speech, and the fact that the Commission's advertisements are not explicitly attributed to the state. For its part, the Commission maintains that it is a state agency capable of generating government speech, even without oversight by the CDFA or other government actors. Furthermore, the Commission adds, the extent of governmental control over the messaging promulgated under the Ketchum Act also leads to a finding that these communications represent government speech.
In evaluating these positions, we begin with an overview of two principles this case calls upon us to mediate: the free speech guarantee enshrined in article I, section 2, and the government speech doctrine. We then review a series of decisions in which this and other courts have evaluated assertions that compelled-subsidy programs do not implicate constitutional free speech protections because they subsidize only government speech. Applying principles gleaned from the relevant precedent to the communications authorized by the Ketchum Act, we conclude that the promotional messaging under the Act constitutes government speech.
*1221 A. Article I, Section 2
Article I, section 2 of the California Constitution contains our state's counterpart to the free speech provision found in the First Amendment to the United States Constitution. Article I, section 2, subdivision (a) declares, "Every person may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of **709 this right. A law may *57 not restrain or abridge liberty of speech or press." 9
This court has held that the free speech guarantee within article I, section 2" 'is "at least as broad" as [citation] and in some ways is broader than [citation] the comparable provision of the federal Constitution's First Amendment.' [Citation.] Unlike the First Amendment, California's free speech clause 'specifies a "right" to freedom of speech explicitly and not merely by implication,' 'runs against ... private parties as well as governmental actors' and expressly 'embrace[s] all subjects.' [Citation.] However, '[m]erely because our provision is worded more expansively and has been interpreted as more protective than the First Amendment ... does not mean that it is broader than the First Amendment in all its applications.' [Citation.]" (
Beeman v. Anthem Prescription Management, LLC
(2013)
B. Government Speech
Although individuals have a right to speak freely, they do not have the right not to fund government speech. To recognize such a right would make effective governance impossible.
*1222 "Participation by the government in the system of freedom of expression is an essential feature of any democratic society. It enables the government to inform, explain, and persuade-measures especially crucial in a society that attempts to govern itself with a minimum use of force. Government participation also greatly enriches the system; it provides the facts, ideas, and expertise not available from other sources. In short, government expression is a necessary and healthy part of the system." (Emerson, The System of Freedom of Expression (1970) p. 698.) And when it speaks, the government inevitably will express viewpoints that some members of the body politic not only disagree with, but indeed find highly objectionable. This purposive messaging represents an integral and, on the whole, beneficial part of the government's basic functioning.
These principles undergird the government speech doctrine, whereby state action that generates or constitutes government speech, rather than private speech, is regarded as outside the purview of the First Amendment to the United States Constitution.
10
(See, e.g.,
*58
Pleasant Grove City v. Summum
(2009)
C. Case Law Involving Free Speech Challenges to Compelled Subsidy Programs and the Government Speech Doctrine
The right to free speech and the government speech doctrine have intersected in prior cases in which the plaintiffs have alleged that state action has unconstitutionally compelled them to subsidize viewpoints with which they disagree. In some of these matters, the defendants have responded that the plaintiffs are paying only for government speech, rather than private speech, making the challenged action lawful. The discussion below reviews how these arguments have been presented and addressed in prior decisions by this court, as well as other courts.
1. Keller
The United States Supreme Court's first extended discussion of the relationship between
*59
compelled subsidies and government speech occurred in
Keller v. State Bar of California
(1990)
The Supreme Court applied a similar analysis in
**711
Keller
,
supra
,
In proceedings below, this court had rejected the bulk of the plaintiffs' free speech claim, invalidating the fee only insofar as it subsidized electioneering by the State Bar outside of its statutory authority. (
Keller v. State Bar
(1989)
The United States Supreme Court reversed, concluding that the State Bar should not be considered a government actor in this context. The unanimous decision in
Keller
,
supra
,
Significantly, the Supreme Court in
Keller
,
supra
,
Keller
,
supra
,
2. Glickman
The present litigation forms part of a continuum of cases that have built upon *61 the holdings in Abood and Keller . The plaintiffs in these lawsuits have *1226 challenged compelled-subsidy programs within the agricultural sector as violating their right to free speech by forcing them to pay for generic advertising to which they object.
