Delano Farms Company v. California Table Grape Commiss ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DELANO FARMS COMPANY, a 
Washington corporation; THE
SUSAN NEILL COMPANY, a
California corporation; LUCAS No. 08-16233
BROS PARTNERHSHIP, a California D.C. No.
partnership,
Plaintiffs-Appellants,
 1:96-cv-06053-
OWW-DLB
v. OPINION
CALIFORNIA TABLE GRAPE
COMMISSION,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of California
Oliver W. Wanger, District Judge, Presiding
Argued and Submitted
April 15, 2009—San Francisco, California
Filed November 20, 2009
Before: Stephen Reinhardt, John T. Noonan and
M. Margaret McKeown, Circuit Judges.
Opinion by Judge McKeown;
Concurrence by Judge Reinhardt
15463
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15467
COUNSEL
Brian C. Leighton (argued), Clovis, California, for the appel-
lants.
Robert D. Wilkinson and Kendall L. Manock, Baker, Manock
& Jensen, Fresno, California, for the appellee.
Seth P. Waxman, Randolph D. Moss (argued), Todd C.
Zubler, Brian M. Boynton, and Amy Oberdorfer Nyberg, Wil-
mer Cutler Pickering Hale and Dorr LLP, Washington, DC,
for the appellee.
OPINION
McKEOWN, Circuit Judge:
We are again faced with the question whether a state statu-
tory scheme requiring growers to fund generic advertising for
promotion of an agricultural product violates the First
Amendment. Here, we consider the case of compelled assess-
15468 DELANO FARMS v. CALIFORNIA TABLE GRAPE
ments on California table grape1 growers, levied through the
California Table Grape Commission (the “Commission”).
Specifically, we address whether this generic advertising
scheme is the government’s own speech and is thereby
exempt from a First Amendment compelled speech challenge,
based on the Supreme Court’s analysis in Johanns v. Live-
stock Marketing Association, 544 U.S. 550 (2005), and our
decision in Paramount Land Co. LP v. California Pistachio
Commission, 491 F.3d 1003 (9th Cir. 2007). Because the
Commission’s promotional activities constitute government
speech that is immune to challenge under the First Amend-
ment, we affirm the district court’s grant of summary judg-
ment on this ground.
BACKGROUND
A. The Table Grape Commission
The Commission was established in 1967 by an act of the
California Legislature (the “Ketchum Act”), Cal. Food &
Agric. Code §§ 65500 et seq. The Legislature recognized that
“[g]rapes produced in California for fresh human consump-
tion comprise one of the major agricultural crops of Califor-
nia, and the production and marketing of such grapes affects
the economy, welfare, standard of living and health of a large
number of citizens residing in this state.” § 65500. Noting that
the “inability of individual producers to maintain or expand
present markets or to develop new or larger markets for such
grapes results in an unreasonable and unnecessary economic
waste of the agricultural wealth of this state,” the Ketchum
Act created the Commission to support the table grape indus-
1
“ ‘Fresh grapes’ also designated ‘table grapes’ means any and all varie-
ties of grapes produced in the State of California shipped for fresh human
consumption, but does not include grapes delivered to a processor for pro-
cessing or grapes processed by a processor or grapes delivered to a winery
for winemaking or grapes produced for use in the making of wine.” Cal.
Food & Agric. Code § 65523.
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15469
try through centralized advertising, marketing, research, and
government relations efforts. Cal. Food & Agric. Code
§ 65572.
The Commission is governed by a regulatory scheme that
applies to all state councils and commissions that relate to
agricultural and seafood markets. Cal. Food & Agric. Code
§§ 63901-63901.3. See also Paramount Land, 491 F.3d at
1006 (explaining that California has established a regulatory
scheme that applies to many state commissions and councils).
The Commission is authorized to undertake a broad range of
activities: (1) research into production, food safety, market-
ing, trend analysis, crop protection and production materials,
(2) efforts to secure the elimination of trade barriers, (3) edu-
cational outreach about the benefits of table grape usage and
consumption, (4) enhancement of the public conception of
table grapes to increase overall demand for the product, (5)
consumer education relating to environmental protection, (6)
cooperative crisis resolution, (7) participation in negotiations
with foreign governments, and (8) industry self-regulation.
§§ 63901-63901.3, 65500, 65572. See also Paramount Land,
491 F.3d at 1006 (describing similar for California Pistachio
Commission).
