No. 00-276: United States v. United Foods, Inc.

Supreme Court Briefs

No. 00-276

In the Supreme Court of the United States

UNITED STATES OF AMERICA AND
UNITED STATES DEPARTMENT OF AGRICULTURE, PETITIONERS

UNITED FOODS, INC.

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

JOINT APPENDIX

BARBARA D. UNDERWOOD
Acting Solicitor General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
Counsel of Record
for Petitioners

LAURENCE H. TRIBE
Hauser Hall 420
1575 Massachusetts Avenue
Cambridge, MA 02138
(617) 495-4621
Counsel of Record
for Respondent

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE (JACKSON)

Civil No. 96-CV-1252

UNITED STATES

UNITED FOODS, INC.
DOCKET ENTRIES

_________________________________________________

DATE

DOCKET NUMBER

PROCEEDINGS

_________________________________________________

10/16/96 1 COMPLAINT (Summons(es) issued) (gn) [Entry date 10/17/96] [1:96cv1252]

11/6/96 2 MOTION by USA for summary judgment or, in the alternative, for a preliminary injunction - CJT wpo (pb) [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

11/6/96 3 MEMORANDUM by USA in support of motion for summary judgment (2-1), of motion for a preliminary injunction [2-2] w/attmts: declaration of Wade Whitfield; report; cpy of check - CJT (pb) [1:96cv1252]

11/29/96 4 NOTICE OF FILING OF WAIVER OF SERVICE OF SUMMONS by defendant United Foods, Inc. w/attd waiver - CJT (pb) [Entry date 12/02/96] [1:96cv1252]

1/14/97 5 ANSWER by defendant United Foods, Inc. to cmplt [l-1] - CJT (pb) [1:96cv1252]

1/14/97 6 MOTION by defendant to stay proceedings w/attmt: COA decision, 9th Cir. - CJT (pb) [1:96cv1252]

1/14/97 7 MOTION by defendant to file

a memorandum in excess of page limitation - CJT wpo (pb) [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

1/14/97 8 RESPONSE by defendant to motion for summary judgment [2-1], to motion for a preliminary injunction [2-2] - CJT (pb) [1:96cv1252]

1/14/97 9 BRIEF IN OPPOSITION by defendant regarding motion for sum jgm [2-l], regarding motion for prel inj [2-2] - CJT (pb) [1:96cv1252]

1/14/97 9 BRIEF by defendant in support of motion to stay [6-1] - CJT (pb) [1:96cv1252]

1/14/97 10 DECLARATION by defendant in support of dft's opposition [9-l] to plt's motion for sum jgm or, in the alternative, for prel inj w/attd Exhs: 1. United Food's administrative peition; 2. Admin Law Judge decision; 3. ALJ's decision

on respondent's motion for reconsideration; 4. excerpts from transcript of Mills hearing; 5. ALJ's "Summary of Telephone Conference" - CJT (pb) [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

1/14/97 11 SETTING LETTER: scheduling conference set for 2/13/97 at 11:00 before MagJBreen Rm 320 Fed Bldg Jackson (bph) [1:96cv1252]

1/29/97 12 SETTING LETTER: scheduling conference reset for 2/24/97 at 9:30 before Mag J Breen (bph) [Entry date 01/30/97] [1:96cv1252]

2/6/97 13 ORDER by Judge James D. Todd granting motion to file a memorandum in excess of page limitation [7-1] - CJT (cc: all counsel) (pb) [Entry date 02/07/97] [1:96cv1252]

2/11/97 14 ORDER by Judge James D. Todd granting dft United Foods motion to stay proceedings [6-1], CASE STAYED (cc: all counsel) (skp) [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

2/14/97 15 REPLY by USA to response to motion for summary judgment [2-1], motion for a preliminary injunction [2-2] w/attmts: A. opinion/order USDC WD/MI; B. summary of teleconference-stay order; C. transcript; D. USDA report re mushrooms - CJT (pb) [1:96cv1252]

3/7/97 16 MEMORANDUM by plaintiff in support of plt's motion for reconsideration of stay order - CJT wpo (pb) [1:96cv1252]

3/18/97 17 RESPONSE TO THE MOTION FOR RECONSIDERATION

by defendant - CJT (pb) [1:96cv1252]

3/20/97 18 ORDER DENYING MOTION FOR RECONSIDERATION by Judge James D. Todd re Memorandum in support of Plaintiff's Motion for Reconsideration of Stay Order[16-1] (cc: all counsel)CJT (bph) [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

2/17/98 19 ORDER by Judge James D. Todd stay lifted and granting addtnl time to file supplmtl memoranda. The court hereby allows the United States an addtnl twenty (20) days in which to file a supplmtl memo in support of USA's motion for sum jgm, or in the alterantive [sic] for prel inj. United Foods will then have twenty (20) days in which to respond - CJT (cc: all counsel) (pb) [Entry date 02/18/98] [1:96cv1252]

3/23/98 20 MOTION by defendant to consolidate cases w/Exh: A. cmplt in action 98-1082 - CJT (pb) [1:96cv1252]

3/27/98 21 MOTION by defendant United Foods, Inc. for attorney Bradley A. MacLean to appear pro hac vice w/cert of good standing - CJT wpo (pb) [Entry date 03/30/98] [Edit date 03/30/98] [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

3/27/98 22 PRO HAC VICE FEE PAID: in the amount of $10.00 receipt

# 19095 by Farris, Warfield

& Kanaday on behalf of

atty Bradley A. MacLean

(pb) [Entry date 03/30/98] [1:96cv1252]

3/27/98 23 ORDER by Judge James D. Todd granting motion for attorney Bradley A. MacLean to appear pro hac vice [21-1] - CJT (cc: all counsel) (pb) [Entry date 03/30/98] [1:96cv1252]

4/17/98 24 ORDER by Judge James D. Todd granting motion to consolidate cases [20-1] 1:96-cv-1252 with member cases 1:98-cv-1082 - CJT (cc: all counsel) (pb) [Entry date 04/20/98]

5/12/98 25 ATTORNEY APPEARANCE for USA by atty Pamela J. Aronson (recd fr Mphs) - CJT (pb) [Entry date 05/15/98] [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

5/21/98 26 MOTION by govt dft AGRI (US Dept of Agriculture)

in 1:98-cv-01082 to dismiss, or,

in the alterntive [sic], for summary judgment - CJT (pb) [Entry date 05/22/98] [1:96cv 1252 1:98cv1082]

5/21/98 27 MEMORANDUM by govt dft AGRI (US Dept of Agriculture) in 1:98-cv-01082 in support of motion to dismiss [26-1] in 1:98-cv-01082, of motion for summary judgment [26-2]in 1:98-cv-01082 w/Exhs: 1-2. USDC memorandum opinion/orders; 3. order; 4. program announcement; 5. USDA petition; 6. USDA decision/order of dismissal; 7. USDA decision/order - CJT (pb) [Entry date 05/22/98] [1:96cv1252 1:98cv1082]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

6/19/98 28 MOTION by defendant United Foods, Inc. in 1:96-cv-01252, plaintiff United Foods, Inc. in 1:98-cv-01082 to extend time to file resp to the govt's motion to dism - CJT wpo (pb)[Entry date 06/22/98] [1:96cv1252 1:98cv1082]

6/22/98 29 ORDER by Judge James D. Todd granting motion to extend time to file resp to

the govt's motion to dism [28-1] in 1:96-cv-01252, 1:98-cv-01082 - CJT (cc: all counsel) (pb) [Entry date 06/23/98] [1:96cv1252 1:98cv1082]

7/9/98 31 RESPONSE by defendant United Foods, Inc. to motion to dismiss [26-1] - CJT (pb) [Entry date 07/13/98] [1:96cv1252]

7/9/98 32 AFFIDAVIT of Donald Dresser w/Exh: A. Mushroom Council 1997 Management Report - CJT (pb) [Entry date 07/13/98] [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

7/9/98 33 MEMORANDUM by defendant in 1:96-cv-01252 in support of motion response [31-1] w/Exh: 1. article by Justice John Paul Stevens, "The Freedom of Speech" - CJT (pb) [Entry date 07/13/98] (1:96cv1252]

7/10/98 30 SETTING LETTER; scheduling conference set for 4:00 7/30/98 Rm 320 Fed Bldg Jackson before MagJBreen (bph) [1:96cv1252]

7/17/98 34 REPLY by USA to response to motion to dismiss [26-1], motion for summary judgment [26-2] w/Exh: 1. US COA opinion (recd fr Mphs 7/20/98) - CJT (pb) [Entry date 07/21/98] [1:96cv1252]

7/27/98 35 SETTING LETTER; scheduling conference reset for 9:15 9/10/98 Rm 320 Fed Bldg Jackson before MagJBreen (bph) [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

7/28/98 36 ORDER by Judge James D. Todd granting motion for summary judgment [26-2], granting motion for summary judgment [2-1] terminating party United Foods, Inc. in 1:96-cv-01252, - CJT wpj, OB (cc: all counsel) (pb) [Entry date 07/29/98] [1:96cv1252]

7/31/98 37 JUDGMENT: in favor of pla USA by Judge James D. Todd dismissing case and (1:98-cv-01082) consolidation termed (cc: all counsel) (skp) [Entry date 08/03/98] [1:96cv1252]

8/12/98 38 MOTION by plaintiff USA to alter or amend jgmt (recd

fr Mphs 8/14/98) - CJT

(pb) [Entry date 08/14/98] [1:96cv1252]

8/12/98 39 MEMORANDUM by plaintiff USA in support of motion to alter or amend jgmt [38-1] (recd fr Mphs 8/14/98) - CJT (pb) [Entry date 08/14/98] [1:96cv1252]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

8/21/98 40 RESPONSE by defendant United Foods, Inc. to motion to alter or amend jgmt [38-1] - CJT (pb) [Entry date 08/24/98] [1:96cv1252]

9/4/98 41 ORDER by Judge James D. Todd denying motion to alter or amend jgmt [38-1] (cc: all counsel) CJT (bph) [1:96cv 1252]

9/24/98 42 NOTICE OF APPEAL by defendant United Foods, Inc. from Dist. Court decision order [36-2] - CJT (pb) [Entry date 09/25/98] (1:96cv1252)

* * * * *

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE (JACKSON)

No. 98-CV-1082

UNITED FOODS, INC., PLAINTIFF

UNITED STATES AND
DEPARTMENT OF AGRICULTURE, DEFENDANTS

DOCKET ENTRIES

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

3/23/98 1 COMPLAINT (Summons(es) issued) Receipt #: 19076; Filing fee $150.00 - CJT (gn) [1:98cv1082]

3/27/98 2 MOTION by plaintiff for attorney Bradley A. MacLean to appear pro hac vice w/cert of good standing - CJT wpo (pb) [Entry date 03/30/98] [1:98cv1082]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

3/27/98 3 PRO HAC VICE FEE PAID:

in the amount of $ 10.00 receipt # 19095 by Farris, Warfield & Kanaday on behalf of atty Bradley A. MacLean

(pb) [Entry date 03/30/98] [1:98cv1082]

3/27/98 4 ORDER by Judge James D. Todd granting motion for attorney Bradley A. MacLean to appear pro hac vice [2-1] - CJT (cc: all counsel; B. Quarles) (pb) [Entry date 03/30/98] [Edit date 03/30/98] [1:98cv1082]

4/17/98 5 ORDER by Judge James D. Todd consolidating cases 96-1252 w/98-1082 - CJT (cc: all counsel) (pb) [Entry date 04/20/98] [1:98cv1082]

4/27/98 6 RETURN OF SERVICE executed upon defendant AGRI on 4/6/98, cert mail (pb) [Entry date 04/29/98] [1:98cv 1082]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

4/27/98 7 RETURN OF SERVICE executed upon defendant USA by Atty Genrl J. Reno on 3/30/98, cert mail (pb) [Entry date 04/29/98] [1:98cv1082]

4/27/98 8 RETURN OF SERVICE executed upon defendant USA by USA/V. Coleman on 3/26/98, cert mail (pb) [Entry date 04/29/98] [1:98cv1082]

5/21/98 26 MOTION by govt dft AGRI (US Dept of Agriculture) in 1:98-cv-01082 to dismiss, or, in the alterntive [sic] , for summary judgment - CJT (pb) [Entry date 05/22/98] [1:96cv 1252 1:98cv1082]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

5/21/98 27 MEMORANDUM by govt dft AGRI (US Dept of Agriculture) in 1:98-cv-01082 in support of motion to dismiss [26-1] in 1:98-cv-01082, of motion for summary judgment [26-2] in 1:98-cv-01082 w/Exhs: 1-2. USDC memorandum opinion/orders; 3. order; 4. program announcement; 5. USDA petition; 6. USDA decision/order of dismissal; 7. USDA decision/ order -CJT (pb)[Entry date 05/22/98] [1:96cv 1252 1:98cv 1082]

6/19/98 28 MOTION by defendant United Foods, Inc. in 1:96-cv-01252, plaintiff United Foods, Inc.

in 1:98-cv-01082 to extend time to file resp to the govt's motion to dism - CJT wpo

(pb) [Entry date 06/22/98] [1:96cv1252 1:98cv1082]

