The exact impact of the 6-3 decision in a case involving the Mushroom Council is uncertain, said lawyers for commodity boards. That's because while the court rejected assessments made solely to be used for paid advertising, it found perfectly legal assessments to fund industry regulatory schemes that include advertising. The lawyers said that since many of the boards that advertise were created as part of industry regulatory programs, the eventual impact of the court's decision will be determined by future lawsuits and the U.S. Department of Agriculture's interpretation of the case.
U.S. Agriculture Secretary Ann M. Veneman issued a statement last week saying her department is reviewing the decision.
Laurence Tribe, a Harvard professor who successfully argued the case on behalf of Tennessee mushroom grower United Foods, said the decision "does not provide any bright line" for determining where a given program falls, but it makes government imposition of advertising more difficult.
Richard F. O'Brien, exec VP of the American Association of Advertising Agencies, said the court decision creates confusion. "I pity the advertising manager of a co-op," he said. "It's a bit like reading tea leaves. Literally how [a program is defined, tells] which is constitutional and which is unconstitutional."
United Foods argued in the case that it didn't benefit from the assessment placed on mushroom growers to support industry advertising, contending that requiring it to continue paying for the ads amounted to "compelled speech." The Mushroom Council spends about $1 million a year on advertising, with advertising handled by Lewis & Neale, New York.
The court majority agreed. "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," wrote Justice Anthony Kennedy, delivering the court majority's opinion. "The question is whether the government may underwrite and sponsor speech with a certain viewpoint using special subsidies exacted from a designated class of persons, some of whom object to the idea being advanced."
But the justices took pains to separate the mushroom growers' situation from that of fruit tree growers whose similar advertising assessment the court upheld four years ago. The difference, the court said, was that fruit tree growers were contributing to wider marketing programs of which advertising was just a part.
Writing in dissent, Justice Stephen Breyer questioned differences between the two cases, noting that much of what the tree grower boards do is advertise.
Wayne Watkinson, a Washington attorney who represents Dairy Management Inc., as well as the beef and soybean boards, said the line is confusing. "I can't make heads or tales out of differences between the two cases," he said. "There appears to be a spectrum between tree fruit which is heavily regulated and mushrooms and the question is [in which] your program fits." He added that because the milk programs and a number of other commodity programs are part of industry regulatory efforts that include price supports, their ad programs are unlikely to be overturned.
The case has broader implications as well. Lawyers said the decision could make it harder for the government to require tobacco, alcohol, drug and other marketers to include specific government messages, warnings or ratings in their ads. Justice Breyer, in his dissent argued that the mushroom program "does not compel speech itself, it compels the payment of money" and warned that the decision would set a bad precedent. "That precedent suggests, perhaps requires, striking down any similar program that, for example, would require tobacco companies to contribute to an industry fund for advertising the harms of smoking."
Steve Brody, a First Amendment attorney in New York, said the case could create more pressure to regulate product marketing, because the court said compelling companies to advertise specific messages they don't agree with without some other form of regulation is unconstitutional. However, he said the court's willingness to give commercial speech First Amendment protection buttresses arguments that attempts to restrict commercial speech should not be treated less seriously than attempts to curb political speech. "The government is going to have an increasing burden to justify restrictions on truthful, non-misleading advertising," he said.
Contributing: Abbey Klaassen