South-Western Legal Studies in Business

Government Speech Not Subject to First Amendment Protections
Description Appeals court held that the state of California could force members of an industry to contribute to a common fund to subsidize industry advertising. Since the practice was overseen by the state, it was not subject to First Amendment claims against forced contribution to speech.
Topic Constitutional Law
Key Words First Amendment; Mandatory Assessments; Promotional Activity
C A S E   S U M M A R Y
Facts The California legislature created the Pistachio Commission (PC) to enhance the role of pistachios in the California economy. The PC was authorized to undertake research on production, marketing, crop protection, market stabilization, and other industry interests. Similar schemes apply to many agricultural and seafood products in California. Members of the PC are selected by the pistachio growers. Its budget is about $8 million a year. It collects fees from pistachio growers to promote generic ads for California pistachios. Paramount, the largest grower, that pays 25 to 30 percent of the PC’s assessments, objected to the system as ineffective and not consistent with the company’s interests. Paramount sued, challenging the mandatory assessments as a violation of the First Amendment. The district court issued a preliminary injunction for Paramount, ruling that the PC was not an arm of the government that could exercise the powers it did. The PC appealed.

Reversed and remanded. The First Amendment is not implicated when the government requires private parties to subsidize government speech. The California government created the PC and its Department of Agriculture oversees its activities, so the PC’s use of funds was government speech not subject to First Amendment coverage.

Citation Paramount Land Co. v. California Pistachio Comm., ---F.3d--- (2007 WL 1651257, 9th Cir., 2007)

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