The Commission’s work is funded primarily by assess-
ments imposed on all shipments of California table grapes.
Cal. Food & Agric. Code § 65604. The Commission pre-
scribes the time and method of payment and directly collects
the assessments. § 65604.
The Secretary (the “Secretary”) of the California Depart-
ment of Food and Agriculture (the “CDFA”) retains authority
over the Commission’s activities through a few key functions.
All of the commissioners are appointed and subject to
removal by the Secretary. Cal. Food & Agric. Code §§ 65550,
65575.1. Any person aggrieved by any action of the Commis-
sion may appeal to the Secretary. Cal. Food & Agric. Code
§ 65650.5. Through this appeal process, the Secretary has the
15470 DELANO FARMS v. CALIFORNIA TABLE GRAPE
power to reverse the action of the Commission. § 65650.5.
Further, “[u]pon the finding of 11 of the members of the
[C]ommission that the operation of the provisions of [the
Ketchum Act] has not tended to effectuate its declared pur-
poses,” the Commission may recommend to the Secretary that
its operation be suspended. Cal. Food & Agric. Code § 65660.
The Ketchum Act provides that the Secretary will then con-
duct a referendum among grape producers to determine if the
Commission’s operations should be suspended. § 65660.
In addition, like other entities in the state government, the
Commission is subject to transparency, auditing, and ethics
regulations that aim to promote public accountability. See e.g.
§ 65572 (detailing that the Commission must “keep accurate
books, records and accounts of all of its dealings, which
books, records and accounts shall be open to inspection and
audit by the Department of Finance of the State of California
or other state officer charged with the audit of operations of
departments of the State of California”).
B. PROCEEDINGS BELOW
A group of table grape growers, Delano Farms Company,
Lucas Brothers Partnership, and The Susan Neill Company
(collectively, “Delano Farms”), filed suit against the Commis-
sion in 1996, objecting “to being compelled by state law to
pay money for generic advertising campaigns.” Delano Farms
v. Cal. Table Grape Comm’n (“Delano Farms I”), 318 F.3d
895, 896 (9th Cir. 2003). The generic advertising to which
Delano Farms objects focuses on the idea that fresh California
table grapes are consumed primarily as a snack and are a
healthy alternative for consumers, as opposed to other snack
options like ice cream, chips, french fries, and buttered pop-
corn. The Commission popularizes this sentiment mainly
through outdoor billboards and radio commercials.
Delano Farms maintains that the Commission’s advertising
efforts harmfully equate all table grapes, by virtue of the “ge-
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15471
neric” advertisements. Because the advertisements suggest
that all table grapes are fungible and of the same quality, Del-
ano Farms believes that the advertisements hurt Delano
Farms’s ability to distinguish its product from its competitors.
Delano Farms also objects to supporting efforts it finds
unnecessary or overly lavish, citing examples of travel and
benefits to the Commission’s employees, parties, and scholar-
ship funds. As a consequence of a hefty assessment—
$600,000 annually—Delano Farms argues that it has less
money to put towards its own promotional and other activi-
ties.
Delano Farms sought “a declaratory judgment that the
assessments violated their First Amendment rights, an injunc-
tion against collection, and for refunds.” Delano Farms I, 318
F.3d at 896. The district court rejected Delano Farms’s claim,
determining that the assessment scheme is constitutional.
In the growers’ first appeal Delano Farms I—we consid-
ered the district court’s decision in the context of two then-
recently decided Supreme Court cases Glickman v. Wileman
Brothers & Elliott, 521 U.S. 457 (1997), and United States v.
United Foods, Inc., 533 U.S. 405 (2001). As Delano Farms
I explains, in Glickman, the Supreme Court considered a chal-
lenge to federal marketing orders that charged an assessment
to tree fruit growers; “the Supreme Court held that the assess-
ments did not violate the First Amendment rights of the dis-
senting growers not to be forced to pay for speech in which
they preferred not to participate.” Delano Farms I, 318 F.3d
at 898 (internal citation omitted). The Court reasoned that the
generic advertising was “part of a broader collective enter-
prise in which [the growers’] freedom to act independently is
already constrained by the regulatory scheme.” Id. (quoting
Glickman, 521 U.S. at 469).