Initially, the government speech doctrine did not play a large role in this body of litigation, which proceeded on the assumption that these programs funded private, not government speech. The government speech doctrine was not invoked at all in
Glickman v. Wileman Brothers & Elliott, Inc.
(1997)
3. Gerawan I
The government speech doctrine was invoked, but only belatedly, in
Gerawan I
,
supra
,
Gerawan I
,
supra
,
At oral argument in
Gerawan I
,
supra
,
4. United Foods
The government speech doctrine also was raised too late to factor into the analysis in
United States v. United Foods, Inc.
(2001)
In finding that the imposition of these assessments violated the plaintiffs' First Amendment rights, the court in
United Foods
,
supra
,
In unsuccessfully defending the assessment program in
United Foods
,
supra
,
5. Gerawan II
The brief discussion of government speech in
United Foods
,
supra
,
Among the issues that
Gerawan I
,
supra
,
6. Johanns
Shortly after our decision in
Gerawan II
,
supra
,
Johanns
,
supra
,
The plaintiffs in
Johanns
,
supra
,
*66
*1232
Johanns
,
supra
,
In upholding the federal beef promotion program,
Johanns
,
supra
,
Johanns
,
supra
,
Since
Johanns
was decided, its analysis has been applied in several cases to rebuff
*68
free speech challenges to compelled-subsidy programs. (E.g.,
Paramount Land Co. LP v. California Pistachio Com'n
(9th Cir. 2007)
a. Delano Farms Co.
In parallel federal litigation over the very assessments that are at issue here, the United States Court of Appeals for the Ninth Circuit determined that the Commission's promotional messaging represented government speech and that the Ketchum Act's compelled-subsidy program therefore did not violate the First and Fourteenth Amendments. (
Delano Farms Co. v. California Table Grape Com'n
,
supra
, 586 F.3d at pp. 1228-1230.) The Court of Appeals' analysis first applied the framework set forth in
Lebron v. National Railroad Passenger Corporation
(1995)
*1235
The Ninth Circuit in
Delano Farms Co. v. California Table Grape Com'n
,
supra
,
In
Gallo Cattle Co. v. Kawamura
(2008)
*1236 D. Synthesis
The foregoing authorities establish certain basic principles relevant to the analysis here.
First, the case law reflects an evolving understanding of how the government speech doctrine relates to a compelled-subsidy claim. Notwithstanding some skeptical language in
Gerawan I
,
supra
, 24 Cal.4th at page 503, footnote 8,
Second, we have looked toward federal precedent interpreting the First Amendment for guidance regarding the government speech doctrine's bearing on a compelled-subsidy claim brought under article I, section 2. (
Gerawan II
,
supra
, 33 Cal.4th at pp. 27-28,
Third, when addressing a challenge to a compelled-subsidy program, if such issues are appropriately raised and developed by the plaintiff the court's analysis also must consider whether the state's actions impact free speech
*1237
rights in a manner distinct from the bare fact of the subsidy requirement itself. In
Johanns
,
supra
,
E. Application to the Ketchum Act
Application of these principles to the Ketchum Act leads to the conclusion that promotional messaging under the statute is subject to sufficient governmental direction and control to qualify as government speech. The Legislature has developed, and endorsed the dissemination of, the central message promulgated by the Commission. This message communicates a specific view (promotion) regarding a single commodity (California fresh grapes). The articulation and broadcasting of this message has been entrusted in the first instance to market participants, but only acting through an entity, the Commission, *71 that is subject to meaningful oversight by the public and other government actors. This oversight includes mechanisms that serve to ensure that the Commission's messaging remains within the parameters set by statute. These circumstances establish that the communications involved here represent government speech for purposes of article I, section 2.
