Court Opinion

ID: 9797068
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:12:27.137797+00
Date Added: 2024-06-11T08:52:30.668509
License: Public Domain

KENNARD, J., Concurring and Dissenting.
At issue here is whether compelled funding of commercial speech violates plaintiff’s free speech rights under the federal and state Constitutions. (U.S. Const., 1st Amend.; Cal. Const., art. I, § 2, subd. (a).) With respect to the California Constitution, I agree with the majority that the applicable test is the one articulated by the high court in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n (1980) 447 U.S. 557 [65 L.Ed.2d 341, 100 S.Ct. 2343] (Central Hudson). And I agree with the majority’s remand of that state constitutional issue to the trial court for factfinding regarding the details of the generic advertising program in question here. In addition, I agree with the majority’s reconsideration of our earlier determination that the challenged program does not violate *29the First Amendment. (See Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 497 [101 Cal.Rptr.2d 470, 12 P.3d 720] (Gerawan I).) But I disagree with the majority’s conclusion that the facts alleged here are insufficient to state a violation of the First Amendment.
I.
This case is similar to several lawsuits filed by others across the nation challenging on free speech grounds certain agricultural marketing programs. At issue in these cases are government-sanctioned agricultural programs that require growers or distributors to fund “generic” advertising, that is, advertising that urges the public to buy an agricultural commodity such as mushrooms or plums without distinguishing the products of any particular grower or distributor. The first case to reach the United States Supreme Court was Glickman v. Wileman Brothers & Elliott, Inc. (1997) 521 U.S. 457 [138 L.Ed.2d 585, 117 S.Ct. 2130] (Glickman). In that case, which arose in California, the high court concluded that two tree fruit marketing orders were merely “a species of economic regulation” that did not implicate the First Amendment rights of the objecting growers and distributors. (Id. at p. 477.) Four years later, the high court decided United States v. United Foods, Inc. (2001) 533 U.S. 405 [150 L.Ed.2d 438, 121 S.Ct. 2334] (United Foods), in which the court struck down a federal program that required mushroom distributors to fund generic advertising. The court held that the program violated the First Amendment because it did not “require group action, save to generate the very speech” to which the plaintiffs objected. (Id. at p. 415.)1
Here, plaintiff Gerawan Farming, Inc. (Gerawan) contends that the plums it developed, grows and distributes are superior to plums grown and marketed by others, and it therefore objects to the plum marketing order compelling it to contribute to the cost of generic advertising for plums. It sued California’s Secretary of Food and Agriculture, contending that the marketing order violated Gerawan’s free speech rights under both the federal and state Constitutions. As an aside, this is the second time the case has reached this court. In Gerawan I, supra, 24 Cal.4th 468, we reversed in part the Court of Appeal after it affirmed the trial court’s grant of the state’s motion for judgment on *30the pleadings, ruling that Gerawan’s complaint failed to state a cause of action under either the state or federal Constitution.
This court decided Gerawan I after the United States Supreme Court’s decision in Glickman, supra, 521 U.S. 457, but before its decision in United Foods, supra, 533 U.S. 405.1 joined Justice Stanley Mosk’s majority opinion in Gerawan I, which in rejecting Gerawan’s First Amendment claim relied on the holding in Glickman that the compelled funding of generic advertising was merely “a species of economic regulation” that did not implicate the First Amendment. (Gerawan I, supra, 24 Cal.4th at p. 500.) With respect to the California Constitution’s free speech clause, Gerawan I viewed the protection afforded under that clause as “ ‘broader’ and ‘greater’ ” than its federal counterpart. (Id. at p. 491.) But Gerawan I did not set forth any test to determine whether compelled funding of commercial speech violates the state Constitution, instead remanding the case to the Court of Appeal. Thereafter, the Court of Appeal, without articulating a test, held that the compelled funding violated California’s free speech clause. The court reasoned that because the Legislature had left to a majority of plum growers the decision whether to adopt a marketing order for plums, the compelled funding of generic advertising did not serve a governmental interest.