Delano Farms I noted that United Foods, a later Supreme
Court case, “went the other way.” Delano Farms I, 318 F.3d
at 898. The assessment at issue in United Foods concerned a
15472 DELANO FARMS v. CALIFORNIA TABLE GRAPE
program of compelled subsidies in the mushroom industry. Id.(internal citation omitted). We noted in Delano Farms I that
the Supreme Court struck down the assessment scheme as
unconstitutional; because in United Foods unlike in Glick-
man, there was no such “ ‘comprehensive program,’ just a
scheme that consisted mostly of generic promotion of mush-
rooms.” Delano Farms I, 318 F.3d at 898 (internal citation
omitted).
We thus considered in Delano Farms I whether the
Ketchum Act fell “on one side or the other of the Glickman-
United Foods distinction.” Delano Farms I, 318 F.3d at 899.
On the basis of the initial pleadings, we determined that the
Ketchum Act does not collectivize the industry in the same
manner as the tree fruit order at issue in Glickman. Delano
Farms I, 318 F.3d at 899. Reasoning that the “statute [is] sim-
ilar to the one at issue in United Foods,” we revived the suit,
deeming Delano Farms “entitled to First Amendment protec-
tion against state compulsion to fund generic advertising.”
Delano Farms I, 318 F.3d at 899-900.
The parties returned to the district court and resumed litiga-
tion. On remand, the Commission amended its answer to
allege that its speech and promotional activities are govern-
ment speech and are, therefore, not susceptible to a First
Amendment challenge. The parties agreed to suspend discov-
ery when the Supreme Court granted certiorari in Johanns, a
case involving compelled assessments in the beef market. In
Johanns, the Supreme Court decided the case in favor of the
Beef Board, resting on the same theory that the Commission
had added to its answer on remand: the mandatory assess-
ments for beef promotion went to fund government speech,
and thus were immune to challenge on First Amendment
grounds. Johanns, 544 U.S. at 560-62.
Following the Supreme Court’s decision in Johanns, both
sides moved for summary judgment. The district court
granted summary judgment to the Commission on the key
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15473
question in this litigation—whether the Commission’s activi-
ties are government speech such that they are insulated from
First Amendment scrutiny. The district court first held that
because the Commission is a government entity, its speech is
necessarily that of the government. In the alternative, the dis-
trict court held that the State has “effective control” over the
Commission’s message, such that under Johanns, the Com-
mission’s activities are government speech.2
ANALYSIS
[1] We now consider Delano Farms’s First Amendment
claim with the benefit of the Supreme Court’s decision in
Johanns. 544 U.S. at 553; see also Paramount Land, 491 F.3d
at 1010-12. The Commission’s activities may be classified as
government speech, unencumbered by the bounds of the First
Amendment, in either of two ways: (1) if the Commission is
itself a government entity, or (2) if the Commission’s message
is “effectively controlled” by the State, see Johanns, 544 U.S.
at 560-61. We conclude that the Commission’s activities are
government speech, taking into consideration both avenues
for classification of such speech.
I. TABLE GRAPE COMMISSION AS GOVERNMENT ENTITY
Whether the Commission, a state-created body, is a govern-
ment entity for First Amendment purposes is a question we
consider in light of the Supreme Court’s guidance in Keller v.
State Bar of California, 496 U.S. 1 (1990) and Lebron v.
National Railroad Passenger Corp., 513 U.S. 374 (1995). We
conclude that the scale tips to classifying the Commission as
a government entity.
Oddly, in its brief, Delano Farms is dismissive of govern-
2
Because we rest our decision on government speech, we do not reach
the district court’s resolution of the compelled speech challenge under
Glickman and United Foods.
15474 DELANO FARMS v. CALIFORNIA TABLE GRAPE
ment entity status as a basis for First Amendment immunity—
“The Commission and the court below relied upon the weak
fact that the Commission itself is a government entity. That’s
hardly little that matters when it comes to government
‘speech’ . . . .” According to Delano Farms, the Court in
Johanns would not have engaged in extensive discussion of
government oversight of the beef program if government
entity status were an easy resolution to the case. In Johanns,
however, the Court explicitly declined to address whether the
Operating Committee—the entity that creates the beef
messaging—was a governmental or nongovernmental entity.