Recognition of the promotional messaging produced under the Ketchum Act as government speech follows, first, from the Act's findings and charge to the Commission. As observed ante , in enacting this statute the Legislature found that "[i]t is ... necessary and expedient in the public interest to protect and enhance the reputation of California fresh grapes for human consumption in intrastate, interstate and foreign markets" ( § 65500, subd. (e) ), and "[t]he promotion of the sale of fresh grapes for human consumption by means of advertising ... is ... in the interests of the welfare, public economy and health of the people of this state" ( id ., subd. (f) ). The Act thus expressly endorses the promulgation of advertising and similar speech that promotes *1238 California fresh grapes as a general category. Consistent with these findings, the Act gives the Commission, upon becoming operational, the power and the duty "[t]o promote the sale of fresh grapes by advertising and other similar means for the purpose of maintaining and expanding present markets and creating new and larger **721 intrastate, interstate, and foreign markets for fresh grapes; to educate and instruct the public with respect to fresh grapes; and the uses and time to use the several varieties, and the healthful properties and dietetic value of fresh grapes." (§ 65572, subd. (h).) These provisions leave no doubt that the state, through the Ketchum Act, has prescribed in advance the basic message to be promulgated-the promotion of California table grapes-and selected the Commission as a messenger. 21
Moreover, in creating the Commission as a public corporation, the Legislature further aligned the state with the message to be articulated. Public corporations "are organized for the purpose of carrying out the purposes of the [L]egislature in its desire to provide for the general welfare of the state, and in the accomplishment of which legislative convenience or constitutional requirements have made them essential." (
In re Madera Irrigation District
(1891)
Of course, public corporations are not invariably regarded as units of the government for purposes of the government speech doctrine. The high court's analysis and decision in
Keller
,
supra
,
Furthermore, the Commission operates subject to several statutes generally applicable to state agencies (see Gov. Code, § 11000, subd. (a) ) that permit ongoing review of its operations and help ensure accountability for its actions. These laws include the Public Records Act ( Gov. Code, § 6250 et seq. ; see id ., § 6252, subd. (f)(1) ), 22 the Bagley-Keene Open Meeting Act ( Gov. Code, § 11120 et seq. ; see id ., § 11121, subd. (a) ), and the Political Reform Act ( Gov. Code, § 81000 et seq. ; see id ., § 82049). The Ketchum Act also demands that the Commission "keep accurate **722 books, records and accounts of all of its dealings, which ... shall be open to inspection and audit by the Department of Finance ... or other state officer." ( Food & Agr. Code, § 65572, subd. (f).) These obligations all facilitate ongoing oversight of the Commission's activities, guarding against any deviation from statutory directives.
The Ketchum Act also incorporates an avenue for the Secretary to correct specific departures from the statutory message. Through the Act's appeal mechanism, the Secretary may reverse an action by the Commission if it is the subject of an appeal and she finds that it was "not substantially sustained by the record, was an abuse of discretion, or illegal." (§ 65650.5.) Were the Commission to endorse a message not authorized under the statute, or regarded as an abuse of discretion, an aggrieved party could challenge this action through an appeal. Although this case does not require us to identify the precise parameters of the Secretary's authority to reverse Commission actions, it stands to reason that speech that patently would not promote the sale of California table grapes could become the subject of a viable challenge. And regardless of whether such an appeal leads to reversal, the Secretary could be held politically accountable for the outcome. Although this review mechanism is somewhat different from the oversight responsibilities borne by the CDFA
*73 with other compelled-subsidy programs (see footnote 3, ante ), it *1240 nonetheless provides a meaningful avenue for ensuring that the Commission's messaging remains within the parameters crafted by the Legislature.