Again this court granted review, and it now reverses the Court of Appeal. This time, however, the majority sets forth a test to determine whether compelled funding of commercial speech violates the free speech clause of our state Constitution. (Cal. Const., art. I, § 2, subd. (a).) The test is the one that was articulated by the United States Supreme Court in Central Hudson, supra, 447 U.S. 557. That test asks (1) whether “the asserted governmental interest” underlying the regulation of commercial speech “is substantial”; (2) “whether the regulation directly advances the governmental interest asserted”; and (3) “whether it is not more extensive than is necessary to serve that interest.” (Id. at p. 566.) In Central Hudson, that test was used to ascertain the constitutionality of a New York State utility regulation banning commercial advertising. But 17 years later, in Glickman, supra, 521 U.S. 457, three of the high court’s four dissenters in that case—Justice Souter joined by Chief Justice Rehnquist and by Justice Scalia—would have applied that same test (Central Hudson) to compelled funding cases. (See Glickman, supra, at pp. 491-504 (dis. opn. of Souter, J.).)
The Central Hudson test is more protective of commercial speech rights than the First Amendment test endorsed by a majority of the high court in compelled funding cases. The latter asks only if the compelled funding is “ancillary to” some comprehensive regulatory program. (United Foods, supra, 533 U.S. at p. 411.) In light of this court’s holding in Gerawan I that the protection under the California Constitution’s free speech clause is greater *31than that afforded under the First Amendment to the federal Constitution, I agree with the majority here that the Central Hudson test governs the state constitutional issue in this case.
I also agree with remanding this matter to the trial court. Although the Court of Appeal may ultimately prove correct in its conclusion that the plum marketing order at issue here lacks any substantial governmental purpose (a conclusion fatal to the “compelled funding of speech” aspect of the program because it would fail the first of the three-part Central Hudson test), I agree with the majority that the parties should have a chance to litigate the scope and contours of the program before the trial court.
II.
My disagreement with the majority lies in its conclusion that the plum marketing order’s compelled funding of commercial speech does not infringe Gerawan’s free speech rights under the First Amendment of the federal Constitution. Given this court’s conclusion in Gerawan I that, applying the high court’s then-controlling decision in Glickman, supra, 521 U.S. 457 [117 S.Ct. 2130], the plum marketing program did not “implicate” the First Amendment, an explanation is in order. As mentioned earlier, after this court’s 2000 decision in Gerawan I, the United States Supreme Court, seven months later, held in United Foods, supra, 533 U.S. 405, that compelled funding of commercial speech violates the First Amendment if it is not “ancillary to” a comprehensive marketing program. (United Foods, supra, 533 U.S. at p. 411.) That holding now casts doubt on our conclusion in Gerawan I, which was compelled by the high court’s earlier decision in Glickman, supra, 521 U.S. 457, that there was no violation of Gerawan’s free speech rights under the federal Constitution.
Thus, unlike Justice Brown (cone. & dis. opn. of Brown, J., post, at p. 33), I agree with the majority that, in light of recent developments in the high court’s jurisprudence in the area at issue, we must reconsider our conclusion in Gerawan I that the plum order did not “implicate” the First Amendment to the federal Constitution.2
*32Although the majority is right in reconsidering the First Amendment issue, it is wrong in rejecting it on the merits based on the allegations in Gerawan’s complaint. The majority asserts those allegations do not state a First Amendment claim under United Foods, supra, 533 U.S. 405. (Maj. opn., ante, at p. 19 [“according to Gerawan’s pleadings,” the program constitutes cooperative regulatory activity that controls the quality and size of the product and that “spends a substantial portion of its assessment on developing and enforcing quality standards”].) I disagree. Gerawan’s complaint does state a cause of action under the First Amendment that the compelled funding of the commercial speech aspect of the plum marketing order was not “ancillary to” a comprehensive marketing program, as required by United Foods', that is, the program does not “require group action” other than that necessary “to generate the very speech” to which Gerawan objects. (United Foods, at pp. 411, 415.) On that basis, I would allow Gerawan to pursue its First Amendment challenge to the plum order in the trial court.
