WASHINGTON (FNS) -- The U.S. Supreme Court has given generic advertising of commodities a thumbs up, ruling that government can force businesses to fund these programs.
In a 5 to 4 decision handed down June 25, the High Court reversed an appeals court ruling that, if upheld, would have made industry participation voluntary in dozens of generic promotion programs pushing dozens of commodities ranging from butter to beef.
The court took up the issue on the basis of whether mandating promotion payments violates First Amendment rights to freedom of speech. A group of California peach growers and shippers brought the case, arguing that it violates the Constitution to require companies to spend advertising dollars on generic promotion programs for which they find little benefit.
The Agriculture Department fought the case, Wileman vs. Glickman, maintaining that generic promotion programs fall within the government's regulatory authority and have nothing to do with free speech. Such programs have existed since 1937 when the Agricultural Marketing Agreement Act was passed to ensure orderly marketing conditions for commodities. The act allows Congress to authorize the USDA to establish so-called marketing orders for a given commodity. The orders not only cover generic advertising, but can also involve quality-control measures.
"Generic advertising is intended to stimulate consumer demand for an agricultural product in a regulated market," the court ruled, in a decision delivered by Justice John Paul Stevens, who was joined by Justices Sandra Day O'Connor, Anthony M. Kennedy, Ruth Bader Ginsburg and Stephen G. Breyer.
"The mere fact that one or more producers do not wish to foster generic advertising of their product is not sufficient reason for judges to override the judgment of the majority of market participants, bureaucrats and legislators that such programs are beneficial," Stevens said. "What we are reviewing is 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 dissenting, Chief Justice William H. Rehnquist and Justices David H. Souter, Antonin Scalia and Clarence Thomas questioned the majority's view that companies being forced to pay into a promotion fund somehow was exempt from the First Amendment.
"Forced payment for commercial speech should be subject to the same level of judicial scrutiny as any restriction on communications in that category," Souter wrote for the four. "The legitimacy of governmental regulation does not validate coerced subsidies for speech that the government cannot show to be reasonably necessary to implement the regulation."
Stevens argued that payments are not coerced. "The marketing orders impose no restraint on the freedom of any producer to communicate any message to any audience . . . they do not compel any person to engage in any actual or symbolic speech . . . they do not compel the producers to endorse or to finance any political or ideological views," he wrote.
"While the First Amendment unquestionably protects the individual producer's right to advertise its own brands, the statute is designed to further the economic interests of the producers as a group," Souter wrote. "The basic policy decision that underlies the entire statute rests on an assumption that in the volatile markets for agricultural commodities the public will be best served by compelling cooperation among producers in making economic decisions that would be made independently in a free market."