Other provisions within the Ketchum Act also underscore the state's responsibility for and control over messaging promulgated under the statute. Among them, the Act gives the Secretary of the Department of Food and Agriculture the duty to appoint commissioners from the set of nominees for each position on the Commission. (§§ 65555, 65563, 65575.1.) Having this power, the Secretary is in a weakened position to disclaim responsibility for promotional messaging that an appointee later may approve. Furthermore, as the officer who appoints the commissioners, the Secretary also has the power to remove them from office. (See
People ex rel. Atty. Gen. v. Hill
(1857)
In sum, the Commission was created by statute and given a specific mission to, among other things, promote in a generic fashion a particular agricultural product. In order for the promotional material of a body like the Commission to be considered government speech under an " 'effectively controlled' " theory (
Johanns
,
supra
, 544 U.S. at p. 560,
Plaintiffs identify perceived deficiencies in the statutory scheme and its implementation that, in their view, prevent us from characterizing the subsidized communications as government speech. First, plaintiffs read the discussion of government speech in
Gerawan II
,
supra
, 33 Cal.4th at pages 27-28,
Plaintiffs' position rests on a misreading of
Gerawan II
. That decision described conditions that might provide an adequate basis for concluding that advertising produced under a CMA marketing order constituted government speech. (
Gerawan II
,
supra
, 33 Cal.4th at pp. 27-28,
*1242
Plaintiffs advance a similarly flawed interpretation of
Johanns
,
supra
,
Plaintiffs also ask this court to read into article I, section 2 a requirement that, to qualify as government speech, subsidized communications must on their face be specifically and explicitly attributed to the government. Plaintiffs claim that such disclosures, as urged by Justice Souter in his dissent in
Johanns
,
supra
,
In short, the generation of speech under the Ketchum Act is attended by sufficient indicia of government responsibility and control for these communications to properly be regarded as government speech.
*1243 F. Consequences of Classification as Government Speech
Having determined that promotional messaging under the Ketchum Act represents government speech, it remains to consider the consequences of this designation.
The court in
Johanns
,
supra
,
We conclude that a similar result holds under article I, section 2. By itself, a state directive to pay taxes or fees to fund only government speech does not implicate, let alone infringe upon, protected free speech rights. As the court in
Johanns
,
supra
,
Of course, a determination that state action generates only government speech does not, by itself, necessarily address all of its possible constitutional implications. If the Ketchum Act's compelled-subsidy provisions did more than merely direct plaintiffs to fund government speech, additional
*76
analysis might be required under article I, section 2. (Accord,
Johanns
,
supra
, 544 U.S. at p. 564, fn. 7,
For example, although at oral argument counsel for plaintiffs asserted that the Commission's promotional speech effectively prevents his clients from communicating their preferred message, the record below does not reveal a triable issue of fact on this point. (See
Gallo Cattle
,
supra
, 159 Cal.App.4th at p. 967,
Plaintiffs' contentions, as developed in the record, thus sound solely in a fundamental objection to subsidizing speech with which they disagree. This being the case, the determination ante that the Ketchum Act generates only government speech disposes of plaintiffs' claims under article I, section 2. 24
III. DISPOSITION
We affirm the judgment of the Court of Appeal.
WE CONCUR:
CHIN, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
RAMIREZ, J. *
AARON, J. **
Presiding Justice of the Court of Appeal, Fourth Appellate District, Division Two, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Associate Justice of the Court of Appeal, Fourth Appellate District, Division One, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
All subsequent statutory references are to the Food and Agricultural Code unless otherwise noted.
The Ketchum Act, enacted in 1967, revived the Commission, which was first established pursuant to a statute enacted in 1961. (Stats. 1961, ch. 1391, § 1, p. 3167, repealed by Stats. 1967, ch. 15, § 1, p. 44.) Like the Ketchum Act, the 1961 statute responded to difficult market conditions by creating a California Table Grape Commission and vesting this agency with authority to promote fresh grapes through advertisements and other promotional efforts, to be paid by assessments imposed on market participants. (See former Agr. Code, §§ 5500, 5572, 5600.) The state's fresh grape producers failed to timely ratify this law through the statute's referendum procedure, however, which led to the suspension and winding down of the Commission's operations. (Foytik, Agricultural Marketing Orders: Characteristics and Use in California, 1933-1962 (1962) p. 66.) The provisions of the 1961 law diverged from the Ketchum Act's terms in certain respects. Among these differences, the 1961 law provided that "no action of the [C]ommission, or any member thereof ... shall be valid unless first approved by the director" (now Secretary) of what was then the Department of Agriculture, now the Department of Food and Agriculture. (Former Agr. Code, § 5572.) No comparable provision appears in the Ketchum Act.