See id. at 560 n.4. Instead, the Court noted that the Secretary
appoints all of the members of the Beef Board—the entity to
which assessments are remitted—and concluded that the Sec-
retary effectively controlled the Operating Committee’s mes-
saging. Id. at 560 n.4, 561-62. But, Johanns is unambiguous
that the governmental entity-nongovernmental entity dichot-
omy is relevant in a compelled subsidy challenge under the
First Amendment. See 544 U.S. at 560 n.4. Thus, the govern-
mental entity analysis remains a viable ground for determin-
ing exemption from the First Amendment. And, this case
presents a cleaner statutory scheme in which to do so because
the Commission acts, in effect, as both Beef Board and Beef
Operating Committee. In other words, all of the Ketchum Act
functions are performed by a single entity, the Commission,
whose commissioners are all appointed by the Secretary.
In Keller, the Court considered a First Amendment chal-
lenge brought by attorneys who objected to the State Bar of
California’s expenditure of mandatory dues on political and
ideological campaigns. 496 U.S. at 4. The State Bar’s first
line of defense was that it is a government actor and is thus
immune to a challenge under the First Amendment concern-
ing how it chooses to express itself. In rejecting this argu-
ment, the Court emphasized several characteristics of the
mandatory California Bar that distinguish it from a govern-
ment actor: (1) its funding comes principally from dues levied
on members rather than general appropriations; (2) its mem-
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15475
bers are solely lawyers, all of whom are required to join; (3)
its role is primarily advisory (e.g. the courts are responsible
for managing admission to practice and for disciplinary
action); and (4) as opposed to government officials, who “are
expected as a part of the democratic process to represent and
to espouse the views of a majority of their constituents,” the
organization “was created, not to participate in the general
government of the State, but to provide specialized profes-
sional advice to those with the ultimate responsibility of gov-
erning the legal profession.” Id. at 11-13. In light of these
factors, the Supreme Court resolved that the State Bar is not
a governmental entity whose own speech is immune to consti-
tutional challenge. Id. at 12.
[2] If Keller alone were the law, the Commission’s argu-
ment that it is a government entity would be a tougher sell.
Like the State Bar, the Commission is funded by mandatory
private assessments, and those paying the assessments come
exclusively from a single industry. § 65604. While the Com-
mission’s role is more than merely advisory, it arguably
focuses on a particular constituency, rather than the broader
citizenry of California. Cf. R.J. Reynolds Tobacco Co. v. She-
wry, 423 F.3d 906, 918 (9th Cir. 2005) (holding that a promo-
tional campaign designed by the California Department of
Health Services and funded by an excise tax on tobacco com-
panies was “government speech,” because “[w]hen California
uses funds from the tobacco surtax to produce advertisements,
it does so in the name of all of California’s citizens,” while
the arrangement in Keller, along with entities considered in
other cases, “represent[ed] only the interests of [a] particular
entity”).
A few years after Keller, however, the Supreme Court con-
sidered another case involving the question whether an entity
should be considered to be part of the federal government for
First Amendment purposes, Lebron v. Amtrak, 513 U.S. 374.
Although Lebron also involved an inquiry into whether
Amtrak was a governmental entity, the question before the
15476 DELANO FARMS v. CALIFORNIA TABLE GRAPE
Court was very different from that at issue in Keller. In Kel-
ler, the question was whether the State Bar’s speech was gov-
ernmental speech and therefore immune from constitutional
challenge, because the government is not required to be
impartial when speaking, as long as its speech is consistent
with the Establishment and Equal Protection clauses. See
Johanns v. Livestock Marketing Assn., 544 U.S. 550, 553
(2005) (“[T]he Government’s own speech . . . is exempt from
First Amendment scrutiny”); Columbia Broadcasting System,
Inc. v. Democratic National Committee, 412 U.S. 94, 139, n.
7 (1973) (Stewart, J., concurring) (“Government is not
restrained by the First Amendment from controlling its own
expression”). Although the government’s own speech is
immune from constitutional challenge, it is nonetheless
accountable under the First Amendment when it suppresses
the speech of others. See Pleasant Grove City, Utah v. Sum-
mum, ___ U.S. ___ 129 S. Ct. 1125, 1132 (2009) (“While
government speech is not restricted by the Free Speech
Clause, the government does not have a free hand to regulate
private speech on government property.”) The government is
required to provide neutral access to public fora—i.e. it may
not privilege one religious or political viewpoint over another
and it may not prevent individuals from expressing their opin-
ions, just because it disagrees with them. The denial of access
would violate the First Amendment right to freedom of
expression of the individuals whose right to speak was cur-
tailed. See Carey v. Brown, 447 U.S. 455, 463(1980).
