Michigan Pork Producers Ass'n, Inc. v. Veneman

Page 157

348 F.3d 157

MICHIGAN PORK PRODUCERS ASSOCIATION, INC., et al., Plaintiffs, v. Ann M. VENEMAN, Secretary, United States Department of Agriculture, et al., Defendants-Appellants, Campaign For Family Farms, an Unincorporated Association of Membership Organizations, Defendant-Appellee.

Michigan Pork Producers Association, Inc., et al., Plaintiffs-Appellants, v. Ann M. Veneman, Secretary, United States Department of Agriculture, et al., Defendants-Appellees, Campaign for Family Farms, et al., Intervenors-Appellees.

No. 02-2337.

No. 02-2338.

United States Court of Appeals, Sixth Circuit.

Argued: March 14, 2003.

Decided and Filed: October 22, 2003. Pursuant to Sixth Circuit Rule 206

ARGUED:

Matthew M. Collette, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Susan E. Stokes, FARMERS LEGAL ACTION GROUP, INC., St. Paul, Minnesota, for Defendants. Edward M. Mansfield, (argued and briefed), BELIN LAMSON McCORMICK ZUMBACH FLYNN, Des Moines, Iowa, for Plaintiffs.

ON BRIEF:

Matthew M. Collette, Douglas N. Letter, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., Susan E. Stokes, David R. Moeller, FARMERS LEGAL ACTION GROUP, INC., St. Paul, Minnesota, for Defendants. Edward M. Mansfield, BELIN LAMSON McCORMICK ZUMBACH FLYNN, Des Moines, Iowa, Robert Charles Timmons, (briefed), BOYDEN, TIMMONS, DILLEY & HANEY, Grand Rapids, Michigan, for Plaintiffs.

Before: COLE, GILMAN, and BRIGHT, Circuit Judges.^*

OPINION

R. GUY COLE, JR., Circuit Judge.

Michigan Pork Producers Association, Inc., et al. ("MPPA") and the Secretary of Agriculture (the "Secretary") (collectively "Appellants") appeal the grant of summary judgment to Appellees Campaign for Family Farms, et al. ("CFF"). The United States District Court for the Western District of Michigan declared the Pork Promotion, Research and Consumer Information Act (the "Pork Act"), 7 U.S.C. § 4801 et seq., and the Pork Promotion Order issued thereunder, 7 C.F.R. § 1230, unconstitutional and issued an injunction terminating all activities under the Pork Act and the Pork Promotion Order. The Act mandates that pork producers and importers (collectively "pork producers") pay assessments, known as "checkoffs," to fund promotion, research, and consumer information to benefit the pork industry.

The district court held that requiring the payment of these assessments violates the First Amendment rights of pork producers by compelling them to subsidize speech with which they do not agree. Appellants argue that: (1) the assessments subsidize a government program that advances the government's policy of promoting pork consumption, and, therefore, are immune from First Amendment scrutiny; (2) even if not part of a government program, the assessments are not compelled speech; (3) the Pork Act program that requires the collection of assessments, is a lawful restraint on commercial speech; and (4) even if the use of assessments for promotion under the Pork Act violates the First Amendment, the injunction ordered by the district court is overly broad in that it eliminates funding for programs that are constitutional.

For the reasons stated below, we AFFIRM the grant of summary judgment by the district court.

I. BACKGROUND

As part of the Food Security Act of 1985, Congress enacted the Pork Act. The purpose of the Pork Act is to:

[A]uthorize the establishment of an orderly procedure for financing, through adequate assessments, and carrying out an effective and coordinated program of promotion, research, and consumer information designed to —

(A) strengthen the position of the pork industry in the marketplace; and

(B) maintain, develop, and expand markets for pork and pork products.

7 U.S.C. § 4801(b)(1). The Pork Act provides for the creation of a National Pork Producers Delegate Body ("Delegate Body"). 7 U.S.C. § 4806. The Delegate Body — which determines the amount and distribution of the assessments — consists of pork producers, who are nominated by the state pork producers associations and appointed by the Secretary, and pork importers, who are appointed by the Secretary based on the amount of assessments collected from importers. 7 U.S.C. § 4806(b)(1). The Pork Act also provides for the creation of a 15-member National Pork Board ("the Board"), 7 U.S.C. § 4808(a)(1), whose nominees are chosen by the Delegate Body and appointed by the Secretary. The Board is to develop and implement programs that fulfill the statutory mandates of promotion, research, and the provision of consumer information. 7 U.S.C. § 4808(b)(1). Although the United States Department of Agriculture ("USDA") provides some oversight over the Board, its Executive Vice President noted that it "is not to be considered as a governmental entity/agency or a government contractor." Moreover, the members of the Board receive no compensation from the government, and are reimbursed for expenses from the collected assessments. 7 U.S.C. § 4808(a)(1)(6).