_________________________________________________

DOCKET

DATE NUMBER PROCEEDINGS

_________________________________________________

6/22/98 29 ORDER by Judge James D. Todd granting motion to extend time to file resp to the govt's motion to dism [28-1]

in 1:96-cv-01252, 1:98-cv-01082 - CJT (cc: all counsel) (pb) [Entry date 06/23/98] [1:96cv1252 1:98cv1082]

7/28/98 30 ORDER by Judge James D. Todd granting motion for summary judgment [26-2] terminating party AGRI in 1:98-cv-01082, party USA in 1:98-cv-01082 - CJT wpj, OB (cc: all counsel) (pb) [Entry date 07/29/98] [1:98cv1082]

7/31/98 31 JUDGMENT: per order field [sic] 7/28/98 granting motion for summary judgment and judgment entered on behalf of USA by Judge James D. Todd terminating case and terminating case consolidation (cc: all counsel) (skp) [Entry date 08/03/98] [1:98cv1082]

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

No. 98-6436

UNITED FOODS, INC., PLAINTIFF-APPELLANT

UNITED STATES OF AMERICA;
UNITED STATES DEPARTMENT OF AGRICULTURE,
DEFENDANT-APPELLEE

DOCKET ENTRIES

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

10/28/98 Civil Case Docketed. Notice filed by Appellant United Foods Inc. Transcript needed: n (ac)

10/28/98 BRIEFING LETTER SENT setting briefing schedule: appellant brief due 12/7/98; appellee brief due 1/6/99; reply brief due 1/20/99; appendix due 1/27/99; final briefs due 2/17/99. [98-6436] (ac)

11/12/98 APPEARANCE filed by Attorney Bradley A. MacLean for Appellant United Foods Inc [98-6436](ac)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

11/12/98 PRE-ARGUMENT STATEMENT filed by Bradley A. MacLean for Appellant United Foods Inc [98-6436] (ac)

11/12/98 APPEARANCE filed by Attorney Tara Looney Swafford for Appellant United Foods Inc [98-6436] (ac)

11/18/98 APPEARANCE filed by Attorney August E. Flentje for Appellees Dept of Agriculture, USA [98-6436] (ac)

11/18/98 APPEARANCE filed by Attorney Barbara C. Biddle for Appellees Dept of Agriculture, USA [98-6436] (ac)

12/10/98 PROOF BRIEF filed by Bradley A. MacLean for Appellant United Foods Inc. Certificate of service date 12/7/98 Number of Pages: 34. [98-6436] (ac)

12/10/98 Request to require oral argument filed by Bradley A. MacLean for Appellant United Foods Inc [98-6436] (ac)

1/11/99 PROOF BRIEF filed by August E. Flentje for Appellees Dept of Agriculture, USA. Certificate of service date 1/6/99. Number of Pages: 98. [98-6436] (ac)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

1/11/99 Request to waive oral argument and submit case on the briefs, (waiver on page: unnumbered), filed by August E. Flentje for Appellee Dept of Agriculture, Appellee USA [98-6436] (ac)

1/22/99 PROOF REPLY BRIEF filed by Bradley A. MacLean for Appellant United Foods Inc. Certificate of service date 1/20/99 [98-6436] (ac)

2/1/99 APPENDIX filed by Bradley A. MacLean for Appellant United Foods Inc. Copies: 5. Certificate of service date 1/27/99 [98-6436] (ac)

2/18/99 FINAL BRIEF filed by August E. Flentje for Appellees Dept of Agriculture, USA. Copies: 7. Certificate of service date 2/16/99. Number of Pages: 98. [98-6436] (ac)

2/18/99 Request to waive oral argument and submit case on the briefs, (waiver on page: un-numbered), filed by August E. Flentje for Appellees Dept of Agriculture, USA [98-6436] (ac)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

2/22/99 FINAL BRIEF filed by Bradley A. MacLean for Appellant United Foods Inc. Copies: 7. Certificate of service date 2/17/99 Number of Pages: 60. [98-6436] (ac)

2/22/99 Request to require oral argument filed by Bradley A. MacLean for Appellant United Foods Inc [98-6436] (ac)

2/22/99 FINAL REPLY BRIEF filed by Bradley A. MacLean for Appellant United Foods Inc. Copies: 7 Certificate of service date 2/17/99 Number of Pages: 18. [98-6436] (ac)

7/13/99 Oral argument date set for September 23, 1999 in court room 403. Notice of argument sent to counsel. [98-6436] (rld)

8/16/99 ADDITIONAL CITATION filed by Bradley A. MacLean for Appellant United Foods Inc. Certificate of service date 8/12/99 [98-6436] (yh)

8/30/99 ADDITIONAL CITATION filed by August E. Flentje for Appellees Dept of Agriculture, USA. Certificate of service date [98-6436] (ac)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

9/23/99 CAUSE ARGUED on 9/23/99 by Bradley A. MacLean for Appellant United Foods Inc, August E. Flentje for Appellee Dept of Agriculture, Appellee USA before Judges Merritt, Clay, Aldrich. [98-6436] (me)

10/1/99 ADDITIONAL CITATION filed by August E. Flentje for Appellees Dept of Agriculture, USA. Certificate of service date none but served. [98-6436] (ac)

10/25/99 Appellant RESPONSE filed to appellees' additional citations. Response from Bradley A. MacLean for Appellant United Foods Inc. Certificate of service date 10/22/99. [98-6436] (mcp)

11/23/99 OPINION filed: REVERSED decision for publication pursuant to local rule 206. [98-6436] Gilbert S. Merritt, Authoring Judge, Eric L. Clay, Circuit Judge, Ann Aldrich, District Judge. (ac)

11/23/99 JUDGMENT: REVERSED. (ac)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

12/30/99 Appellee MOTION filed to extend time to file petition for rehearing until 1/21/00. Motion filed by August E. Flentje and Barbara C. Biddle for Appellee Dept of Agriculture, Appellee USA. Certificate of service date 12/29/99. [98-6436] (yh)

1/3/00 RULING granting motion to extend time to file petition for rehearing [2075113-1] filed by August E. Flentje, Barbara C. Biddle. Petition to be filed by 1/21/00 for Barbara C. Biddle [98-6436] (yh)

1/20/00 MOTION filed to allow Amer Mushroom Inst, et al to become an amicus curiae in support of appellees' petition for rehearing en banc. Motion filed by John G. Roberts for Amer Mushroom Inst, et al. Certificate of service date 1/19/00. [98-6436] (blh)

1/20/00 TENDERED: brief of amicus curiae in support of appellees' petition for rehearing en banc from John G. Roberts for Amer Mushroom Inst, et al. [98-6436] (blh)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

1/21/00 PETITION for en banc rehearing filed by August E. Flentje for Appellees Dept of Agriculture, USA. Certificate of service date 1/20/00. [98-6436] (blh)

1/21/00 APPEARANCE filed by Attorney John G. Roberts for Amer Mushroom Inst [98-6436] (blh)

1/27/00 ORDER filed granting motion of The American Mushroom Institute for leave to file a brief in support of appellees' petition for rehearing en banc [2087184-1] filed by John G. Roberts Jr. [98-6436]. Entered by order of the court. (blh)

1/27/00 BRIEF filed by John G. Roberts for Amicus Curiae Amer Mushroom Inst. Copies 25. Certificate of service date 1/19/00 (see certificate attached to motion filed 1/20/00). Number of Pages: 15. [98-6436] (blh)

1/27/00 LETTER SENT by blh to Bradley A. MacLean for Appellant United Foods Inc notifying that party is directed to respond to a petition for en banc rehearing [2087142-1] filed by August E. Flentje and brief of amici curiae filed by John G. Roberts. Response due by 2/10/00. [98-6436]. (blh)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

2/10/00 Appellant MOTION filed to supplement certified record. Motion filed by Bradley A. MacLean for Appellant United Foods Inc. Certificate of service date 2/9/00 [98-6436] (ac)

2/10/00 RESPONSE to a petition for en banc rehearing [2087142-1] filed by August E. Flentje. Response filed by Bradley A. MacLean for Appellant United Foods Inc. Certificate of service date 2/9/00. [98-6436] (blh)

2/22/00 LETTER SENT by ac to Bradley A. MacLean for Appellant United Foods Inc regarding ruling on motion to supplement record on appeal. [98-6436]. (ac)

2/22/00 Appellee RESPONSE in opposition filed regarding a motion to supplement certified record. Response from August E. Flentje for Appellees. Certificate of service date 2/18/2000. [98-6436] (ac)

3/23/00 ORDER filed denying petition for en banc rehearing [2087142-1] filed by August E. Flentje [98-6436]. Gilbert S. Merritt, Eric L. Clay, Circuit Judges; Ann Aldrich, District Judge. (blh)

_________________________________________________

DATE PROCEEDINGS

_________________________________________________

3/30/00 Appellee MOTION filed to stay mandate. Motion filed by August E. Flentje and Barbara C. Biddle for Appellees Dept of Agriculture, USA. Certificate of service date 3/29/00. [98-6436] (ac)

4/5/00 ORDER filed granting motion to stay mandate until 5/15/2000 filed by August E. Flentje, Barbara C. Biddle. [98-6436] Gilbert S. Merritt, Eric L. Clay, Circuit Judges, Ann Aldrich, District Judge. (ac)

5/8/00 Appellee's 2nd MOTION filed to stay mandate until 6/21/2000. Motion filed by August E. Flentje for Appellees Dept of Agriculture, USA. Certificate of service date 5/5/00. [98-6436] (ac)

5/10/00 ORDER filed denying motion to stay mandate until 6/21/00 pending a decision whether to petition for certiorari filed by August E. Flentje. [98-6436] Gilbert S. Merritt, Eric L. Clay, Circuit Judges, Ann Aldrich, District Judge. (ac)

5/17/00 MANDATE ISSUED with no cost taxed [98-6436] (ac)

* * * * *

UNITED STATES DEPARTMENT OF AGRICULTURE BEFORE THE SECRETARY OF AGRICULTURE

MPRCIA Docket No. 96-0001

IN RE: UNITED FOODS, INC., A DELAWARE CORPORATION, D/B/A PICTSWEET MUSHROOM FARMS, PETITIONER

[Filed: Dec 9, 1997]

DECISION AND ORDER OF DISMISSAL

This proceeding was initiated by a Petition filed by United Foods, Inc., on June 25, 1996, alleging that the Mushroom Promotion Research and Consumer Information Act (7 U.S.C. § 6101 et seq.) ("the Act" or "MPRCIA"), and the assessments imposed pursuant to the Act, violate Petitioner's rights guaranteed under the First Amendment of the United States Constitution.

On November 15, 1997, I issued an Order staying this proceeding pending the Supreme Court's resolution of Glickman v. Wileman and/or USDA v. Cal-Almond. On June 25, 1997, the Court entered its decision in Glickman v Willeman, 117 S. Ct. 2130 (1997); and on June 27, 1997, the Court granted certiorari and, vacated the judgment in USDA v. Cal-Almond Inc., and remanded the case to the Ninth Circuit for further consideration is light of Wileman. 117 S. Ct. 2501(1997).

On October 21, 1997, Respondent filed a motion to dismiss the Petition in accordance with the Wileman decision, which held that the use of mandatory assessments for generic advertising did not abridge freedom of speech within the meaning of the First Amendment. On November 14, 1997, Petitioner filed a written opposition to the motion to dismiss. Petitioner maintains that the holding in Wileman is not dispositive of the issues in this proceeding because the MPRCIA is significantly different than the marketing order addressed in Wileman, and because Wileman did not address the freedom of association claims raised by Petitioner in this instant case.

I disagree with Petitioner. I conclude that Wileman is dispositive of the issues herein.

Petitioner contends that the Wileman case is distinguishable because the peach and nectarine marketing orders at issue there regulated other aspects of the market, and did not have promotion as their sole purpose as does the MPRCIA. This distinction has twice been rejected by the United States District Court for the Eastern District of California, in cases involving California table grapes and California cut flowers. In Delano Farms Co. v. California Grape Commission, the Court held that:

[Wileman's] holding is summarized in the first words of the principal dissent: "The Court today finds no First Amendment right to be free of coerced subsidization of commercial speech . . . ." That principle controls. Plaintiff's argument [that] a different result obtains when a program does not regulate fruit size, color, etc., is unconvincing. Were that the case, the state could validate a program merely by adding additional regulatory burdens. Nothing in [Wileman] indicates results should differ in "stand alone" advertising programs.

Delano Farms v. California Grape Comm'n, CV-F-96-6053 OWWDLB, slip op. at 6 (E.D. Cal. Sept. 11, 1997).

In Matsui Nursery, Inc. v. California Cut Flower Comm'n, the Court, as stated during the hearing, held that:

Plaintiff is mistaken in arguing that the California Cut Flower industry is to be distinguished from the more heavily regulated peach and nectarine production industry which the Wileman case considered. The Wileman decision did not turn on the degree to which State or Federal Government has otherwise displaced free market competition. Rather, the Court found that compelled participation in a generic advertising program is itself a form of economic regulation whose efficacy is to be judged by legislatures, Government officials and producers, and not by the Court under its free speech jurisdiction.

Matsui Nursery, Inc., Civ No. S-96-102 EJG/GGH, slip op. at 12-13 (E.D. Cal. Aug. 6, 1997).