As noted earlier, this case is before us after the trial court granted the motion for judgment on the pleadings made by the state Secretary of Food and Agriculture. As relevant here, granting such a motion is proper only if the plaintiff’s “complaint does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) A motion for judgment on the pleadings has the same “ ‘purpose and effect of a general demurrer.’ ” (Smiley v. Citibank (1995) 11 Cal.4th 138, 146 [44 Cal.Rptr.2d 441, 900 P.2d 690].) As with a demurrer, therefore, both a trial and a reviewing court must liberally construe the pleadings “ ‘with a view to attaining substantial justice among the parties.’ ” (Heckendorn v. City of San Marino (1986) 42 Cal.3d 481, 486 [229 Cal.Rptr. 324, 723 P.2d 64]; Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 244-245 [74 Cal.Rptr. 398, 449 P.2d 462]; see Code Civ. Proc., § 452.) If there is a reasonable possibility that an amendment will cure an inherent defect in a complaint, a reviewing court should not affirm a trial court’s order granting judgment on the pleadings unless the plaintiff has been given an opportunity to amend its complaint. (See Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 385 [2 Cal.Rptr.3d 655, 73 P.3d 517]; Minsky v. City of Los Angeles (1974) 11 Cal.3d 113, 118 [113 Cal.Rptr. 102, 520 P.2d 726].)
Here, Gerawan’s complaint alleges that the “primary purpose” of the plum marketing program is a “promotion and market development program consisting of a ‘generic’ advertising program and other speech related activities,” but that it also includes “forced inspection regarding maturity, color, and other quality factors” as well as “general research, [and] educational programs.” It further alleges that of the 20-cent assessment on each 28-pound plum container, 11 cents funds the generic advertising, with only 2 cents spent on research and 7 cents on quality control and inspection. These allegations that more than half of the assessment is used to fund generic advertising, and that *33such advertising “and other speech related activities” constitute the “primary purpose” of the plum program are sufficient to state a cause of action that the program violates the First Amendment. In two cases presenting substantially similar facts to those alleged by Gerawan in this case, the federal Courts of Appeals for the Sixth and Eighth Circuits recently concluded that agricultural marketing orders violated the First Amendment. (See Michigan Pork Producers Ass’n, Inc. v. Veneman (6th Cir. 2003) 348 F.3d 157, 163; Livestock Marketing Ass’n v. U.S. Dept. of Agrie., supra, 335 F.3d 711, 717, cert, granted sub nom. Veneman v. Livestock Marketing Ass’n (May 24, 2004, No. 03-1164) 541 U.S. 1062 [158 L.Ed.2d 962, 124 S.Ct. 2389] and Nebraska Cattlemen, Inc. v. Livestock Marketing Ass’n, supra, 541 U.S. 1062 [158 L.Ed.2d 962, 124 S.Ct. 2390].)
Even were one to entertain a doubt as to the sufficiency of Gerawan’s allegations in stating a First Amendment claim, the majority—in light of the fact that Gerawan filed its complaint on January 31, 1994, more than seven years before the high court’s recent decision in United Foods, supra, 533 U.S. 405, and consistent with this court’s own precedents discussed above— should have granted Gerawan leave to amend its complaint.
Because of my conclusion that Gerawan’s complaint does state a cause of action for violation of its free speech rights under the First Amendment, I would reverse the trial court’s grant of the motion for judgment on the pleadings made by the California Secretary for Food and Agriculture on Gerawan’s First Amendment claim, and I would remand this case in its entirety to the trial court.

 The high court has just granted certiorari in another case involving generic marketing orders, Livestock Marketing Ass’n v. U.S. Dept. of Agrie. (8th Cir. 2003) 335 F.3d 711, 717, cert, granted sub nom. Veneman v. Livestock Marketing Ass’n (May 24, 2004, No. 03-1164) 541 U.S. 1062 [158 L.Ed.2d 962, 124 S.Ct. 2389], and Nebraska Cattlemen, Inc. v. Livestock Marketing Ass’n (May 24, 2004, No. 03-1165) 541 U.S. 1062 [158 L.Ed.2d 962, 124 S.Ct. 2390]. At issue is whether a United States Department of Agriculture program violates the First Amendment rights of American beef producers by requiring them to pay for advertisements such as “Beef: It’s What’s for Dinner,” which do not distinguish between American and foreign beef.

 Furthermore, because in Gerawan I our remand to the Court of Appeal encompassed only the issue whether the plum marketing order violated the California Constitution’s free speech clause, Gerawan’s additional contention that the order violated the First Amendment (a contention this court had rejected) was not before that court on remand. Accordingly, Gerawan was entirely correct, after the high court decided United Foods, supra, 533 U.S. 405, to raise the issue in this court, asking us in light of that recently decided case to reconsider our rejection of its First Amendment argument in Gerawan I.