Summary of a Recent
Judicial Development in
Checkoff Decisions

Fifth Circuit Holds Alligator
Checkoff Unconstitutional

Harrison M. Pittman
Staff Attorney

Summary of Decision

In Pelts & Skins, LLC v. Landreneau, No.03-30523, 2004 WL 725275 (5th Cir. Apr. 2, 2004), the United States Court of Appeals for the Fifth Circuit held that a state's alligator checkoff program was unconstitutional.

Background

The state of Louisiana collected mandatory assessments to support the generic marketing of alligator products. See id. Plaintiff Pelts & Skins, LLC (Pelts and Skins) brought an action against the state of Louisiana, arguing that the practice of collecting mandatory assessments to fund generic advertising violated the First Amendment. See id. The United States District Court for the Middle District of Louisiana agreed with Pelts and Skins, holding that the use of mandatory assessments to fund generic alligator marketing violated the First Amendment. See id. Louisiana appealed the district court's decision to the Fifth Circuit. See id.

Arguments

Pelts and Skins argued that "Louisiana violated the First Amendment by imposing mandatory fees . . . , then using those fees to subsidize a message with which Pelts & Skins disagrees." Id. at *2. Louisiana argued that the generic marketing was government speech and therefore not subject to First Amendment scrutiny. See id. Louisiana argued in the alternative that "the generic marketing was merely ancillary to a broader cooperative regime and therefore consistent with the First Amendment." Id.

Analysis and Holdings

The Fifth Circuit explained that "[t]he government speech doctrine holds that 'when the government appropriates public funds to promote a particular policy of its own, it is entitled to say what it wishes.'" Id. at *4 (citation omitted). It also explained that the government speech doctrine is inapplicable "if a program is 'designed to facilitate private speech, not to promote a governmental message.'" Id. (citation omitted). The court held that the collecting of mandatory assessments to generate funds that supported generic alligator marketing constituted a compelled subsidy for private speech. See id. at *6. It stated that

[w]e are not dealing with a program funded from the general revenues by broadly applicable taxes. Nor are we dealing with a governmental message crafted, controlled, and expressed by an agency designed to represent state government. Rather, in this case we confront a program in which the government uses its authority to exact fees from private individuals, then facilitates the use of those fees to express a message designed to benefit private commercial interests. This sort of program is not government speech.

Id. at *4. The court stated, however, that the mandatory assessments and generic advertising may nonetheless be permissible under the First Amendment. See id. at *6.

The court explained that in Glickman v. Wileman Bros. & Elliot, Inc., 521 U.S. 457 (1997) the United States Supreme Court considered a similar challenge to a regulatory scheme that required certain fruit producers to pay mandatory assessments in order to fund generic fruit marketing. See id. In Glickman, the Court held that because the fruit growers "were part of a 'broader collective enterprise in which their freedom to act independently [was] already constrained by the regulatory scheme,' the mandatory assessments and generic marketing at issue were "'a species of economic regulation that should enjoy the same strong presumption of validity that we accord to other policy judgments made by Congress.'" Id. (citations omitted). The Court therefore upheld the compelled subsidies for generic fruit marketing. See id. The court further explained that in United States v. United Foods, 533 U.S. 405 (2001), the Court struck down a mushroom program that required mushroom handlers to pay mandatory assessments used to fund generic mushroom marketing. See id. at *7 (citation omitted). In United Foods the Court reasoned that unlike the regulatory scheme at issue in Glickman, "the mushroom program was not 'ancillary to a more comprehensive program restricting marketing autonomy.'" Id. (citation omitted).

The court concluded that

[w]e agree with the district court that Louisiana's generic alligator marketing program more closely resembles the mushroom program at issue in United Foods than the fruit program at issue in Glickman. The Glickman rule permitting compelled subsidies applies when individuals have be "bound together" in a collective [enterprise]. Without an underlying collectivized association, a state cannot justify a compelled subsidy. Louisiana alligator producers are not part of a collective association akin to Glickman's marketing cooperative. None of the laws governing alligator production imposes collective rather than competitive marketing as the scheme in Glickman did. Rather, . . . Louisiana does not regulate prices in the alligator market, and alligator harvesters are free to negotiate prices and to market products as they wish.

Id. (citations omitted).

The case was decided on April 2, 2004; this summary was posted June 10, 2004.