Furthermore, in In re Donald B. Mills, Inc., 56 Agric. Dec. ___ (Aug. 27, 1997), the Judicial Officer held that Wileman did extend to the MPRCIA, and that it did preclude the petitioner's First Amendment claims with respect to manadatory assessments for generic advertising. Mills, supra at 44-48.

Petitioner also argues that the Supreme Court, in Wileman, did not sufficiently address the freedom of association issue for the Court's Decision to be binding on that issue. This argument was also rejected in Delano Farms, which held that:

[Wileman] was decided on "First Amendment" grounds and addressed association under a federal marketing order. There is no distinction between speech and association in the "ideologically neutral" context of a generic advertising program.

Delano Farms, supra at 11.

The Judicial Officer also held that neither freedom of association nor freedom of speech are infringed by the MPRCIA. He held:

[T]he requirement under the MPRCIA and the Mushroom Order that Petitioner fund the promotion of fresh mushrooms does not violate Petitioner's rights to freedom of association and speech under the First Amendment to the Constitution of the United States, and Petitioner's rights under the First Amendment are not even implicated by the MPRCIA or the Mushroom Order.

Mills, supra at 48.

Accordingly, the Petition must be dismissed.

ORDER

The Petition is dismissed with prejudice.

This Decision and Order of Dismissal shall become final and effective 35 days after its service upon Petitioner unless within 30 days of its service, Petitioner files an appeal pursuant to 7 C.F.R § 900.65.

/s/ EDWIN S. BERNSTEIN
EDWIN S. BERNSTEIN
Administrative Law Judge

December 9, 1997

UNITED STATES DEPARTMENT OF AGRICULTURE BEFORE THE SECRETARY OF AGRICULTURE

MPRCIA Docket No. 96-0001

IN RE: UNITED FOODS, INC.,
A DELAWARE CORPORATION, D/B/A
PICTSWEET MUSHROOM FARMS, PETITIONER

[Filed: Mar. 4, 1998]

DECISION AND ORDER

I. INTRODUCTION

United Foods, Inc., a Delaware corporation, d/b/a Pictsweet Mushroom Farms [hereinafter Petitioner], instituted this proceeding on June 25, 1996, under the Mushroom Promotion, Research, and Consumer Information Act of 1990, as amended (7 U.S.C. §§ 6101-6112) [hereinafter the MPRCIA]; the Mushroom Promotion, Research, and Consumer Information Order (7 C.F.R. §§ 1209.1-.77) [hereinafter the Mushroom Order]; the Rules and Regulations (7 C.F.R. §§ 1209.200-.280) [hereinafter the Mushroom Regulations]; and the Rules of Practice Governing Proceedings on Petitions To Modify or To Be Exempted From Research, Promotion and Education Programs (7 C.F.R. §§ 900.52(c)(2)-.71, 1200.50-.52) [hereinafter the Rules of Practice], by filing a Petition pursuant to 7 U.S.C. § 6106.

Petitioner alleges that the MPRCIA and assessments pursuant to the MPRCIA violate Petitioner's rights to freedom of association and freedom of speech guaranteed under the First Amendment of the Constitution of the United States (Pet. ¶ 23). Petitioner seeks an exemption from assessments imposed in connection with the Mushroom Order and a refund of any past paid assessments under the Mushroom Order (Pet. ¶ 23).

On July 25, 1996, the Administrator of the Agricultural Marketing Service, United States Department of Agriculture [hereinafter Respondent], filed Answer of Respondent [hereinafter Answer] stating: (1) the Petition fails to state a claim upon which relief can be granted (Answer at 4); and (2) the MPRCIA, the Mushroom Order, and the Mushroom Regulations, as interpreted by Respondent and the Mushroom Council, are constitutional and otherwise fully in accordance with law (Answer at 4).

On November 15, 1996, Administrative Law Judge Edwin S. Bernstein [hereinafter ALJ] stayed the hearing in this proceeding pending action by the Supreme Court of the United States in Cal-Almond, Inc. v. Department of Agric., 14 F.3d 429 (9th Cir. 1993), 67 F.3d 874 (9th Cir. 1995), petition for cert. filed, 65 U.S.L.W. 3052 (U.S. May 20, 1996) (No. 95-1879), and Wileman Bros. & Elliott, Inc. v. Espy, 58 F.3d 1367 (9th Cir. 1995), cert. granted sub nom. Glickman v. Wileman Bros. & Elliott, Inc., 116 S. Ct. 1875 (1996), based on the ALJ's expectation that the Supreme Court of the United States would issue guidance in Wileman Bros. or Cal-Almond, or both Wileman Bros. and Cal-Almond, which might resolve the issue of Petitioner's First Amendment challenge in this proceeding (Summary of Teleconference-Stay Order, filed November 15, 1996).

On June 25, 1997, the Supreme Court of the United States entered its decision in Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), holding that compelled funding of generic advertising of California nectarines, plums, and peaches in accordance with Marketing Order 916 (7 C.F.R. pt. 916) and Marketing Order 917 (7 C.F.R. pt. 917), both of which are issued under the Agricultural Marketing Agreement Act of 1937, as amended [hereinafter AMAA], neither abridge First Amendment rights nor implicate the First Amendment. Moreover, on June 27, 1997, the Supreme Court of the United States granted the petition for a writ of certiorari in Cal-Almond, vacated the judgment of the United States Court of Appeals for the Ninth Circuit, and remanded the case to the United States Court of Appeals for the Ninth Circuit for further consideration in light of Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997). Department of Agric. v. Cal-Almond, Inc., 117 S. Ct. 2501 (1997). On September 4, 1997, the United States Court of Appeals for the Ninth Circuit remanded Cal-Almond "to the district court with instruction to dismiss Cal-Almond's First Amendment claim."

On October 21, 1997, Respondent, relying on, inter alia, Wileman Bros., filed a motion to dismiss Petitioner's Petition (Respondent's Motion to Dismiss), and on November 14, 1997, Petitioner filed Petitioner's Opposition to Respondent's Motion to Dismiss. On December 9, 1997, the ALJ issued Decision and Order of Dismissal [hereinafter Initial Decision and Order] in which the ALJ concluded that Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), is dispositive of the issues in this proceeding and dismissed the Petition with prejudice.

On January 14, 1998, Petitioner appealed to the Judicial Officer to whom the Secretary of Agriculture has delegated authority to act as final deciding officer in the Department's adjudicatory proceedings subject to 5 U.S.C. §§ 556 and 557 (7 C.F.R. § 2.35)1; on February 17, 1998, Respondent filed Respondent's Response to Petitioner's Appeal to the Judicial Officer; and on February 18, 1998, the case was referred to the Judicial Officer for decision.

Based upon a careful consideration of the record in this proceeding, I agree with the ALJ's conclusion that Glickman v. Wileman Bros. & Elliott, Inc., supra, is dispositive of the First Amendment issue in this proceeding and that Petitioner's Petition should be dismissed with prejudice. Therefore, I have adopted the ALJ's Initial Decision and Order as the final decision and order. Additions or changes to the Initial Decision and Order are shown by brackets, deletions are shown by dots, and minor editorial changes are not specified. Additional conclusions by the Judicial Officer follow the ALJ's Initial Decision and Order.

II. APPLICABLE CONSTITUTIONAL, STATUTORY, AND REGULATORY PROVISIONS

[omitted]

III. ALJ'S DECISION AND ORDER OF DISMISSAL (AS MODIFIED)

. . . .

Petitioner contends that [Glickman v. Wileman Bros. & Elliott, Inc., supra,] is distinguishable [from the facts in this proceeding] because the marketing orders at issue [in Wileman Bros.] regulate . . . aspects of the market [that are not regulated under] the MPRCIA. This distinction has twice been rejected by the United States District Court for the Eastern District of California, in cases involving California table grapes and California cut flowers. In Delano Farms Co. v. California Table Grape Commission, the court held that:

[Wileman's] holding is summarized in the first words of the principal dissent: "The Court today finds no First Amendment right to be free of coerced subsidization of commercial speech . . . ." That principle controls. Plaintiff's argument [that] a different result obtains when a program does not regulate fruit size, color, etc. is unconvincing. Were that the case, the state could validate a program merely by adding additional regulatory burdens. Nothing in [Wileman Bros.] indicates results should differ in "stand alone" advertising programs.

Delano Farms Co. v. California Table Grape Comm'n, CV-F-96-6053 OWW DLB, slip op. at 6 (E.D. Cal. Sept. 11, 1997).

In Matsui Nursery, Inc. v. California Cut Flower Commission, the court, as stated during the hearing, held that:

Matsui Nursery, Inc. v. California Cut Flower Comm'n, Civ No. S-96-102 EJG/GGH, slip op. at 12-13 (E.D. Cal. Aug. 4, 1997) (Reporter's Transcript).

Furthermore, in In re Donald B. Mills, Inc., 56 Agric. Dec. ___ (Aug. 27, 1997), appeal docketed, No. CIV F-97-5890 OWW SMS (E.D. Cal. Sept. 17, 1997), the Judicial Officer held that Wileman Bros. did extend to the MPRCIA, and that it did preclude the petitioner's First Amendment claims with respect to mandatory assessments for generic advertising. In re Donald B. Mills, Inc. supra, slip op. at 4[3]-48.

Petitioner also argues that the Supreme Court of the United States, in Wileman Bros., did not sufficiently address the freedom of association issue for the Court's decision to be binding on that issue. This argument was also rejected in Delano Farms, which held that:

[Wileman Bros.] was decided on "First Amendment" grounds and addressed association under a federal marketing order. There is no distinction between speech and association in the "ideologically neutral" context of a generic advertising program.

Delano Farms Co. v. California Table Grape Comm'n, supra, slip op. at 11.

The Judicial Officer also held that neither freedom of association nor freedom of speech are infringed by the MPRCIA. He held:

In re Donald B. Mills, Inc., supra, slip op. at 48.

IV. ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER

Petitioner raises four issues in Petitioner's Appeal to the Secretary [hereinafter Petitioner's Appeal Petition].

A. Motion to Dismiss

First, Petitioner contends:

. . . [A]ll of the facts in the Complaint must be construed in the light most favorable to the Petitioner, consistent with Federal Rules of Civil Procedure Rule 12(c) or Rule 12(b)(6) with respect to motions to dismiss complaints. The dismissal occurred in this case without the benefit of a hearing. "[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

Petitioner's Appeal Petition at 3.

Petitioner's reliance on Rule 12(b)(6) and Rule 12(c) of the Federal Rules of Civil Procedure is misplaced. Rule 1 of the Federal Rules of Civil Procedure provides that the Federal Rules of Civil Procedure govern procedure in the United States district courts, as follows:

Rule 1. Scope and Purpose of Rules

These rules govern the procedure in the United States district courts in all suits of a civil nature whether cognizable as cases at law or equity or in admiralty, with the exceptions stated in Rule 81. They shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.

Fed. R. Civ. P. 1.

The Federal Rules of Civil Procedure are not applicable to administrative proceedings which are conducted before the Secretary of Agriculture, under the MPRCIA, and in accordance with the Rules of Practice (7 C.F.R. §§ 900.52(c)(2)-.71, 1200.50-.52).2 However, I agree with Petitioner's general point that, when considering a motion to dismiss filed in accordance with the Rules of Practice, allegations of material fact in a petition must be construed in the light most favorable to a petitioner.3 However, even if the allegations of material fact in the Petition are construed in the light most favorable to Petitioner, I find that Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), is dispositive of Petitioner's First Amendment claims and that the Petition fails to state a claim upon which relief can be granted. Therefore, I agree with the ALJ's Initial Decision and Order in which he granted Respondent's Motion to Dismiss and dismissed Petitioner's Petition with prejudice.

B. First Amendment

1. Freedom of Speech

Second, Petitioner contends that Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), and Department of Agric. v. Cal-Almond, Inc., 117 S. Ct. 2501 (1997), are not dispositive of Petitioner's First Amendment challenges to compelled assessments to fund the generic promotion program under the MPRCIA (Petitioner's Appeal Petition at 3-7).

The Supreme Court of the United States held in Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), that compelled funding of generic advertising of California nectarines, plums, and peaches in accordance with Marketing Order 916 (7 C.F.R. pt. 916) and Marketing Order 917 (7 C.F.R. pt. 917), both of which are issued under the AMAA, neither abridge First Amendment rights nor implicate the First Amendment.

As Petitioner correctly notes (Petitioner's Appeal Petition at 4), the Court in Wileman Bros. stressed the importance of the statutory context in which the First Amendment issue arises. However, the Court did not limit its holding to marketing orders issued under the AMAA. Instead, the Court held that three characteristics of the regulatory scheme at issue in Wileman Bros. distinguish it from laws that the Court found to abridge the freedom of speech protected by the First Amendment, as follows: (1) the marketing orders impose no restraint on the freedom of any producer to communicate any message to any audience; (2) the marketing orders do not compel any person to engage in any actual or symbolic speech; and (3) the marketing orders do not compel producers to endorse or finance any political or ideological views.