In Lebron, the Court considered whether Amtrak was a
government entity and could therefore be sued when it cur-
tailed the speech of an individual who wanted to display a
political message on a billboard in Pennsylvania Station.
Lebron, 513 U.S. at 376-77. In determining that Amtrak was
a government entity, the Court explained that Congress estab-
lished Amtrak for “public convenience and necessity.” Id. at
384 (internal quotation omitted). Congress created Amtrak as
a corporation and gave the President the power to appoint the
majority of Amtrak’s board members. See id. at 384-85.
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15477
Viewing Amtrak as one in a “long history of corporations cre-
ated and participated in by the United States for the achieve-
ment of government objectives,” id. at 386, the Court held
that “where, as here, the Government creates a corporation by
special law, for the furtherance of government objectives, and
retains for itself permanent authority to appoint a majority of
the directors of that corporation, the corporation is part of the
Government for purposes of the First Amendment.” Id. at
400. As a result, Amtrak’s refusal to display a sign made by
the plaintiff was a decision that could be reviewed under the
First Amendment. Id.[3] Like Amtrak, the Commission was created by the Cali-
fornia Legislature as a corporation. Cal. Food & Agric. Code
§ 65551. It was also established to further governmental
objectives. § 65500(h) (“The production and marketing of
grapes produced in California for fresh human consumption
is declared to be affected with a public interest; the provisions
of this chapter are enacted in the exercise of the police power
of this state for the purpose of protecting the health, peace,
safety and general welfare of the people of this state.”). This
invocation of the State’s police power to protect health and
safety contrasts with the general “public interest” goal
advanced by the State Bar in Keller. See Keller, 496 U.S. at
13. Although the subsidy targets a specific industry, the Com-
mission’s focus is, unlike the Bar Association’s not on profes-
sional advice for its members but rather a broader purpose of
addressing the “unreasonable and unnecessary economic
waste of the agricultural wealth” of California. § 65500(e).
Significantly, the Secretary of the CDFA has the power to
appoint all of the commissioners, similar to the President’s
power vis a vis Amtrak. §§ 65550, 65563, 65566, 65575.1.
The Commission correctly points out that the Secretary has an
additional important power over the Commission—the
authority to remove a commissioner—that the President does
not possess over Amtrak.
Delano Farms’s assertion that Lebron applies only when an
entity should be constrained by the First Amendment, and not
15478 DELANO FARMS v. CALIFORNIA TABLE GRAPE
when an entity defensively seeks immunity from suits brought
under the First Amendment, finds no support in Lebron. The
Court’s statements of the issue in Lebron and Johanns, both
authored by Justice Scalia, are strikingly similar. In 1995 in
Lebron, Justice Scalia wrote: “[W]e consider whether the
actions of . . . Amtrak [ ] are subject to the constraints of the
Constitution.” 513 U.S. at 376. Ten years later in Johanns,
Justice Scalia explained: “[W]e consider whether a federal
program violates the First Amendment . . . the dispositive
question is whether the generic advertising . . . is the Govern-
ment’s own speech and therefore is exempt from First
Amendment scrutiny.” 544 U.S. 553. Nothing in Lebron sug-
gests that the government entity analysis was limited to an
offensive plaintiff posture. Rather, Lebron, like Johanns,
speaks generally to whether the speech is government speech
“for purposes of the First Amendment.” Lebron, 513 U.S. at
400.
[4] Nevertheless, there is admittedly an uncharted gap
between Keller and Lebron. Were we to decide this appeal
based solely on whether the Commission is a government
entity, Lebron and the strong indicia of governmental status
and control would tip the balance to classifying the Commis-
sion as a governmental entity. Under the circumstances here,
however, this question is closely related to the government
control question. Because the Commission’s activities are
effectively controlled by the State of California, also render-
ing them government speech, the bottom line remains the
same—the Commission’s advertising activities are govern-
ment speech and thus beyond the restraints of the First
Amendment.
II. THE STATE’S “EFFECTIVE CONTROL” OVER THE TABLE
GRAPE COMMISSION’S ACTIVITIES
Regarding the inquiry whether the Commission’s message
is “effectively controlled” by the state government, we turn to
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15479
the Supreme Court’s decision in Johanns and our decision in
Paramount Land.