State law recognizes multiple frameworks for collective marketing within the agriculture sector. The two most commonly utilized are marketing orders-the subject of our decisions in
Gerawan I
,
supra
,
Under state law, marketing orders are issued pursuant to the California Marketing Act of 1937. (§ 58601 et seq.; sometimes hereafter referred to as the CMA.) This statute authorizes the Secretary of the Department of Food and Agriculture (sometimes hereafter referred to as the Secretary; the Department of Food and Agriculture is sometimes referred to as the CDFA) to issue marketing orders pertaining to specific agricultural commodities. (§ 58741.) These orders may provide for production limits (§ 58883), grading standards (§ 58888), research studies (§ 58892), and advertising and sales promotion (§ 58889), among other subjects. In general, any provision within a marketing order concerning advertising and sales promotion "shall be directed toward increasing the sale of the commodity without reference to any private brand or trade name that is used by any handler with respect to the commodity regulated by the marketing order." ( Id ., subd. (b).) As with the scheme prescribed by the Ketchum Act, funding for activities under a marketing order comes from assessments on producers or handlers of the commodity subject to the order. (§ 58921.)
The governance of a marketing order is somewhat different from that associated with actions undertaken by a commission. Each marketing order must provide for the establishment of an advisory board to assist the Secretary in the administration of the order. (§ 58841.) Members of an advisory board are appointed by, and serve at the pleasure of the Secretary. ( Ibid .) Except for a member who may be appointed to represent "the department or the public generally" (§ 58843), members of an advisory board must be involved in the production or handling of the subject commodity (§ 58842). An advisory board's duties are "administrative only." (§ 58846.) Among its responsibilities, an advisory board may, "[s]ubject to the approval of the [Secretary], administer the marketing order," and "[r]ecommend to the [Secretary] administrative rules and regulations which relate to the marketing order." ( Id ., subds. (a), (b).)
Commissions were developed as an alternative to marketing orders. In addition to the California Table Grape Commission, other commissions that have been authorized by statute include the California Iceberg Lettuce Commission (§ 66501 et seq.); the California Rice Commission (§ 71000 et seq.); the California Wine Commission (§ 74501 et seq.); the California Egg Commission (§ 75001 et seq.); the California Sheep Commission (§ 76201 et seq.); the California Forest Products Commission (§ 77501 et seq.); the California Sea Urchin Commission (§ 79000 et seq.); the California Nursery Producers Commission (§ 79401 et seq.); the California Apiary Research Commission (§ 79601 et seq.); and the Olive Oil Commission of California (§ 79800 et seq.), among many others.
The terms of the statutes that have created these and other commissions and vested them with authority vary in some respects from the provisions of the Ketchum Act. One difference is that other statutes commonly provide for a different form of engagement by the CDFA with the relevant commission's activities, from that contemplated under the Ketchum Act. (E.g., § 66561.3 [authorizing the Secretary to require the California Iceberg Lettuce Commission "to correct or cease any activity or function which is determined by the [Secretary] not to be in the public interest or is in violation of" that commission's authorizing statute].)
As of July 2012, when the Commission moved for summary judgment, it had 22 employees.
Per the record developed below, in 2010-2011, the last fiscal year for which data appear in the record, the Commission spent $1,902,770 in assessment funds on research activities, $1,352,222 on trade management, $1,375,654 on issue management, $2,103,311 on paid advertising, and $1,949,374 on education and outreach.
The Act refers to the Secretary of the CDFA as the "Director," the Secretary's former title. (See § 50.)
Plaintiffs' operative complaints also allege other violations of their constitutional rights. These allegations are not at issue at this stage of the litigation.