Because the Pork Act explicitly states that its programs "shall be conducted at no cost to the Federal Government," 7 U.S.C. § 4801(b)(2), the Act provides for funding through mandatory assessments. 7 U.S.C. § 4809 et seq. In accordance with the provisions of the Pork Act, an initial Pork Promotion Order, establishing the Pork Checkoff Program, was issued by the Secretary in 1986. An initial referendum on the Pork Checkoff Program was held in 1988, and it was approved with the support of nearly eighty percent of pork producers. Payments are assessed against all producers of porcine animals that are sold or slaughtered for sale, and all importers of porcine animals, pork, or pork products.¹ 7 U.S.C. § 4809(a)(1). The Board receives all assessments, and distributes them according to formulas detailed in the Pork Act. Although most of the funds support generic advertising, some of the money is spent to promote specific brands of pork products.

CFF, a non-profit advocacy group consisting of a coalition of four family farm organizations as well as individual hog farmers, is devoted to "ensuring the continued existence of family farms, particularly hog farms." Since 1998, CFF's primary goal has been to end the Pork Checkoff Program. CFF believes that the advertising funded by the Pork Checkoff Program favors those who sell processed meats, misrepresents the safety and desirability of large commercial farming, and downplays the benefits of family farms. In May 1999, after CFF filed petitions with the USDA seeking a referendum on the termination of the Pork Checkoff Program, then-Secretary Glickman decided to conduct a voluntary, "fairness" referendum on the checkoff program's future.

On January 11, 2001, Secretary Glickman announced that a majority of individuals had voted to terminate the program, and that as a result, he would terminate it. MPPA filed suit the next day to enjoin the program's termination. Mich. Pork Producers Ass'n, Inc. v. Campaign for Family Farms, 174 F.Supp.2d 637, 639 (W.D.Mich. 2001) ("MPPA I"). On January 19, 2001, the district court issued a temporary restraining order pending hearing of the preliminary injunction motion. Id. Between the restraining order and the scheduled hearing, newly-appointed Secretary of Agriculture Veneman decided to preserve the Pork Checkoff Program, albeit with the funds collected by the Pork Checkoff Program administered directly by the Board instead of by the NPPC.

On June 25, 2001, the Supreme Court in United States v. United Foods, 533 U.S. 405, 121 S.Ct. 2334, 150 L.Ed.2d 438 (2001), invalidated — as contrary to the First Amendment's prohibition against compelled speech — the Mushroom Checkoff Program created by the Mushroom Promotion, Research, and Consumer Information Act, 7 U.S.C. § 6101 et seq. (the "Mushroom Act"). Like the Pork Act, the Mushroom Act required producers and importers of mushrooms to pay assessments that were primarily used to fund generic advertising that promoted the sale of mushrooms. CFF subsequently added to its complaint a First Amendment challenge to the Pork Act. MPPA I, 174 F.Supp.2d at 639. On December 4, 2001, the district court upheld the legality of Secretary Veneman's decision to preserve the Pork Checkoff Program. MPPA I, 174 F.Supp.2d at 643-44. The court explicitly stated, however, that its ruling had no effect on the other claims of the parties, including CFF's First Amendment challenges. Id. at 648.

CFF then voluntarily dismissed all of its remaining challenges to the Pork Checkoff Program, save for its First Amendment claims. Mich. Pork Products v. Campaign for Family Farms, 229 F.Supp.2d 772, 777 (W.D.Mich.2002) ("MPPA II"). The parties filed cross-motions for summary judgment. On October 25, 2002, the district court granted CFF's summary judgment motion, holding that the First Amendment prohibited the Pork Checkoff Program and enjoining it in its entirety. Id. at 792. MPPA and the Secretary filed timely Notices of Appeal, and this Court subsequently granted a stay of the district court's injunction pending the appeal.

II. ANALYSIS

A. Standard of Review

We review the district court's grant of summary judgment de novo. See Watkins v. City of Battle Creek, 273 F.3d 682, 685 (6th Cir.2001). Summary judgment is granted when the record, viewed in the light most favorable to the nonmoving party, reveals that there is no genuine issue of material fact such that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

B. Standing

Plaintiffs have standing under Article III to challenge the Pork Act. MPPA challenges the standing of CFF, claiming that: (1) several named appellees lacked standing because they do not pay assessments under the Pork Act and are unaffected by these provisions of the Pork Act requiring such payments; and (2) CFF does not have standing as an association under the test articulated in Hunt v. Wash. Apple Adver. Comm., 432 U.S. 333,...