California Kiwifruit Commission v. Moss

CALIFORNIA KIWIFRUIT COMMISSION, Respondent v. DAVE MOSS et al., Appellants C.A. 3rd, No. C018368 S054594 California Supreme Court Filed July 16, 1997
        The above-entitled cause is hereby transferred to the Court of Appeal, Third Appellate District, with directions to vacate its decision and to reconsider the cause in light of the opinion of the United States Supreme Court in Glickman v. Wileman Brothers & Elliot Inc. (June 2, 1997) 97 Daily Journal D.A.R. 8010.
        Baxter, J., did not participate.


[Editor's Note - For your convenience we reprinted below the Daily Journal's Ruling summary of the earlier decision.]


CONSTITUTIONAL LAW

Assessment on Kiwifruit Handlers to Fund State-Run Marketing And Promotional Operation Violates First Amendment.
        The C.A. 3rd has decided that the state could not force a kiwifruit handler to pay assessments to a state-run organization which produced generic advertising promoting the kiwifruit.
        The California Kiwifruit Commission was created to advertise and promote kiwifruit by developing and managing a national and international advertising program. The Commission was funded by revenues generated through the imposition of an assessment on the sale of fresh market kiwifruit. Kiwifruit producers could not opt out of the program and they did not receive any credit for their individual advertising and promotion expenditures. Dave Moss grew kiwifruit on 5 acres of land, and sold fresh kiwifruit and kiwifruit-based foods. In October 1992, the Commission sued Moss, seeking the assessments that he refused to pay from 1988-1992. Moss argued that he derived no benefit from the Commission's services. The Commission made no studies on the effect the advertising campaign had on the market. The trial court held for the Commission, finding that the assessment was constitutional.
        The C.A. 3rd reversed. Commercial speech analysis did not apply in this case because the speech involved did not pose a threat to the consumer. Therefore, the assessments had to pass the strict scrutiny test in order to be constitutional. The assessments raised associational concerns. The Commission's sole statutory purpose was to collect funds from, and provide generic advertising promoting kiwifruit for, Moss and other kiwifruit handlers. Kiwifruit handlers were forced to fund the Commission so that it could produce the advertisements, which the handlers might not want to be associated with, nor agree to. Since the Commission's sole purpose was speech, the assessments would only have been constitutional if they served a compelling state interest. The government failed to show a "compelling interest" in the promotion of a commodity statutorily acknowledged to be not heavily consumed in this country. Even if the state did have some interest in the health of the kiwifruit industry, it did not follow that it had a compelling interest in mandating the kiwifruit industry to support the promotional campaign. Furthermore, there was no way to determine whether a kiwifruit handler received any benefit from the Commission's efforts. The Commission failed to produce evidence that the advertising campaign financed by the assessments increased the sale of kiwifruit at all, let alone more effectively than the marketing techniques of the individual handlers.
        California Kiwifruit Commission v. Moss, C.A. 3rd, No. C018368, filed May 20, 1996, by Nicholson, J., Scotland, J. concurring,; Raye, J. dissenting.
        The full text of this case appears in 97 D.A.R. 5783, May 22, 1997.