An examination of the MPRCIA, the Mushroom Order, and the Mushroom Regulations reveals that the MPRCIA, the Mushroom Order, and the Mushroom Regulations have the very same three characteristics which the Court found dispositive of the First Amendment issue in Glickman v. Wileman Bros. & Elliott, Inc., supra.4 First, Petitioner is not prohibited or restrained by the MPRCIA, the Mushroom Order, the Mushroom Regulations, or the Mushroom Council from promoting or advertising its brand of mushrooms or from communicating any other message to any audience. Section 501(b)(4)-(5) of the Federal Agriculture Improvement and Reform Act of 1996 specifically provides that neither the MPRCIA, the Mushroom Order, nor the Mushroom Regulations prohibits or restricts any individual advertising or promotion or replaces the individual advertising or promotion efforts of producers or processors (110 Stat. 1030). This factor distinguishes the MPRCIA, the Mushroom Order, and the Mushroom Regulations from cases in which the Supreme Court has found that restrictions on commercial speech violate the right to freedom of speech.5

While the requirement that Petitioner fund generic advertising may reduce the amount of money available to Petitioner to conduct its own advertising or communicate other messages, this incidental effect of the MPRCIA, the Mushroom Order, and the Mushroom Regulations does not amount to a restriction on speech.6

Second, Petitioner is not compelled to speak by either the MPRCIA, the Mushroom Order, or the Mushroom Regulations. This fact distinguishes the MPRCIA, the Mushroom Order, and the Mushroom Regulations from cases in which the Supreme Court has found that compelled speech violates the right to freedom of speech or association.7 While Petitioner is compelled under the MPRCIA, the Mushroom Order, and the Mushroom Regulations to fund promotion of mushrooms, this requirement is not a requirement that Petitioner speak. Petitioner is not publicly identified or publicly associated with the Mushroom Council's promotion program, and Petitioner is not required to respond to the Mushroom Council's promotion program.8

Finally, on the issue of freedom of speech, the Mushroom Council's mushroom promotion program has no political or ideological content, and Petitioner is not compelled by the MPRCIA, the Mushroom Order, or the Mushroom Regulations to endorse or finance any political or ideological views. Section 501(b)(8)(B) of the Federal Agriculture Improvement and Reform Act of 1996 specifically provides that the MPRCIA establishes a program to produce "nonideological and commercial communication the purpose of which is to further the governmental policy and objective of maintaining and expanding . . . markets . . ." (110 Stat. 1031). This fact distinguishes the MPRCIA, the Mushroom Order, and the Mushroom Regulations from cases in which the Supreme Court has found that required financing of political or ideological speech violates the right to freedom of speech.9

I find that Glickman v. Wileman Bros. & Elliott, Inc., supra, is dispositive of the First Amendment issue in this proceeding. The differences between the regulatory scheme in the marketing orders at issue in Wileman Bros. and the regulatory scheme at issue in this proceeding are not relevant to Petitioner's First Amendment challenge to the MPRCIA and the assessments imposed pursuant to the MPRCIA. Thus, the requirement under the MPRCIA, the Mushroom Order, and the Mushroom Regulations that Petitioner fund the promotion of fresh mushrooms does not violate Petitioner's right to freedom of speech under the First Amendment to the Constitution of the United States, and Petitioner's rights under the First Amendment are not even implicated by the MPRCIA, the Mushroom Order, or the Mushroom Regulations.10

2. Freedom of Association

Third, Petitioner contends that Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), does not dispose of Petitioner's claim that the MPRCIA and the assessments imposed pursuant to the MPRCIA violate Petitioner's right to freedom of association guaranteed under the First Amendment of the Constitution of the United States (Petitioner's Appeal Petition at 7-11).

I disagree with Petitioner. The Court in Wileman Bros. addresses freedom of association stating that, in contrast to compelled contributions for collective bargaining where an employee may have ideological, moral, or religious objections to the union's activities, "the collective programs authorized by the marketing order do not, as a general matter, impinge on speech or association rights." Glickman v. Wileman Bros. & Elliott, Inc., supra, 117 S. Ct. at 2140 n.16. The United States District Court for the Eastern District of California, examining the constitutionality of a law permitting the California Table Grape Commission to assess shipped grapes to fund generic advertising of California table grapes, states "[t]he predicate of [Wileman Bros.] is that there is no First Amendment right of association not to be compelled to associate for generic advertising" and that "no compelling purpose is needed . . . to require commercial association." Delano Farms Co. v. California Table Grape Comm'n, supra, slip op. at 11 (emphasis in original).

Moreover, I have previously held, based on Wileman Bros., that freedom of association is not infringed by compelled funding of the generic promotion program under the MPRCIA and the Mushroom Order, as follows:

[T]he requirement under the MPRCIA and the Mushroom Order that Petitioner fund the promotion of fresh mushrooms does not violate Petitioner's right [] to freedom of association . . . under the First Amendment to the Constitution of the United States, and Petitioner's rights under the First Amendment are not even implicated by the MPRCIA or the Mushroom Order.

In re Donald B. Mills, Inc., supra, slip op. at 48.

C. Amendment of Petition

Fourth, Petitioner contends that the ALJ erred by not allowing Petitioner to amend its Petition, as follows:

. . . In Petitioner's Opposition to the Respondent's Motion to Dismiss, at page 11 of that document, United Foods alleged that when it filed its Complaint, it was consistent with the Ninth Circuit decisions in Wileman and Cal-Almond. It was claimed that the U.S. Supreme Court had announced a new "test". Petitioners [sic] sought in that brief to be allowed to amend its Petition to allege factual allegations in light of the Supreme Court Wileman case. The ALJ never addressed the issue. Therefore, the ALJ's decision should be reversed, and United Foods should be given the opportunity to amend its Complaint in light of the Wileman decision. There would be no prejudice to the Respondent.

Petitioner's Appeal Petition at 11 (emphasis in original).

Petitioner states in Petitioner's Opposition to Respondent's Motion to Dismiss, filed November 14, 1997, that Petitioner should be entitled to amend its Petition, as follows:

When Petitioner filed this complaint, it filed it consistent with the Ninth Circuit decisions in Wileman and Cal-Almond. The U.S. Supreme Court has now announced a new "test". Petitioner should be entitled to amend its petition to allege factual allegations in light of Wileman. The rules of practice allow amending petitions. There would be no prejudice to the Respondent.

Petitioner's Opposition to Respondent's Motion to Dismiss at 11.

Section 900.52b of the Rules of Practice (7 C.F.R. § 900.52b) provides for the amendment of pleadings, as follows:

§ 900.52b Amended pleadings.

At any time before the close of the hearing the petition or answer may be amended, but the hearing shall, at the request of the adverse party, be adjourned or recessed for such reasonable time as the judge may determine to be necessary to protect the interests of the parties. Amendments subsequent to the first amendment or subsequent to the filing of an answer may be made only with leave of the judge or with the written consent of the adverse party.

7 C.F.R. § 900.52b.

Further, section 900.59(a)(2) provides that the judge is authorized to rule on all motions and requests, as follows:

§ 900.59 Motions and requests.

(a) General. . . .

(2) The judge is authorized to rule upon all motions and requests filed or made prior to the transmittal by the hearing clerk to the Secretary of the record as provided in this subpart. . . .

7 C.F.R. § 900.59(a)(2).

However, Petitioner's statement (that "Petitioner should be entitled to amend its petition to allege factual allegations in light of Wileman") in Petitioner's Opposition to Respondent's Motion to Dismiss is in the form of a statement, rather than an application or request for a ruling, and I do not find that Petitioner's statement is a motion.11 While the formalities of court practice do not apply to motions filed in administrative proceedings, parties in administrative proceedings have an obligation to identify and frame applications or requests for rulings so that they are recognizable as such by administrative law judges. Petitioner's statement in Petitioner's Opposition to Respondent's Motion to Dismiss is neither identified nor framed as an application for a ruling. I do not find that the ALJ erred by failing to exercise his authority under section 900.59(a)(2) of the Rules of Practice (7 C.F.R. § 900.59(a)(2)) to rule on Petitioner's putative motion for leave to amend its Petition, which putative motion is in the form of a statement rather than an application or request for a ruling.

For the foregoing reasons, the following Order should be issued.

V. Order

The relief requested by Petitioner is denied and the Petition is dismissed with prejudice.

Done at Washington, D.C.
March 4, 1998

/s/ WILLIAM G. JENSON
WILLIAM G. JENSON
Judicial Officer

1 The position of Judicial Officer was established pursuant to the Act of April 4, 1940 (7 U.S.C. §§ 450c-450g); section 4(a) of Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219, 3221 (1953), reprinted in 5 U.S.C. app. § 4(a) at 1491 (1994); and section 212(a)(1) of the Department of Agriculture Reorganization Act of 1994

(7 U.S.C. § 6912(a)(1)).

2 See generally, Morrow v. Department of Agric., 65 F.3d 168 (Table) (per curiam) 1995 WL 523336 (6th Cir. 1995), printed in 54 Agric. Dec. 870 (1995) (stating that neither the Federal Rules of Civil Procedure nor the Federal Rules of Criminal Procedure apply to administrative hearings); Mister Discount Stockbrokers, Inc. v. SEC, 768 F.2d 875, 878 (7th Cir. 1985) (stating that neither the Federal Rules of Civil Procedure nor the Federal Rules of Criminal Procedure apply to administrative hearings); In re Kreider Dairy Farms, Inc., 57 Agric. Dec. ___, slip op. at 12 (Feb. 20, 1998) (Order Denying Pet. for Recons.) (stating that the Federal Rules of Civil Procedure are not applicable to Department proceedings conducted before the Secretary of Agriculture, under the Agricultural Marketing Agreement Act of 1937, as amended, and in accordance with the Rules of Practice Governing Proceedings To Modify or To Be Exempted From Marketing Orders); In re Dean Byard, 56 Agric. Dec. ___, slip op. at 21 (Aug. 8, 1997) (stating that while respondent's reference to the "standard" Rules of Civil Procedure is unclear, no rules of civil procedure govern a proceeding instituted under the Horse Protection Act of 1970, as amended, and the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes); In re Far West Meats, 55 Agric. Dec. 1045, 1055-56 (1996) (Clarification of Ruling on Certified Questions) (stating that the Federal Rules of Civil Procedure are not applicable to Department proceedings conducted under the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes); In re Far West Meats, 55 Agric. Dec. 1033, 1039-40 (1996) (Ruling on Certified Questions) (stating that the Federal Rules of Civil Procedure are not applicable to Department proceedings conducted under the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes); In re James Joseph Hickey, Jr., 53 Agric. Dec. 1087, 1096-99 (1994) (stating the Federal Rules of Civil Procedure are not applicable to the Department's disciplinary proceedings conducted in accordance with the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes), aff'd, 878 F.2d 385, 1989 WL 71462 (9th Cir. 1989) (not to be cited as precedent under 9th Circuit Rule 36-3), printed in 48 Agric. Dec. 107 (1989); In re Shasta Livestock Auction Yard, Inc., 48 Agric. Dec. 491, 504 n.5 (1989) (holding the Federal Rules of Civil Procedure are not followed in proceedings before the Department of Agriculture).

3 In re Midway Farms, Inc., 56 Agric. Dec. 102, 113-14 (1997) (stating that allegations of material fact in a petition must be construed in the light most favorable to a petitioner claiming handler status when considering a motion to dismiss filed pursuant to

7 C.F.R. § 900.52(c)); In re Asakawa Farms, Inc., 50 Agric. Dec. 1144, 1149 (1991) (stating that allegations of material fact in a petition must be construed in the light most favorable to a petitioner claiming handler status when considering a motion to dismiss for want of standing filed pursuant to 7 C.F.R. § 900.52(c)), dismissed, No. CV-F-91-686-OWW (E.D. Cal. Sept. 28, 1993).

4 In re Donald B. Mills, Inc., 56 Agric. Dec. ___, slip op. at 43-44 (Aug. 27, 1997), appeal docketed, No. CIV F-97-5890 OWW SMS (E.D. Cal. Sept. 17, 1997).

5 See 44 Liquormart, Inc. v. Rhode Island, 116 S. Ct. 1495 (1996) (holding that a state statute which bans price advertising for alcoholic beverages abridges speech in violation of the First Amendment as made applicable to the states by the Fourteenth Amendment); Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557 (1980) (holding that a New York Public Service Commission ban on advertising by an electric utility to promote the use of electricity violates the First and Fourteenth Amendments); Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976) (holding that a state statute which bans the advertising of prescription drug prices violates the First and Fourteenth Amendments).

6 In re Donald B. Mills, Inc., 56 Agric. Dec. ___, slip op. at 45 (Aug. 27, 1997), appeal docketed, No. CIV F-97- 5890 OWW SMS (E.D. Cal. Sept. 17, 1997) (stating that while the requirement that petitioner fund generic advertising may reduce the amount of money available to petitioner to conduct its own advertising or communicate other messages, this incidental effect of the MPRCIA and the Mushroom Order does not amount to a restriction on speech). See also Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130, 2138-39 (1997) (stating that the First Amendment has never been construed to require heightened scrutiny of any financial burden that has the incidental effect of constraining the size of a firm's advertising budget and the fact that an economic regulation may indirectly lead to a reduction in an individual advertising budget does not itself amount to a restriction on speech); In re Cal-Almond, Inc., 56 Agric. Dec. ___, slip op. at 86-87 (Dec. 24, 1997) (stating that while the requirement that petitioners fund generic advertising may reduce the amount of money available to petitioners to conduct their own advertising or communicate other messages, this incidental effect of the AMAA and the Almond Order does not amount to a restriction on speech); In re Jerry Goetz, 56 Agric. Dec. ___, slip op. at 33 (Nov. 3, 1997) (stating that even if the requirements of the Beef Promotion and Research Act of 1985 (7 U.S.C. §§ 2901-2911), the Beef Promotion and Research Order (7 C.F.R. §§ 1260.101-.217), and the Rules and Regulations (7 C.F.R. §§ 1260.301-.316) did reduce resources available to respondent to engage in his own speech, this incidental effect would not amount to a restriction on speech).

