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Idustry Assessments for Advertising Found Unconstitutional

By Published on .

WASHINGTON (AdAge.com) -- An appellate court today upheld a lower court decision that ruled collecting fees from hog farmers to support advertising campaigns is unconstitutional.

The three-judge panel of the U.S. Court of

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Appeals for the 6th Circuit in Cincinnati cited First Amendment issues and an earlier Supreme Court case involving mushrooms farmers. In that earlier case, the Supreme Court drew a distinction between industry fees that are mainly for advertising, which the court ruled was unconstitutional, and those for various industry quality programs that included some advertising, which it said were legal.

Paying for speech
The case stems from a lawsuit filed by the Campaign for Family Farms, a group representing small hog-farmers, against the U.S. Department of Agriculture. The group argued that the government-mandated fees benefited larger corporate-backed hogging operations. The group claimed the ad campaign for the National Pork Board promoted processed meat, not the hogs that the family farmers it represented sold. The group also said the ad program represented an unconstitutional attempt to force pork producers to pay for speech they didn't agree with.

The appellate court agreed, saying there was little evidence the U.S. Department of Agriculture did much to review the program.

"The majority of the Pork Act's funds support advertising and promotions," the court said. "Thus, the use of assessments to fund advertising is prohibited by the First Amendment."

$48 million raised
The National Pork Producers Council, a trade group representing larger pork-producing operations, raises $46 million to $48 million for various promotional activities, of which about $5 million to $10 million goes to actual advertising. Producers pay 45 cents for every $100 they make from selling hogs. The campaign, which carries the tagline "The Other White Meat," was created by Interpublic Group of Cos.' Campbell-Mithune, Chicago.

The Department of Agriculture is expected to appeal the case to the Supreme Court, and Mike Wegner, vice president of communications for the pork producers council, said the group was hopeful a stay would be issued pending any Supreme Court ruling.

"We are disappointed, but this is another step in a long legal process," he said.

Second ruling this year
The decision is the second this year since the Supreme Court ruled in the mushroom case, issuing a blow to major agricultural industry ad programs.

On July 9, a federal appeals court in Minneapolis ruled against the beef industry's assessment that supports the "Beef: It's what's for dinner" campaign, from Publicis Groupe's Leo Burnett USA.

That court is expected to rule within days whether collections will cease.

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