SW Legal studies in Business

Mandatory Advertising Contributions by Members of an Industry Violated First Amendment
Description Supreme Court held that a federal law that required all mushroom dealers to contribute funds to a general advertising campaign promoting mushrooms violated the First Amendment by making firms subsidize commercial speech they opposed. Such a requirement is legal if part of a more detailed regulatory scheme.
Topic Constitutional Law
Key Words Free Speech; Regulatory Scheme; Advertising; Assessments
C A S E   S U M M A R Y
Facts The Mushroom Promotion, Research, and Consumer Information Act mandates that mushroom handlers pay assessments used primarily to fund generic advertisements promoting mushroom sales. United Foods refused to pay the assessment, because it was forced to contribute for advertising it did not care to support, claiming that it violates the First Amendment. United Foods wanted to spend its advertising dollars for its own brand of mushrooms. Its administrative appeal to the Department of Agriculture was rejected and the district court upheld that decision, holding that the requirement to pay for advertising is part of a larger regulatory scheme of the mushroom industry. The appeals court reversed, holding that the payments were not part of a comprehensive statutory agricultural marketing program and so could not be justified. The Department of Agriculture appealed.
Decision Affirmed. The principal objective of the regulatory scheme here was to make assessments on all firms in the mushroom industry so that they contribute to a central advertising fund. That is a violation of the First Amendment. "First Amendment values are at serious risk if the government can compel a citizen or group of citizens to subsidize speech on the side that it favors; and there is no apparent principle distinguishing out of hand minor debates about whether a branded mushroom is better than just any mushroom." Such assessments may be allowed when they are part of a more comprehensive federal program that restricts freedom in the market, such as California fruits that are subject to detailed restrictions on output and other marketing controls.
Citation U.S. v. United Foods, Inc., - S.Ct. - (2001 WL 703953, Sup. Ct., 2001)

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