A. Johanns v. Livestock Marketing Association
In Johanns, the Supreme Court considered the constitution-
ality of the Beef Promotion and Research Act of 1985 (the
“Beef Act”), Pub. L. No. 99-198, 99 Stat. 1597 (1985). The
Beef Act furthers a federal policy of promoting the marketing
and consumption of beef and beef products and funds those
activities through assessments on cattle sales and imports. See
Johanns, 544 U.S. at 553. “The statute directs the Secretary
of Agriculture to implement this policy by issuing a Beef Pro-
motion and Research Order,” id., (“Beef Order”), and speci-
fies that the Secretary should appoint a Beef Board that is to
convene an Operating Committee that is composed of 10 Beef
Board members and 10 representatives named by state beef
councils. Id. (citing 7 U.S.C. § 2904(4)(A)). The Operating
Committee is to design promotional campaigns, which are
approved by the Secretary before their release. Id.[5] The Court held that the Operating Committee’s promo-
tional activities constitute the government’s own speech
because the message is effectively controlled by the federal
government. Johanns, 544 U.S. at 560-61. In so holding, the
Court recognized three key factors about the program. First,
Congress directed the creation of the promotional program
and specified that the program should include “paid advertis-
ing, to advance the image and desirability of beef and beef
products.” Id. at 560 (quoting 7 U.S.C. §§ 2901(b), 2902(13))
(internal quotations omitted). Second, “Congress and the Sec-
retary have also specified, in general terms, what the promo-
tional campaigns shall contain . . . and what they shall not
. . .” Id. at 561 (internal citations omitted). Specifically, the
campaigns should not refer to brand or trade names of any
beef product. Id. “Thus, Congress and the Secretary have set
out the overarching message and some of its elements, and
they have left the development of the remaining details to an
15480 DELANO FARMS v. CALIFORNIA TABLE GRAPE
entity whose members are answerable to the Secretary (and in
some cases appointed by him as well).” Id. Finally, “the
record demonstrate[d] that the Secretary exercises final
approval authority over every word used in every promotional
campaign.” Id. The Court, therefore, held that the Beef Board
and the Operating Committee could rely on the government
speech doctrine to deflect the cattle associations’ challenge.
Id. at 562.
B. Paramount Land Co. LP v. California Pistachio
Commission
[6] Following Johanns, in Paramount Land, we applied
these principles to a First Amendment challenge to the Cali-
fornia Pistachio Commission. Paramount Land, 491 F.3d at
1010. Like the Beef Act, the California Legislature enacted
the Pistachio Act and created the Pistachio Commission to
promote the economic interests of the State. Id. at 1006 (citing
Cal. Food & Agric. Code § 63901). “The Pistachio Commis-
sion is directed to ‘promote the sale of pistachios by advertis-
ing and other promotional mean[s] . . . .” Id. at 1010 (Cal.
Food & Agric. Code § 69051(i). Only one of the nine mem-
bers of the Pistachio Commission is appointed by the Secre-
tary of the CDFA. The other eight pistachio commissioners
are selected by California pistachio growers. Id. at 1006 (cit-
ing § 63901).
Although the Pistachio Commission creates the specific
messaging based on the Legislature’s general directive, more
significant to the question of the State’s control, “the Pista-
chio Commission must submit to the Secretary of the CDFA,
for his concurrence, ‘an annual statement of contemplated
activities authorized [by the Pistachio Act], including adver-
tising, promotion, marketing research, and production
research.’ ” Id. at 1010 (quoting § 69051(q)). In addition, the
Secretary retains “broad statutory authority” to attend and par-
ticipate in Pistachio Commission meetings; to review the Pis-
tachio Commission’s budget and planned activities; to
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15481
conduct audits; to approve nomination and election proce-
dures; to decide appeals from grievances brought by growers;
and to suspend or discharge the Pistachio Commission’s pres-
ident. Id. at 1010-11 (citing Cal. Food & Agric. Code
§§ 69051, 69069, 69092).
[7] Ultimately, we determined that the pistachio growers’
challenge should be resolved in the same way as the beef pro-
gram in Johanns. Paramount Land, 491 F.3d at 1010. We rec-
ognized that the discussion of the specifics of the beef
promotion program in “Johanns did not set a floor or define
minimum requirements.” Paramount Land, 491 F.3d at 1011.
And, comparing the Beef Act and the Pistachio Act, we held
that the differences in statutorily provided oversight were “le-
gally insufficient” to distinguish the Pistachio Act from the
Beef Act, reasoning that “[t]o draw a line between these two
approaches to oversight risks micro-managing legislative and
regulatory schemes, a task federal courts are ill-equipped to
undertake.” Id. In short, we held that the message of the Pista-
chio Commission is “from beginning to end the message
established by the State.” Id.