7 See Hurley v. Irish-American Gay, Lesbian & Bisexual Group of Boston, 515 U.S. 557 (1995) (holding that requiring private citizens who organize a parade to include a group which imparts a message that organizers do not wish to convey violates the First Amendment); Riley v. National Federation of the Blind of North Carolina, 487 U.S. 781 (1988) (holding that a state statute requiring professional fund raisers to disclose to potential donors the percentage of charitable contributions collected that were turned over to the charity mandates speech in violation of the First Amendment); Wooley v. Maynard, 430 U.S. 705 (1977) (holding that a state statute requiring an individual to display an ideological message on his or her private property violates the First Amendment); West Virginia State Bd. of Educ. v. Barnette, 319 U.S. 624 (1943) (holding that action of a state making it compulsory for children in public schools to salute the flag and pledge allegiance to the flag and the republic for which the flag stands violates the First and Fourteenth Amendments).

8 In re Donald B. Mills, Inc., 56 Agric. Dec. ___, slip op. at 46 (Aug. 27, 1997), appeal docketed, No. CIV F-97- 5890 OWW SMS (E.D. Cal. Sept. 17, 1997).

9 See Keller v. State Bar of California, 496 U.S. 1 (1990) (holding that a state bar's use of compulsory dues paid by attorneys to finance political or ideological activities with which the attorneys disagree violates the attorneys' First Amendment right of free speech when such expenditures are not necessarily or reasonably incurred for the purpose of regulating the legal profession or improving the quality of legal services); Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977) (holding that a union's use of compulsory service charges paid by public school teachers to finance ideological causes with which the teachers disagree violates the teachers' First Amendment right to freedom of speech when such expenditures are not germane to the union's duties as a collective bargaining representative).

10 In re Donald B. Mills, Inc., 56 Agric. Dec. ___, slip op. at 48 (Aug. 27, 1997), appeal docketed, No. CIV F-97-5890 OWW SMS (E.D. Cal. Sept. 17, 1997).

11 Black's Law Dictionary 1013 (6th ed. 1990) defines the word motion as follows:

Motion. . . .

An application made to a court or judge for purpose of obtaining a rule or order directing some act to be done in favor of the applicant. . . .

See generally United States v. Brick, 905 F.2d 1092, 1098-99 (7th Cir. 1990) (concluding that statements made by the government to the court, including the statement that defendant's cooperation should be considered, do not satisfy the motion requirement under section 5K1.1 of the Sentencing Guidelines); United States v. Coleman, 895 F.2d 501, 505 (8th Cir. 1990) (stating that letters from the government informing the court of defendant's cooperation, although the functional equivalent of a motion, do not satisfy the motion requirement of 18 U.S.C. § 3553(e)); St. Paul Fire & Marine Ins. Co. v. Continental Casualty Co., 684 F.2d 691, 693 (10th Cir. 1982) (stating that St. Paul's "Objections to Proposed Order" is technically not a motion because it is in the form of a statement rather than an application or request for an order and does not set forth the relief or order sought); In re Marriage of Houtchens, 592 P.2d 158, 161 (Mont. 1979) (stating that in construing the civil rule on form motions, this court has frequently stated that a motion is an application for an order); State ex rel. Gage v. District Court of the Second Judicial District, 419 P.2d 746, 748 (Mont. 1966) (stating that a motion is an application for an order); State v. Wise, 419 P.2d 342, 344 (Ariz. 1966) (stating that the purpose of a motion is to obtain a ruling or an order directing that some act be done in favor of the applicant, and it should call to the attention of the court the particular purpose sought to be achieved, so that the court be given an opportunity to rule on the matter); Williams v. Denning, 133 S.E.2d 150, 151 (N.C. 1963) (per curiam) (stating that, under G.S. § 1-578, a motion is an application for an order); State v. James, 347 S.W.2d 211, 216 (Mo. 1961) (stating that a motion is an application made to a court or judge for the purpose of obtaining a ruling or order directing some act be done in favor of the applicant); McClinton v. Rice, 265 P.2d 425, 428 (Ariz. 1953) (stating that the purpose of a motion is to obtain a ruling or an order directing that some act be done in favor of the applicant, and the essentials of a motion are that the attention of the court must be called to the particular matter or request, and that the court be given an opportunity to rule as to the matter); State ex rel. McVay v. District Court of Fourth Judicial District, 251 P.2d 840, 845 (Mont. 1952) (stating that, under R.C.M. 1947, s 93-8401, a motion is an application for an order); Iveson v. Second Judicial District Court, 206 P.2d 755, 759 (Nev. 1949) (stating that a motion is a proceeding directed to a court's authority to act on a given subject; a motion is an application for an order); People v. Hornaday, 81 N.E.2d 168, 170 (Ill. 1948) (stating that a motion is an application to the court); Paramount Publix Corp. v. Boucher, 19 P.2d 223, 225 (Mont. 1933) (stating that a motion is merely "an application for an order" (section 9772, Rev. Codes 1921)); Brown v. Caldwell, 16 P.2d 139, 141 (Cal. 1932) (concluding that a statement of respondent's counsel that he intended to ask for an instructed verdict was not a motion for an instructed verdict; a motion is an application for an order (section 1003, Code of Civil Procedure), and counsel's statement of what he intended to do was not an application for an order); People v. Brickey, 178 N.E. 483, 484 (Ill. 1931) (stating that a motion is an application to the court); Harris v. Chicago House-Wrecking Co., 145 N.E. 666, 669 (Ill. 1924) (stating that a motion is an application made to a court for a rule or order); Genardini v. Kline, 190 P. 568, 570 (Ariz. 1920) (stating that a motion is an application made to a judge or the court for the purpose of obtaining a rule or order directing some act to be done in favor of the applicant); State v. Warner Valley Stock Co., 137 P. 746, 747 (Or. 1914) (stating that in legal proceedings a motion is an application by a party to an action or suit for some kind of relief, that a motion should state what relief the mover desires and the reasons or grounds for asking for the relief, and that it is the duty of the party who asks for relief by motion to point out specifically what he desires); Hammer v. Campbell Automatic Safety Gas Burner Co., 144 P. 396, 398 (Or. 1914) (stating that a motion is an application to the court for relief of some kind and it should state what relief is desired, and usually, it should state the grounds for asking for the relief demanded); Taylor v. Woodbury, 120 P. 367 (Kan. 1912) (stating that under Kansas civil code a motion is defined as an application for an order addressed to the court or a judge in vacation); Brownell v. Superior Court of Yolo County, 109 P. 91, 94 (Cal. 1910) (stating that a motion is an application for an order); Arnold v. Regan, 69 A. 292 (R.I. 1908) (per curiam) (stating that a motion is a request to the court to grant the mover some right to which he claims); Williams v. Hawley, 77 P. 762, 763 (Cal. 1904) (stating that a motion is an application for an order); Reid v. Fillmore, 73 P. 849, 850 (Wyo. 1903) (stating, by our Code of Civil Procedure, a motion is defined to be "an application for an order addressed to a court or judge by a party to a suit or proceeding, or one interested therein"); McGuire v. Drew, 23 P. 312, 314 (Cal. 1890) (stating that, under section 1003 of the Code of Civil Procedure, an application for an order is a motion).

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION

Civil Action No. 1-96-1252

UNITED STATES OF AMERICA, PLAINTIFF

UNITED FOODS, INC., DEFENDANT

COMPLAINT

The United States of America brings this civil action under the provision of the Mushroom Promotion, Research, and Consumer Information Act of 1990, as amended (hereinafter referred to as "the Act"), 7 U.S.C. 6107(a), vesting the several District Courts of the United States with jurisdiction specifically to en-force, and to prevent and restrain any person from violating, any order or regulation issued by the Secretary of Agriculture under the authority contained in the Act, and alleges as follows:

1. Jurisdiction is conferred on this Court by 7 U.S.C. 6107(a)

2. Venue lies in this Court pursuant to 28 U.S.C.

§ 1391 (b) and (c), inasmuch as the defendant resides and has its offices and principal place of business in this judicial district.

3. The plaintiff is the United States of America, initiating this action as authorized under 7 U.S.C. 6107.

4. The defendant United Foods, Inc., is a corporation organized and existing under the laws of the State of Delaware, and doing business as Pictsweet Mushroom Farms. Its offices and principal place of business are located at 10 Pictsweet Drive, Bells, Tennessee 38006-0119, within the Western District of Tennessee.

5. This action is brought to enforce the provisions of the Act and the Mushroom Promotion, Research, and Consumer Information Order (hereinafter "the Order"), 7 C.F.R. 1209.1-1209.77, and the regulations thereunder, 7 C.F.R. 1209.200-1209.280, issued pursuant to the provisions of the Act.

6. The Order and regulations are administered by the Mushroom Council, which is composed of mushroom producers and importers appointed by the Secretary of Agriculture, and whose function is to conduct the day to day operations set forth in the Act, Order and regulations. 7 U.S.C. 6102(3), 6104(b) and 7 C.F.R. 1209.4, 1209.30-.35 (establishing the Mushroom Council); 7 U.S.C. 6104(c)-(f), 7 C.F.R. 1209.38-.50 (powers and duties of the Mushroom Council).

7. As part of its duties, the Mushroom Council develops, recommends to the Secretary of Agriculture for approval, and administers projects for mushroom promotion, research, consumer information and industry information. 7 U.S.C. 6104(c)(4), 6101 (b); 7 C.F.R. 1209.38 (a), (b), (c), (j), 1209.39 (b), (1), 1209.40.

8. Funds for both these projects and the administrative expenses of the Mushroom Council are generated by levying assessments on producers and importers of mushrooms based on the poundage of mushrooms marketed for fresh use in the United States. 7 U.S.C. 6101(b), 6104(g)(1), (3) and 7 C.F.R. 1209.50(b), 1209.51. First handlers of domestically produced mushrooms are required to collect and remit the assessments levied on their producers and levied on their own production. 7 U.S.C. 6102 (5), 6104 (g) (1), (3); 7 C.F.R. 1209.51(a), (c), 1209.251 (a), (b) .

9. Pursuant to 7 U.S.C. 6104 and 7 C.F.R. 1209.50(a) (1), the Mushroom Council annually recommends to the Secretary of Agriculture a budget for its projects and administrative expenses and a proposed rate of assessment to fund that budget.

10. After approval by the Secretary of Agriculture, and in accord with the limits in 7 U.S.C. 6104(g)(2), an assessment rate of $.0045 per pound was duly adopted for mushrooms produced or imported after February 1, 1996.

11. Pursuant to the Act, Order, and regulations, first handlers, including marketing producers, are also required to file monthly reports detailing, inter alia, the number of pounds of assessable mushrooms and the amount of assessments remitted. 7 U.S.C. 6104(i)(1); 7 C.F.R. 1209.60, 1209.260.

12. At least since the inception of reporting and assessment collection under the Act and Order on August 1, 1993, defendant United Foods, Inc., doing business as Pictsweet Mushroom Farms, has been and is a producer and first handler of mushrooms subject to assessments and monthly reporting under the Act, Order and regulations.

13. Defendant United Foods, Inc., has not filed monthly reports or remitted assessments due for May and June 1996, and has advised the Mushroom Council that it does not intend to file any further reports or remit assessments. Based on the average of its unaudited first handler reports for the previous twelve months, it is estimated that the amount of assessments due is at least $8,000 per month, exclusive of interest.

14. Defendant United Foods, Inc., is violating the Act, Order, and regulations by failing and refusing to file first handler reports and pay assessments when due and will continue to do so until appropriate relief is granted pursuant to 7 U.S.C. 6107(a) .

15. Defendant's failure to file first handler reports and pay its assessments has caused and will cause injury and irreparable harm to the operation of the Order and is detrimental to the public interest. Defendant's violations of the Act and the Order threaten the entire scheme of the Order, by causing unfairness to those producers and first handlers who are in compliance with the order and by encouraging wider noncompliance with that Order.

WHEREFORE, the United States respectfully requests that this Court:

1. Issue both temporary and permanent mandatory injunctions commanding the defendant, its officers, agents, employees, successors, assigns and all other persons in concert or participation with it to comply fully with the Act and all provisions of the Order and the regulations thereunder, now in effect and as they subsequently may be amended, and particularly to:

(a) File forthwith with the Mushroom Council all first handler reports now due;

(b) Pay forthwith to the Mushroom Council all assessment obligations now due, including late payment charges and interest thereon pursuant to 7 C.F.R. 1209.51(g) and 1209.251 (e), (f); and

(c) File with the Mushroom Council all future first handler reports and pay to the Mushroom Council all future assessment obligations when due, including those which accrue during the pendency of this action, pursuant to the provisions of the Act, the Order, and the regulations issued thereunder.

2. Issue both temporary and permanent mandatory injunctions preventing and restraining the defendant, its officers, agents, employees, successors, assigns and all other persons in concert or participation with it from violating the Act and all provisions of the Order and the regulations thereunder now in effect and as they subsequently may be amended.