Those cases included federal proceedings initiated by three California table grape growers-one of which, Delano Farms, is among the plaintiffs here-that attacked the Ketchum Act's compelled-assessment program as violating their rights under the First and Fourteenth Amendments to the United States Constitution. (See
Delano Farms Co. v. California Table Grape Com'n
(9th Cir. 2009)
A substantively identical provision formerly appeared at article I, section 9 of the state Constitution. (See
DeGrassi v. Cook
(2002)
Some of the intuitions behind the government speech doctrine have informed free speech jurisprudence under the First Amendment for decades. In
Board of Education v. Barnette
(1943)
Although our decision in
Keller v. State Bar
,
supra
,
The Mushroom Act was designed to effectuate Congress' policy "to authorize the establishment ... of an orderly procedure for developing, financing through adequate assessments on mushrooms produced domestically or imported into the United States, and carrying out, an effective, continuous, and coordinated program of promotion, research, and consumer and industry information designed to-[¶] (1) strengthen the mushroom industry's position in the marketplace; [¶] (2) maintain and expand existing markets and uses for mushrooms; and [¶] (3) develop new markets and uses for mushrooms." (
The statute authorized the Secretary of Agriculture to "propose the issuance of an order," or "an association of mushroom producers or any other person that will be affected by this chapter" to "request the issuance of" an order (
The intermediate scrutiny test "asks (1) 'whether the expression is protected by the First Amendment,' which means that the expression 'at least must concern lawful activity and not be misleading'; (2) 'whether the asserted governmental interest is substantial'; if yes to both, then (3) 'whether the regulation directly advances the governmental interest asserted'; and (4) 'whether it is not more extensive than is necessary to serve that interest.' " (
Gerawan II
,
supra
, 33 Cal.4th at p. 22,
In describing this promotional speech, the Beef Act provides that "[t]he [Operating] Committee shall develop plans or projects of promotion and advertising, research, consumer information, and industry information, which shall be paid for with assessments collected by the Board. In developing plans or projects, the Committee shall-[¶] (i) to the extent practicable, take into account similarities and differences between certain beef, beef products, and veal; and [¶] (ii) ensure that segments of the beef industry that enjoy a unique consumer identity receive equitable and fair treatment under this chapter." (
Johanns
,
supra
,
To the court in
Johanns
,
supra
,
In dissent, Justice Souter argued that the targeted nature of the assessments on beef and beef products-with funding coming only from producers, and not from the general public fisc-dictated a more constrained construction of the government speech doctrine. (
Johanns
,
supra
, 544 U.S. at pp. 575-576,
These circumstances, Justice Souter believed, meant that for the Beef Act's promotional messaging to qualify as government speech, the challenged advertisements had to disclose that the government was the speaker. Such a requirement was needed, he wrote, "to ensure that the political process can practically respond to limit the compulsion" associated with the funding scheme. (
Johanns
,
supra
, 544 U.S. at p. 576,
The plaintiff in
Lebron
,
supra
,
Although some advertisements produced under the marketing order involved in
Gallo Cattle
,
supra
,
The government speech doctrine can provide a framework for analyzing a broad variety of First Amendment claims. Among them, it is sometimes perceived as an alternative to conventional forum analysis. (See, e.g.,
Walker
,
supra
, 576 U.S. at p. ----, 135 S.Ct. at pp. 2251-2252 ;
Summum
,
supra
, 555 U.S. at pp. 469-470,
It is true that the Commission only initiated operations upon an affirmative vote among growers. (§ 65573.) But the fact that the Legislature has, through this mechanism, given market participants a say in determining how the message prescribed by the Act will be promulgated is not fatal to the characterization of the Commission's communications as government speech. (See
Gerawan II
,
supra
, 33 Cal.4th at p. 26,
Section 65603 exempts from the Public Records Act information obtained by the Commission from shippers. (See also Gov. Code, § 6276.08.)
Furthermore, an advisory board constituted under the CMA, the subject of our decision in
Gerawan II
,
supra
,
Our resolution of the government speech issue makes it unnecessary to address the Commission's alternative argument that the Ketchum Act's speech-generating provisions satisfy intermediate scrutiny under article I, section 2.
Related
Cite This Page — Counsel Stack
417 P.3d 699, 233 Cal. Rptr. 3d 45, 4 Cal. 5th 1204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delano-farms-co-v-cal-table-grape-commission-cal-2018.