C. Johanns and Paramount Land Applied to the Table
Grape Commission
The framework of statutes governing the Commission is
sufficiently similar to the schemes addressed in Johanns and
Paramount Land for us to conclude that the State exercises
effective control over the Commission’s activities. In other
words, the Commission’s message is “from beginning to end”
that of the State. See Paramount Land, 491 F.3d at 1012
(quoting Johanns, 544 U.S. at 560).
[8] The founding of the Commission, its structure, and its
relationship to the State of California is strikingly similar to
the beef program at issue in Johanns and the Pistachio Com-
mission considered in Paramount Land. Like the beef pro-
gram and the Pistachio Commission, the Commission was
15482 DELANO FARMS v. CALIFORNIA TABLE GRAPE
established by an act of the Legislature, the Ketchum Act.
§§ 65500 et seq. The California Legislature intended for the
Commission, like other commissions established by the State,
to “[i]mplement public policy through their expressive con-
duct.” § 63901(a). The Commission is tasked with
“[e]nhance[ing] the image of California agricultural and sea-
food products to increase the overall demand for these com-
modities.” § 63901(e). Also similar to the beef program in
Johanns and identical to the Pistachio Commission in Para-
mount Land, the Legislature provided an overriding directive
for the sorts of messages the state commissions should pro-
mote: “[T]he Legislature intends that the commissions and
councils operate primarily for the purpose of creating a more
receptive environment for the commodity and for the individ-
ual efforts of those persons in the industry, and thereby com-
plement individual, targeted, and specific activities.”
§ 63901(e).
The California Legislature was quite specific about its
expectations for the Commission and its messaging. The Leg-
islature declared that “[g]rapes produced in California for
fresh human consumption comprise one of the major agricul-
tural crops of California, and the production and marketing of
such grapes affects the economy, welfare, standard of living
and health of a large number of citizens residing in this state.”
§ 65500(a). The Legislature further defined the purpose of the
Commission’s work by declaring that the Commission should
focus on:
[t]he promotion of the sale of fresh grapes for human
consumption by means of advertising, dissemination
of information on the manner and means of produc-
tion, and the care and effort required in the produc-
tion of such grapes, the methods and care required in
preparing and transporting such grapes to market,
and the handling of the same in consuming markets,
research respecting the health, food, and dietetic
value of California fresh grapes and the production,
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15483
handling, transportation, and marketing thereof, the
dissemination of information respecting the results
of such research, instruction of the wholesale and
retail trade with respect to handling thereof, and the
education and instruction of the general public with
reference to the various varieties of California fresh
grapes for human consumption, the time to use and
consume each variety and the uses to which each
variety should be put, the dietetic and health value
thereof . . .
§ 65500(f). The specifics contained in § 65500(f) go much
further in defining the Commission’s message than the Beef
Act and Beef Order’s general directive that the Operating
Committee’s programming should discuss different types of
beef and that it should refrain from using brand names. See
Johanns, 544 U.S. at 561.
Like the Operating Committee in Johanns and the Pistachio
Commission in Paramount Land, the Commission is tasked
with developing specific messaging campaigns. Importantly,
the Secretary of the CDFA possesses the power of nomination
over all of the table grape commissioners. §§ 65550, 65575.1.
The Secretary’s power in this respect is greater than either the
Secretary of Agriculture’s power in Johanns (the Secretary
has the power to appoint all Beef Board members, but only
half of the Operating Committee, see Johanns, 544 U.S. at
560) or the Secretary of the CDFA’s power in Paramount
Land (eight pistachio commissioners are elected by industry
and only one is appointed by the Secretary of the CDFA, see
Paramount Land, 491 F.3d at 1006). The Secretary also has
the power to remove a table grape commissioner. §§ 65550,
65575.1. The State possesses additional oversight powers
over the Commission, as the Commission is required to “keep
accurate books, records, and accounts of all of its dealings”
and must make those records open to review by the State.
§ 65572(f).
15484 DELANO FARMS v. CALIFORNIA TABLE GRAPE
[9] Of course, there are some important differences
between the Ketchum Act on the one hand and the programs
considered in Johanns and Paramount Land on the other.