3. Retain jurisdiction of this action for the purposes of entering such other, further and different orders and judgments as may be necessary in order to give full relief herein.

4. Grant plaintiff its cost of this action.

Respectfully submitted,

VERONICA F. COLEMAN
United States Attorney

/s/ BRIAN J. QUARLES
BRIAN J. QUARLES
Assistant United States Attorney
Suite 800, 167 North Main Street
Memphis, Tennessee 38103-1898
(901) 544-4231
(Tennessee BPR# 17142)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION

CIVIL ACTION NO. 1-98-1082

UNITED FOODS, INC., PLAINTIFF

UNITED STATES OF AMERICA, THE UNITED STATES
DEPARTMENT OF AGRICULTURE, DEFENDANT

[Filed: Mar 23, 1998]

COMPLAINT FOR REVIEW OF AGENCY ACTION
AND FOR DECLARATORY RELIEF

United Foods, Inc. ("United Foods"), for its Complaint against the United States of America, The United States Department of Agriculture (the "U.S.D.A."), states as follows:

PARTIES

1. United Foods is a corporation organized and existing under the laws of the State of Delaware. Since 1987, United Foods has been and is a producer and first handler of mushrooms doing business as Pictsweet Mushroom Farms. United Foods' offices and principal place of business are located in Bells, Tennessee, within the Western District of Tennessee.

2. The U.S.D.A. is the agency in charge of the Mushroom Promotion, Research and Consumer Information Act of 1990, as amended, 7 U.S.C. §§ 6101-6112 (hereinafter the "Mushroom Law").

NATURE OF THIS ACTION

3. On June 25, 1996, United Foods filed with the U.S.D.A. a petition under the Mushroom Law, pursuant to 7 U.S.C. § 6106(a), alleging that the Mushroom Law and assessments pursuant to the Mushroom Law violate United Foods' rights to freedom of speech and freedom of association guaranteed under the First Amendment of the Constitution of the United States and United Foods' right to equal protection under the Fifth Amendment to the Constitution.

4. On March 4, 1998, the U.S.D.A. entered a Decision and Order denying the relief requested by United Foods and dismissing United Foods' petition.

5. United Foods is bringing this action pursuant to 7 U.S.C. § 6106(b). In this action, United Foods is challenging and is requesting this Court to review the Decision and Order by the U.S.D.A.

JURISDICTION AND VENUE

6. This Court has jurisdiction pursuant to 7 U.S.C. § 6106(b) of the Mushroom Law, which authorizes the District Court to review any decision by the Secretary of the U.S.D.A. following the Secretary's decision on a petition filed pursuant to 7 U.S.C. § 6106(a). This Court also has jurisdiction pursuant to 5 U.S.C. §§ 702 through 706 which provides jurisdiction to the District Courts to review agency actions.

7. This Court also has jurisdiction pursuant to 28 U.S. C. §§ 2201 and 2202 in order to declare the rights and obligations of United Foods and the U.S.D.A. in administrative proceedings brought pursuant to 7 U.S.C. § 6106.

8. Venue is appropriate in this District because United Foods does business within this District. 7 U.S.C. § 6106(b)(1).

FACTUAL BACKGROUND

9. United Foods began approximately fifty years ago processing and selling frozen foods. United Foods processes, markets and distributes a full line of frozen vegetables.

10. Pictsweet Mushroom Farms, a division of United Foods, began in 1987 to engage in the business of producing fresh mushrooms. Pictsweet Mushroom Farms is structured as three separate business units, with a mushroom farm in Ventura, California, one in Salem, Oregon, and one in Fillmore, Utah.

11. Through its Pictsweet division, United Foods grows, markets and distributes more than 500,000 pounds of fresh mushrooms per year. United Foods sells mushrooms in the retail, wholesale and food service channels of trade.

12. Growing, marketing and distributing fresh mushrooms is a service-oriented business.

13. Fresh mushrooms are not sold in a geographic market that is nationwide in scope. Because fresh mushrooms have a short shelf life and are light weight, fresh mushrooms cannot be efficiently transported long distances. Consequently, fresh mushroom producers such as United Foods must sell their mushrooms within relatively small geographic regions surrounding the mushroom farms where the mushrooms are produced. In these respects, fresh mushrooms are unique as compared to most other agricultural products.

14. Because of the nature of the fresh mushroom industry and the location of United Foods' mushroom farms, United Foods sells its mushrooms in three separate regional markets: (i) Southern California and Arizona; (i) [sic] the Pacific Northwest; and (iii) the Central Rocky Mountain States.

15. The regional markets for fresh mushrooms are self-contained. The supply of fresh mushrooms in a regional market, and the market prices for those mushrooms, are determined primarily by factors that exist within that regional market. Supply and market prices for fresh mushrooms within a regional market are less affected by producers or other factors that exist outside that regional market.

16. Within each regional market for fresh mushrooms, market prices are sensitive to the quantity of fresh mushrooms that are produced in that market. In turn, as prices increase, the quantity of fresh mushrooms that are produced in that market will increase, such that prices will stabilize through the operation of natural market forces. Producers in most regional markets have the capacity to increase or decrease production within a relatively short period of time, approximately three (3) months, to respond to changes in market price.

17. Fresh mushrooms are not a homogenous product: there are different varieties of fresh mushrooms; different producers offer different kinds and levels of service in connection with the marketing of their fresh mushrooms; different producers use different kinds and styles of packaging for their fresh mushrooms; and the quality of fresh mushrooms sold by different producers is different.

18. The primary customers of United Foods and other producers of fresh mushrooms are retail grocery outlets. In the regional markets where United Foods sells its fresh mushrooms, the retail grocery industry has been rapidly consolidating into a smaller number of larger grocery chains; and, therefore, the total number of United Foods' customers within its fresh mushroom markets has become smaller.

19. United Foods, like other fresh mushroom producers, engages in independent marketing activities, at its own expense, that are geared towards the regional markets in which it sells its product. Because of the regional nature of the industry, fresh mushroom producers do not independently engage in nationwide marketing activities.

20. To be successful, marketing efforts by United Foods or other fresh mushroom producers must accomplish at least two objectives. First, the fresh mushroom producer must establish favorable relationships with the grocery stores in the region, and together the fresh mushroom producer and the grocery store must develop customized marketing programs that are geared to the customer demands in the region and the unique qualities of the fresh mushrooms sold by the producer. Second, the fresh mushroom producer must advertise the distinguishing characteristics of the fresh mushrooms which it produces.

21. In 1990 Congress enacted the Mushroom Law, 7 U.S.C. §§ 6101-6112. Pursuant to the Mushroom Law, the U.S.D.A. promulgated the Mushroom Promotion, Research, and Consumer Information Order at 7 C.F.R. §§ 1209.200-.280 (hereinafter, the "Mushroom Order").

22. The Mushroom Order provides for the formation of a Mushroom Council, which is a committee of competitors of United Foods appointed by the Secretary of Agriculture. The Mushroom Council exists to develop industry-wide (i.e. nationwide) promotion, research and consumer information programs for mushrooms, ostensibly to stimulate the demand for fresh mushrooms. See 7 U.S.C. § 6104(c)(4), 6101(b); 7 C.F.R. § 1209.38(a), (b), (c), (j), (1), 1209.40. These are "generic" promotional programs in that they do not recognize the distinguishing characteristics of the different mushrooms and related services offered by the different mushroom producers. These programs also fail to recognize that mushroom markets are regional in nature, and that the effectiveness of different kinds of marketing and promotional techniques will depend upon the types and quality of the mushrooms and services being offered and the regions in which the mushrooms and services are being sold.

23. Funds for the generic promotional and advertising programs developed by the Mushroom Council are generated by levying assessments on larger mushroom producers and importers of mushrooms, based upon the poundage of mushrooms marketed for fresh use in the United States. 7 U.S.C. § 6101(b), 6104(g)(1), (3); 7 C.F.R. § 1209.50(b), 1209.51. Because United Foods produces and sells more than 500,000 pounds of fresh mushrooms per year, United Foods is subject to the assessments of the Mushroom Council.

24. The Mushroom Law contains "free-rider" provisions which exempt certain groups of mushroom producers from assessments for financing the Mushroom Council programs. These provisions permit the exempt mushroom producers to "free-ride" on the purported benefits of the promotional and advertising programs. For example, by definition, the Mushroom Law excludes assessments for the mushroom producer who sells less than 500,000 pounds of fresh mushrooms per year in the domestic market, 7 U.S.C. § 6102(11), or for producers who sell their product in the processed forms, including marinated, canned, frozen, cooked, blanched, dried, or "otherwise processed" forms. 7 U.S.C. § 6102(9). The Mushroom Law also exempts from assessments mushrooms produced in the United States that are sold in the export market. 7 U.S.C. § 6104(g)(4).

25. The generic promotional and advertising programs developed by the Mushroom Council have had no discernable effect on the different fresh mushroom markets in the United States or on consumer demand for fresh mushrooms. There are several reasons for this. Among other things: the funds generated through assessments are inadequate to promote fresh mushrooms on a nation-wide scale; nation-wide advertising and promotional program will be incapable of materially influencing consumer demand in the various unique regional markets that exist for fresh mushrooms; the Mushroom Council programs cannot assist producers like United Foods in providing better quality of product or service to customers, which is necessary to any successful marketing program; the Mushroom Council programs are incapable of distinguishing the fresh mushrooms and services offered by the different producers, which is also essential to any successful marketing program; and the Mushroom Council programs, by definition, cannot regulate the regional markets for fresh mushrooms.

26. United Foods is opposed to the general content of the Mushroom Council's programs. The Mushroom Council's programs portray fresh mushrooms as a homogenous product, which is not true. By portraying fresh mushrooms in this manner, the Mushroom Council delivers a message to the general public which is contrary to the message United Foods attempts to deliver to its customers in its regional markets. United Foods, in its marketing programs, attempts to portray its fresh mushroom products as unique, which they are. The content of the Mushroom Council's programs, therefore, runs contrary to the interests of United Foods.

27. United Foods has also objected to the specific content of certain of the Mushroom Council's programs. For example, United Foods objected to the Mushroom Council's portrayal of mushrooms as an aphrodisiac, which United Foods felt was inaccurate and inappropriate.

28. The Mushroom Law deals only with the advertising and promotion of mushrooms. The Mushroom Law does not purport to regulate the mushroom industry. For example, the Mushroom Law does not regulate price, size, pack, maturity, production levels, quotas, reserves, or any other matters that are designed to restrict competition and/or stabilize markets or prices. Rather, the Mushroom Law exists only for the purpose of compelling certain mushroom producers and handlers to fund advertising and promotional activities of the Mushroom Council.

29. The Mushroom Law does not serve a legitimate governmental interest.

30. The Mushroom Law and the Mushroom Order violate United Foods' right to freedom of speech under the First Amendment of the United States Constitution, in that the Mushroom Order wrongfully compels United Foods to fund the speech of the Mushroom Council. This speech is objectionable to United Foods, this speech is contrary to the interests of United Foods, and this speech neither serves nor is ancillary to any legitimate economic or other governmental purpose.

31. The Mushroom Law and the Mushroom Order violate United Foods' right to freedom of association under the First Amendment of the United States Constitution, in that the Mushroom Order wrongfully compels United Foods to associate with the Mushroom Council and the other mushroom producers represented by the Mushroom Council.

32. The Mushroom Law and the Mushroom Order violate United Foods' right to equal protection under the Fifth Amendment of the United States Constitution, in that certain mushroom producers are exempted from assessments to fund the advertising and promotional activities of the Mushroom Council, and there is no rational basis for the discriminatory treatment of the different classes of mushroom producers provided for under the Mushroom Law.

PROCEDURAL AND LEGAL BACKGROUND

33. On June 25, 1996, United Foods filed with the U.S.D.A. its administrative petition (MPRCIA Docket No. 96-001) challenging the constitutionality of the Mushroom Law and the Mushroom Order.

34. On November 15, 1996, the Administrative Law Judge who was assigned to the case stayed the administrative proceeding because of the pending action by the United States Supreme Court in Cal-Almond, Inc. v. Department of Agric., 14 F.3d 429 (9th Cir. 1993), 67 F.3d 874 (9th Cir. 1995), and Wileman Bros. & Elliott, Inc. v. Espy. Inc., 58 F.3d 1367 (9th Cir. 1995), cert. granted sub nom., Glickman v. Wileman Bros. & Elliott, Inc., 116 S.Ct. 1875 (1996).

35. On June 25, 1997, the Supreme Court entered its decision in Glickman v. Wileman Bros. & Elliott, Inc., 117 S.Ct. 2130 (1997), reh'd denied, 118 S.Ct. 25 (1997). The Supreme Court, in a 5 to 4 opinion, reversed the Ninth Circuit and held that compelled funding of generic advertising of California nectarines, plums, and peaches in accordance with certain Marketing Orders issued under the Agricultural Marketing Agreement Act of 1937 (the AMAA) was not unconstitutional.

36. On December 9, 1997, the Administrative Law Judge in United Foods' administrative proceeding issued a Decision and Order of Dismissal which concluded that Wileman Bros., supra, was dispositive of the issues raised by United Foods in that proceeding.

