Opinion ID: 3048946
Heading Depth: 2
Heading Rank: 1

Heading: state regulation of pistachios—the pistachio

Text: COMMISSION The California state legislature created the Pistachio Commission “to enhance and preserve the economic interests of the State of California,” by, among other activities, “[i]mplement[ing] public policy through [its] expressive conduct.” Cal. Food & Agric. Code § 63901. The Pistachio Commission administers the Pistachio Act and supports the pistachio industry through advertising, marketing, research, and government relations campaigns. See Pistachio Act § 69051. The Pistachio Commission is authorized to undertake a broad range of activity: (1) research into production, food safety, marketing, crop protection and production materials, (2) promotion of the elimination of trade barriers, (3) consumer education regarding the health benefits of pistachios, (4) demand-side regulation to stabilize the market, (5) analysis of relevant foreign, federal and state regulation, (6) cooperative crisis resolution, (7) cooperation with state and federal agencies in foreign negotiations, and (8) support of industry self-regulation. See Cal. Food & Agric. Code §§ 63901-63901.3. This regulatory scheme, which applies to all councils and commissions relating to agricultural or seafood markets in California, is designed to “work subject to, and together with, the constraints placed on the agricultural industry by state and federal statutes and regulations and international restrictions.” Id. § 63901.4. The Pistachio Commission has nine members, eight selected by California pistachio growers and one selected by the Secretary of the California Department of Food and Agriculture (“CDFA”). Pistachio Act § 69031. Acting through committees chaired by the commissioners, the Commission meets three times a year and employs a full-time staff to han- 7030 PARAMOUNT LAND CO. v. CALIFORNIA PISTACHIO COMM. dle daily operations. In addition to appointing one member of the committee, the Secretary of the CDFA (or a designee), may attend and participate in Pistachio Commission or committee meetings as an ex officio member. Id. Like other entities in the state government, the Commission is subject to transparency and ethics regulations designed to promote public accountability. The Secretary retains broad statutory authority to: (1) review and approve the Pistachio Commission’s annual budget and planned activities, (2) conduct fiscal and compliance audits, (3) approve nomination and election procedures, (4) decide appeals from grievance petitions filed by growers, and (5) suspend or discharge the Commission’s president. See id. §§ 69051, 69069, 69092. The Secretary also may require the Pistachio Commission to “correct or cease any activity or function that is determined by the secretary not to be in the public interest or to be in violation of [the Pistachio Act].” Id. § 69032. Although the Secretary has ultimate authority over the Commission’s budget, operations, and planning, the Secretary has declined to exercise many of his more specific statutory powers. Paramount and its various affiliated entities are the largest producers of pistachios in California, together paying between 25 and 30 percent of the Pistachio Commission’s total assessments in recent years. The expressive activity that has attracted Paramount’s ire centers around generic print and public relations advertising campaigns for California pistachios. The most recent campaign features the logo “California Pistachios” and the slogan “Grab a Handful.” The campaign included print advertising in magazines, media mailings, a satellite tour, talk-show appearances by spokesperson Jane Seymour, and promotion at the retail level (including pointof-sale promotional materials, price recommendations, and advertising incentives). Paramount maintains that these campaigns are “ineffective in augmenting pistachio sales,” “do not adequately feature the nuts themselves,” and are “antithet- PARAMOUNT LAND CO. v. CALIFORNIA PISTACHIO COMM. 7031 ical to Paramount’s interests,” which are to “increase sales by differentiating its products from competitor’s products.” Paramount also targets the Pistachio Commission’s government relations activities, which are coordinated by a political consultant who hires lawyers to represent the industry before the International Trade Commission and the Commerce Department, and to lobby government entities on behalf of the pistachio industry. Paramount complains that the Pistachio Commission has “not done enough to protect the domestic pistachio industry from foreign pistachios.” These offending activities are funded by mandatory assessments paid by pistachio producers and importers (via processors who deduct dues from the amount they pay the producers). See id. §§ 69081 & 69085. Failure to pay invites financial penalties and possible enforcement action by the Pistachio Commission. Id. §§ 69088-93. The majority of the Commission’s annual budget, which has fluctuated between $6.6 million and almost $8 million in recent years, is dedicated to the challenged expressive activity.