Unlike the Beef Order and the Pistachio Act, the Ketchum
Act does not require any type of review by the Secretary over
the actual messages promulgated by the Commission. Under
the Beef Order, the Beef Board and Operating Committee
send all plans to the Secretary for final approval. 7 C.F.R.
§§ 1260.68 & 1260.169. Likewise, the Pistachio Commission
must “submit to the secretary, for his or her concurrence, an
annual statement of contemplated activities . . . including
advertising, promotion, marketing research, and production
research.” § 69051(q). We recognize that final approval has
been statutorily provided to the relevant secretaries in other
commodities programs that courts have approved since
Johanns. See Am. Honey Producers Assoc., Inc. v. U.S.D.A.,
2007 WL 1345467, at *2 (E.D. Cal. May, 8, 2007) (determin-
ing that honey program funded by industry assessments
involved government speech and was therefore immune to
constitutional challenge, the court noted that the Act includes
a provision that gives the Secretary final approval power over
messages before they can be disseminated to the public); Avo-
cado Plus, Inc. v. Johanns, 421 F. Supp. 2d 45, 47-48 (D.D.C.
2006) (same, for avocado program); Cricket Hosiery, Inc. v.
United States, 429 F. Supp. 2d 1338, 1346 (Ct. Intl. Trade
2006) (same, for cotton program). We do not discount the sig-
nificance of the power over specific messaging.
[10] An additional noteworthy difference between the
Ketchum Act and the Pistachio Act, in particular, concerns
the Secretary’s power to “require the [Pistachio] commission
to correct or cease any existing activity or function that is
determined by the secretary not to be in the public interest or
to be in violation of this chapter.” Cal. Food & Agric. Code
§ 69032. The Ketchum Act does not grant a similar power to
the Secretary. Rather, under Cal. Food & Agric. Code
§ 65660, the Commission may recommend to the Secretary
that its operation be suspended, or producers may file a peti-
DELANO FARMS v. CALIFORNIA TABLE GRAPE 15485
tion with the Secretary recommending the same. At that point,
the Secretary causes a referendum to be conducted among
producers. § 65660. Although less direct, this route for review
still involves the Secretary in the oversight process. And, of
course, the ultimate power of review and oversight—the Sec-
retary’s authority to remove table grape commissioners—
cannot be discounted.
The bulk of Delano Farms’s remaining arguments distin-
guishing the State’s effective control over the Commission as
compared to the beef program and the Pistachio Act largely
rely on pointing out that the Secretary and the CDFA have, in
practice, performed virtually no supervision of the Commis-
sion. Delano Farms notes that the Secretary does not attend
meetings and does not review advertising and promotional
activities, nor does the State review the Commission’s bud-
gets. The record also reflects that the CDFA had very few
documents in its possession related to the Commission’s
work. In any event, Delano Farms’s laissez-faire argument is
foreclosed by Paramount Land, in which we underscored that
“passivity is not an indication that the government cannot
exercise authority.” 491 F.3d at 1011. Our focus in this case,
as in Paramount Land, is the statutorily-authorized control the
State has over the Commission, and not the actual level of
control evidenced in the record.
[11] While we acknowledge that there are differences in
statutorily-prescribed oversight afforded to the government in
the case of the Commission, the beef program, and the Pista-
chio Commission, these differences are legally insufficient to
justify invalidating the Ketchum Act on First Amendment
grounds. In sum, we are mindful of Paramount Land’s admo-
nition that “[t]o draw a line between these . . . approaches to
oversight risks micro-managing legislative and regulatory
schemes, a task federal courts are ill-equipped to undertake.”
Paramount Land, 491 F.3d at 1012.
15486 DELANO FARMS v. CALIFORNIA TABLE GRAPE
CONCLUSION
[12] The district court did not err in granting summary
judgment to the Table Grape Commission on the ground that
its promotional activities constitute government speech and
are thus immune to challenge under the First Amendment. We
AFFIRM the district court’s grant of summary judgment to
the Table Grape Commission on this dispositive issue.
AFFIRMED.
REINHARDT, Circuit Judge, concurring in part:
I concur in the majority opinion up to the concluding para-
graph of Part I. Rather than finding any “uncharted gap” or
performing any “tip[ping of] the balance,” I would simply
conclude that the Commission is a government entity and that
its speech is therefore government speech. For that reason, I
find Part II wholly unnecessary to the opinion, and would not
reach the question of government control. I express no view
as to any discussion or holdings contained in Part II.