37. On January 14, 1998, United Foods appealed the Administrative Law Judge's decision to the Judicial Officer to whom the Secretary of Agriculture has delegated authority to act as final deciding officer in the Department's adjudicatory proceedings subject to 5 U.S.C. §§ 556 and 557 (7 C.F.R. § 2.35).

38. On March 4, 1998, the Judicial Officer issued a Decision and Order affirming the decision of the Administrative Law Judge. It is this Decision and Order which United Foods is hereby challenging and asking this Court to review.

39. Contrary to the ruling by the Judicial Officer in the U.S.D.A. administrative proceeding, Wileman Bros., supra, is not dispositive of the constitutional claims asserted by United Foods, for the following reasons:

(1) The First Amendment issue in Wileman Bros. arose in the context of a detailed regulatory scheme that restricts competition among California nectarine and peach growers in order to maintain stable marketing conditions for those agricultural products. 117 S.Ct. at 2134-35. The Court in Wileman Bros. held, essentially, that generic advertising provisions that are ancillary to a broad and detailed marketing scheme designed to stabilize markets are not subject to traditional First Amendment analysis. The Court noted that the regulatory scheme in Wileman Bros. has many collectivist goals unrelated to advertising, and generic advertising in the context of that regulatory scheme is constitutionally justified because it serves the collectivist goals of the regulatory scheme.

(2) The First Amendment issues in United Foods' case, on the other hand, do not arise in the context of such a regulatory scheme. The Mushroom Law is free standing legislation with no regulatory intent except to collect assessments for promotion, advertising, and research. The Mushroom Law does not purport to restrict competition or to regulate the mushroom market. The Supreme Court in Wileman Bros. did not address the constitutionality of the kinds of compelled advertising and promotional activities that are at issue in United Foods' case.

(3) This distinction is central to the holding in Wileman Bros. The Supreme Court majority in Wileman Bros. made clear that its decision must be understood in the context of the statutory scheme in which the First Amendment issue arose in that case. The majority opinion said:

The legal question that we address is whether being compelled to fund this advertising raises a First Amendment issue for us to resolve, or rather is simply a question of economic policy for Congress and the Executive to resolve.

In answering that question we stress the importance of the statutory context in which it arises. California nectarines and peaches are marketed pursuant to detailed marketing orders that have displaced many aspects of independent business activity that characterize other portions of the economy in which competition is fully protected by the antitrust laws. The business entities that are compelled to fund the generic advertising at issue in this litigation do so as part of a broader collective enterprise in which their freedom to act independently is already constrained by the regulatory scheme. It is in this context that we consider whether we should review the assessments used to fund collective advertising, together with other collective activities, under the standard appropriate for the review of economic regulation or under a heightened standard appropriate for the review of First Amendment issues.

117 S. Ct. at 2138 (emphasis added). Later in the decision the Court said:

Generic advertising is intended to stimulate consumer demand for an agricultural product in a regulated market. That purpose is legitimate and consistent with the regulatory goals of the overall statutory scheme.

Id. at 2141 (emphasis added). And towards the end of its opinion, the majority said:

In sum, what we are reviewing is a species of economic regulation that should enjoy the same strong presumption of validity that we accord to other policy judgments.

Id. at 2142.

(4) The regulatory scheme at issue in Wileman Bros. was a "marketing order" promulgated under the Agricultural Marketing Agreement Act of 1937 (AMAA), 7 U.S.C. § 601 et seq.. As the Court explained, "Marketing orders promulgated pursuant to the AMAA are a species of economic regulation that has displaced competition in a number of discrete markets; . . ." Id. at 2134. The purpose of these marketing orders is to regulate and limit competition in order "to establish and maintain such orderly marketing conditions for [certain agricultural commodities] . . . as will provide . . . an orderly flow of the supply thereof to market throughout its normal marketing season to avoid unreasonable fluctuations in supplies and prices." 7 U.S.C. § 602(4). These marketing orders may impose uniform prices in a particular market, limitations on the quality and quantity of the commodity that may be marketed, determinations of grade and size of the commodity, and orderly disposition of any surplus that might suppress market prices. These marketing orders may also authorize joint research and development projects, inspection procedures, and standardized packaging requirements. Id.. See, e.g., 7 U.S.C. § § 602(4) and 60c(6) .

(5) Because the generic advertising provisions at issue in Wileman Bros. were contained within a broad and detailed regulatory scheme that restricted competition and required collective action in order to stabilize markets, the Court held that the Central Hudson test applied by the Ninth Circuit was inappropriate. "The Court of Appeals' decision to apply the Central Hudson test is inconsistent with the very nature and purpose of the collective action program at issue here." Id. at 2141.

(6) By contrast, the Mushroom Law in United Foods' case was not promulgated under the AMAA. Rather, it was promulgated pursuant to an entirely different statute, the "Mushroom Act" set forth in 7 U.S.C. § 6101 et seq. The purpose of the "Mushroom Act" has nothing to do with regulating markets by restricting competition and requiring collective action in the production, distribution, and sale of certain products. Contrary to the AMAA, the sole purpose of the "Mushroom Act" is to compel mushroom producers to finance advertising and promotional programs developed by the Mushroom Council. The "Mushroom Act" was enacted in 1990 to create:

[A]n orderly procedure for developing, financing through adequate assessments on mushrooms produced domestically or imported into the United States, and carrying out, an effective, continuous, and coordinated program of promotion, research, and consumer and industry information designed to-

(1) strengthen the mushroom industry's position in the marketplace;

(2) maintain and expand existing markets and uses for mushrooms; and

(3) develop new markets and uses for mushrooms.

7 U.S.C. § 6101(6). The advertising and promotional purposes of the "Mushroom Act" bear no resemblance to the economic regulatory purposes of the AMAA.

(7). Because the regulatory scheme involved in the Wileman Bros. case was fundamentally different from the Mushroom Law at issue in United Foods' case, the Supreme Court's decision in Wileman Bros. is not dispositive of the constitutional issues raised by United Foods. Indeed, Wileman Bros. assists United Foods' position. The Supreme Court implied that but for the fact of an expansive regulatory scheme designed to stabilize markets, a generic advertising program would be unconstitutional. Because the Mushroom Law is neither designed nor intended to stabilize the mushroom market (it exists only to expand the market), its generic advertising program violates United Foods' First Amendment rights.

(8) In addition, in Wileman Bros. the Supreme Court did not address the equal protection issues that are present in United Foods' case. In Wileman Bros. there was no discussion of the constitutional ramifications of creating the kinds of exemptions from assessments that exist under the Mushroom Law.

WHEREFORE, United Foods prays for the following relief:

1. A judgment declaring that the Mushroom Law and the Mushroom Order violate United Foods' constitutionally guaranteed rights to freedom of speech and freedom of association under the First Amendment of the United States Constitution and United Foods' constitutionally guaranteed right to equal protection under the Fifth Amendment of the United States Constitution.

2. A judgment invalidating assessments under the Mushroom Order and declaring that United Foods shall not be subject to any such past, present or future assessments.

3. An Order granting United Foods a temporary and permanent injunction prohibiting the United States Department of Agriculture or the Mushroom Council from enforcing against United Foods any assessments under the Mushroom Law or the Mushroom Order.

4. An award of attorneys' fees and costs under the Equal Access to Justice Act.

5. Such further relief as the Court deems appropriate.

Respectfully submitted:

/s/ BRADLEY A. MACLEAN
BRADLEY A. MACLEAN
Bradley A, MacLean (B.P.R. #9562)<
FARRIS, WARFIELD &
KANADAY, PLC
Suite 1900, SunTrust Center
424 Church Street
Nashville, Tennessee 37219
(615) 244-5200
Attorney for United Foods, Inc.
OF COUNSEL:

Brian C. Leighton
701 Pollasky
Clovis, California 93612
(209) 297-6190

12 The Act (7 U.S.C. § 6101(a)) contained the following findings:

(1) mushrooms are an important food that is a valuable part of the human diet;

(2) the production of mushrooms plays a significant role in the Nation's economy in that mushroom are produced by hundreds of mushroom producers, distributed through thousands of wholesale and retail outlets, and consumed by millions of people throughout the United States and foreign countries;

(3) mushroom production benefits the environment by efficiently using agricultural byproducts;

(4) mushrooms must be high quality, readily available, handled properly, and marketed efficiently to ensure that the benefits of this important product are available to the people of the United States:

(5) the maintenance and expansion of existing markets and uses, and the development of new markets and uses, for mushrooms are vital to the welfare of producers and those concerned with marketing and using mushrooms, as well as to the agricultural economy of the Nation;

(6) the cooperative development, financing, and implementation of a coordinated program of mushroom promotion, research, and consumer information are necessary to maintain and expand existing markers for mushrooms; and

(7) mushrooms move in interstate and foreign commerce, and mushrooms that do not move in such channels of commerce directly burden or affect interstate commerce in mushrooms.

13 USDA filed a petition for a writ of certiorari in the United States Supreme Court in Wileman (Jan. 24, 1996).

PROGRAM
ANNOUNCEMENT

United States
Department of Agriculture

Agricultural Marketing Service

Information Staff
P.O. Box 96456
Washington, D.C.
20090-6456
Release No. AMS-071-98

Carol Blake (202) 720-8998
cblake@usda.gov
Billy Cox (202) 720-8998
Billy_A_Cox@usda.gov

MUSHROOM INDUSTRY VOTES TO CONTINUE PROMOTION PROGRAM

WASHINGTON, March 20, 1998-The U.S. Department of Agriculture today announced that the mushroom industry has voted to continue the promotion, research, and consumer information program for fresh mushrooms. The program is authorized by the Mushroom Promotion, Research, and Consumer Information Act of 1990. USDA's Agricultural Marketing Service conducted a referendum Feb. 24 - March 13.

Dr. Enrique E. Figueroa, administrator of AMS, said, "The results of the referendum indicate that 80 percent of those who voted favored continuance of the order and they represented 70 percent of the volume of mushrooms produced by those who voted."

The program needed the approval of a majority of the voters who represented more than 50 percent of the volume of mushrooms produced and imported by those voting in the referendum.

The program is administered by a council of nine industry representatives. The program is funded by an assessment rate of 0.45 of one cent per pound of mushrooms paid by persons who annually produce or import an average of more than 500,000 pounds of mushrooms.

An electronic version of this news release can be obtained via the World Wide Web at:

http://www.ams.usda.gov/news/newsrel.htm

UNITED STATES DEPARTMENT OF AGRICULTURE BEFORE THE SECRETARY OF AGRICULTURE

MPRCIA Docket No. 95-1

IN RE: DONALD B. MILLS, INC.,

A CALIFORNIA CORPORATION,

D/B/A/ DBM MUSHROOMS, PETITIONER

[Filed: Apr. 26, 1996]

DECISION

This is an administrative adjudicatory proceeding pursuant to 7 U.S.C. § 6106(a) in which Petitioner challenges provisions of the Mushroom Promotion, Research, and Consumer Information Act of 1990, as amended, (7 U.S.C. §§ 6101-6112) (the "Act"), and the Mushroom Promotion, Research, and Consumer Information Order (7 C.F.R. §§ 1209.1-1209.77) (the "Order"). This proceeding was instituted by a Petition, filed on March 15, 1995, by Donald B. Mills, Inc., in which Petitioner alleged that the Act and order violated provisions of the United States Constitution. Respondent, the Administrator of the Agricultural Marketing Service of the United States Department of Agriculture ("USDA" or the "Department"), filed an Answer on April 14, 1995, which denied that the Act or Order violated the Constitution.

A hearing was held in San Francisco, California, on August 15-17, 1995. Petitioner was represented by Brian C. Leighton, Fresno, California. Respondent was represented by Gregory Cooper, Office of the General Counsel, United States Department of Agriculture.

The parties have submitted proposed findings, proposed conclusions, and numerous briefs. All proposed findings, proposed conclusions, and arguments have been considered. To the extent indicated, they have been adopted. Otberwise, they have been rejected as irrelevant or not supported by the evidence. In this opinion, "Tr." refers to the transcript of the hearing; "PX" refers to the numbered exhibits offered by Petitioner; and "RX" refers to the numbered exhibits offered by Respondent.

Statutory and Regulatory Background

The Mushroom Promotion, Research, and Consumer Information Act was enacted in 1990 to create:

(1) strengthen the mushroom industry's position in the marketplace;

(2) maintain and expand existing markets and uses for mushrooms; and

(3) develop new markets and uses for mushrooms.

7 U.S.C. § 6101.12

The Act provides for the establishment of an Order,

7 U.S.C. § 6103, and of the Mushroom Council, 7 U.S.C.

§ 6104(b), with power, inter alia:

(1) to administer the order in accordance with its terms and provisions;

. . . .

(4) to propose, receive, evaluate, approve, and submit to the Secretary for approval under subsection (d) of this section budgets, plans, and projects of mushroom promotion, research, consumer information. and industry information, as well as to contract and enter into agreements with appropriate persons to implement such plans or projects;

. . . .

(6) to receive, investigate, and report to the Secretary complaints of violations of the order . . . .

7 U.S.C. § 6104(c).

Assessments at a rate of $.0025 per pound, 7 U.S.C.

§ 6104(g)(2), are levied on mushroom producers and importers, 7 U.S.C. § 6104(g)(1). First handlers are required to collect such assessments from their producers and to remit the collected assessments to the Council.

7 U.S.C. § 6104(g)(1)(A).

Three categories of mushrooms or producers are excluded from assessments. First, assessments under the Act only apply to mushrooms ". . . grown within the United States for the fresh market, or imported into the United States for the fresh market, that are marketed. . . ." Thus, the Act specifically excludes

". . . mushrooms that are commercially marinated, canned, frozen, cooked, blanched, dried, packaged in brine, or otherwise processed, as may be determined by the Secretary." 7 U.S.C. § 6102(9). Second, assessments under the Act only apply to producers and importers who produce or import ". . . on average, over 500,000 pounds of mushrooms" annually for the fresh market. 7 U.S.C. §§ 6102(6) and (11). Third, assessments under the Act do not apply to exported mushrooms. 7 U.S.C. § 6104(g)(4).

Findings of Fact

1. Petitioner, Donald B. Mills, Inc., is a producer and first handler of mushrooms. Petitioner grows approximately three million pounds of mushrooms per year, with approximately 75% of them going to the fresh market (Tr. 729-30).

2. Petitioner's market is in Oakland, south San Francisco, and San Francisco (Tr. 727).

3. Pictsweet Mushroom Farms is one of the largest fresh mushroom producers in the United States. Pictsweet began operating in 1987, and its sales have increased every year (Tr. 595, 600-01).

4. Official government statistics indicate that in 1966, 75% of mushrooms produced in the United States were used for processing and 25% for fresh use. By 1993, 69% went for fresh use and only 31% went for processing (RX 69, p. 15).

5. In 1992-1993, total United States production of mushrooms for fresh use was valued at $537,922,000 (RX 69, pp. 12, 20). Exports of fresh mushrooms peaked in 1990, totaling approximately $22,000,000 (RX 43, p. 29).

6. United States per capita fresh mushroom consumption is far below that of Canada and other Western European nations (RX 43, pp. 7, 9).

7. In 1993-1994, there were approximately 355 producers and 520 million pounds of mushrooms for fresh use (RX 69, pp. 9, 15).

8. Mushrooms are grown commercially in many states (RX 69, p. 20, n. 5). However, 43% are produced in Pennsylvania and 17% are produced in California (Tr. 328-29). Less than 1% of the domestic fresh mushroom market is from imports (RX 24, p. 1).

9. There is not an over supply of mushrooms but an adequate supply (Tr. 276).

10. Mushrooms are not a homogeneous product because there are different varieties, there are different levels of service that are attached to all mushrooms that make their value different, there are different packaging types and styles, and the quality is very different (Tr. 658-60).

11. Mushrooms are impulse items, i.e., they are not an essential part of the consumer's life and their diet. Therefore, if the product does not look good, the consumers will not buy it (Tr. 660). Produce managers of grocery stores and grocery chains buy based upon consumer demand (Tr. 736).

12. Mushrooms have very little nutritional value (Tr. 327-28, 514).

13. Selling of fresh mushrooms must be in a very regional market because mushrooms cannot be shipped long distances and have an extremely short shelf life (Tr. 601).

14. On a national basis, there is no one company or companies that have a monopoly or oligopoly because of the regional nature of the business, but regionally the opposite is true, where only a few producers control the market (Tr. 660-63).

15. The Mushroom Order became effective on January 8, 1993 (RX 27), and the Mushroom Council was first seated on June 24, 1993 (RX 60, p. 1).

16. The strategic plan of the Mushroom Council is to increase per capita consumption of mushrooms (Tr. 515-16). From 1970 through 1993, total mushroom consumption increased every year (Tr. 394), although per capita consumption decreased in the 1990's after having increased in the 1980's (Tr. 190; RX 43, p. 7).

17. The Mushroom Council began collecting assessments from mushroom producers and importers on August 1, 1993 (Tr. 200).

18. Assessments under the Mushroom Promotion, Research, and Consumer Information Act and the Mushroom Promotion, Research, and Consumer Information Order are levied on fresh mushroom producers and importers at a rate of $.0025 per pound. Assessment reports and checks are submitted monthly (Tr. 257).

19. Only producers or importers averaging over 500,000 pounds annually for the fresh domestic market are subject to assessments. One hundred fifty-two mushroom producers in the United States are subject to assessments as they each produce over 500,000 pounds of mushrooms for the fresh domestic market (Tr. 329). In 1995, the Mushroom Council collected assessments from these 152 producers encompassing 515-518 million pounds of mushrooms for fresh use (Tr. 252).

20. Fifty-nine fresh mushroom producers have filed exemptions with the Mushroom Council claiming that they produce 500,000 pounds or less of fresh mushrooms annually for the domestic market and are therefore exempt from assessments (Tr. 329).

21. Mushrooms for export and mushrooms for processing are excluded from the program.

22. Many fresh mushroom producers engage in individual promotion program that increase consumption (Tr. 730-31, 740-41, 750-56).

23. In 1995, the Mushroom Council had a budget of $1.3 million (Tr. 197). This is an extremely small budget (Tr. 127, 393). There are essentially three parts to the Council's promotion program: retail merchandising promotion, consumer publicity and education, and food service promotion (Tr. 229).

24. The Mushroom Council's president and public relations director have engaged in an aggressive, imaginative campaign of advertising and promotion. This has included preparation of press releases, articles, brochures, kits, and photographs which are distributed to newspapers, radio stations, retailers, consumers, and even schools. These materials are attractive and informative. Much free publicity has been obtained as a result of the Council's efforts.

25. Econometric modeling is a precise method of measuring the effectiveness of a promotion program (Tr. 28-29). The Mushroom Council's Program cannot be measured econometrically because it began mainly in 1995, and several years data is necessary to conduct a complete analysis (Tr. 32-33, 103).

26. Neither the Mushroom Council nor any of the firms that it has employed have done any study to determine whether or not the Council's programs have increased demand for mushrooms (Tr. 299-301).

27. None of the promotional and educational programs engaged in by the Mushroom Council has revealed any increase in consumption, price, or demand for mushrooms (Tr. 294, 324, 517-18, 522-25, 642-44, 648-49, 740-51).

Discussion

First Amendment Analysis

I. The Criteria to be Applied

Petitioner argues that two decisions of the United States Court of Appeals for the Ninth Circuit apply to this case and, based upon those decisions, the Mushroom Promotion Program established by USDA violates the First Amendment of the United States Constitution and is, therefore, unconstitutional. The cases are Wileman Bros. v. Espy, 58 F.3d 1367 (9th Cir. 1995) and Cal-Almond v. United States Dep't of Agric., 14 F.3d 429 (9th Cir. 1993). Respondents argues that these cases do not apply to the facts at hand, are incorrectly decided, and should not be followed.13

The Ninth Circuit held that the government's generic advertising programs for California peaches, nectarines, and plums in Wileman and for almonds in Cal-Almond were invalid because they did not comply with a three-part test enunciated by the Supreme Court in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557 (1980).

In Central Hudson, the Supreme Court held that "[t]he First Amendment, as applied to the States through the Fourteenth Amendment, protects commercial speech from unwarranted governmental regulation." Central Hudson, 447 U.S. at 561. If commercial speech is neither misleading nor related to unlawful activity, restrictions on such speech must: 1) implement a substantial government interest; 2) directly advance that interest; and 3) be narrowly tailored to achieve the desired objective. See Board of Trustees v. Fox, 492 U.S. 469 (1989).

In accordance with the decisions of the Ninth Circuit in Cal-Almond and Wileman, I find that the Mushroom Promotion Program in this case does not satisfy the Supreme Court's three-part Central Hudson test. Although there is a substantial government interest in connection with the Mushroom Program, the program does not directly advance that interest and is not sufficiently narrowly tailored.

A. Substantial Government Interest

Congress stated that the mushroom legislation was passed to "strengthen the mushroom industry's position in the market place," "maintain and expand existing markets . . ." and "develop new markets and uses for mushrooms." 7 U.S.C. § 6101. The Ninth Circuit has held that there is a substantial and legitimate government interest in creating effective mandatory cooperative promotion and information programs to stimulate market demand for the financial benefit of the producers in the peach and nectarine industry in Wileman and the almond industry in Cal-Almond. The court in Cal-Almond required no specific analysis of the almond industry or its profitability trends before it concluded: "We agree that stimulating the demand for almonds in order to enhance returns to almond producers and stabilize the health of the almond industry is a substantial state interest." Cal-Almond, 14 F.3d at 437.

Similarly, the court in Wileman endorsed the same conclusion although there was absolutely no evidence suggesting that the treefruit industry was in any distress that required rescuing. Wileman Bros. & Elliott v. Espy, 58 F.3d 1367, 1378 (9th Cir. 1995).

I find, therefore, that the government's interest in promoting and expanding the mushroom industry is substantial.

B. Direct Advancement

The court in Cal-Almond stated, "As a starting point for our analysis, therefore we must determine how effective the Board's own almond promotion efforts are." Cal-Almond, 14 F.3d at 437.

A court will not merely assume that the legislative program will always advance the asserted state interest sufficiently to justify its abridgment on commercial free speech. City Council v. Taxpayers for Vincent, 466 U.S. 789, 803 n. 22 (1984). As the court held in

Rubin v. Coors Brewing Co., 115 S. Ct. 1585, 1592 (1985),

In Edenfield, we decided that the Government carries the burden of showing that the challenged regulation advances the Government's interest 'in a direct and material way.' Id., at ___, 113 S. Ct., at 1798. That burden 'is not satisfied by mere speculation and conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.' (internal citation omitted).

The Supreme Court assumes as a matter of law that advertising increases consumption of the product being advertised. See, e.g., Wileman, 58 F.3d at 1378; Cal-Almond, 14 F.3d at 439; Posadas de Puerto Rico Assoc. v. Tourism Co. of Puerto Rico, 478 U.S. 328, 342 (1986). As stated by the Ninth Circuit in Wileman, "the question is whether the mandatory generic advertising program sells the product more effectively than the 'specific, targeted marketing efforts of individual handlers.'" Wileman, 58 F. 3d at 1378 (citing Cal-Almond, 14 F.3d at 439).

In Cal-Almond, almond handlers presented evidence that the assessments collected by the Almond Board hindered their own advertising efforts. Because the Secretary could not provide evidence that the generic advertising program was more effective at promoting almonds than the individual efforts of the handlers, the Ninth Circuit held that the Almond Board's advertising

and promotion program did not directly advance the government's interest:

We agree with [the handlers'] argument that each handler knows best how to sell his own almonds; we are unwilling to presume, in the absence of hard evidence to the contrary, that a government agency is better at marketing than an individual businessperson.

Cal-Almond, 14 F.3d at 439.

Similarly, in Wileman, the Ninth Circuit stated:

[T]he Secretary has demonstrated that advertising increases consumption of peaches and nectarines but has not gone the necessary next step of demonstrating that the generic advertising program is better at increasing consumption than individualized advertising, as Cal-Almond requires. Thus, the generic advertising programs for peaches and nectarines do not "directly advance" the government's interest and fail the second prong of the Central Hudson test.

Wileman, 58 F.9d at 1379.

Petitioner contends that "there is absolutely no evidence presented by the government that the Mushroom Council's mandatory assessment program for promotion, education and advertising has substantially increased [the] government interest [in increasing sales of mushrooms]." (Petitioner's Brief at 16). This point is confirmed by Respondent's witnesses and other evidence. Wade Whitfield, the president and CEO of the Mushroom Council since October 1, 1993, testified that neither the Council nor any of the firms that it has employed have done any study to determine whether or not the Council's programs have increased demand for mushrooms (Tr. 299-301). Similarly, Robyn Wilk, the Mushroom Council's public relations director, testified that the Mushroom Council has no information that any of the programs completed is 1995 have increased the consumption or sale of mushrooms (Tr. 517-18). Additionally, John Haltom, president of Pictsweet Mushroom Farms, another mushroom producer, and also treasurer of the Mushroom Council, testified that he has seen no measurable improvement and no impact from the Council's promotional and educational research efforts (Tr. 642-44).

In 1995, the Mushroom Council had a budget of $1.3 million (Tr. 197). There were three main categories of spending by the Council in 1995: 1) retail merchandising promotion; 2) consumer publicity and education; and 3) food service promotion (Tr. 229).

The efforts of the Mushroom Council are impressive and commendable. For example, a "color page" advertisement was prepared for newspapers with mushroom photography, facts, and recipes, and has, to date, been run in more than 160 newspapers (Tr. 227, 498; RX 74, items 3-5; RX 75). The page won an award as one of the top 20 pages of the year (Tr. 525-26). In addition, the Council distributed the "Blueprint for Profit," a retail kit with a shelf layout schematic, care and handling cards for consumers, and a full color chart for produce clerks showing varieties, uses, flavors, and handling requirements, to half of the country's supermarkets and 1,500 smaller stores (Tr. 230, 236-45; RX 72, items 5, 6). The Council also developed a comprehensive education program to help raise children's preferences for mushrooms (Tr. 452-54; RX 58, pp. 6, 8).

Econometric modeling is a precise method of measuring the effectiveness of a promotion program. The mushroom industry cannot be measured econometrically because the program is relatively new, and several years' data are necessary to conduct a complete analysis (Tr. 32-33, 103). Thus, although the public relations and educational programs run by the Council were performed very well, the Council has seen no measurable benefit in increased sales of mushrooms as a result of those programs (Tr. 648-49).

The Department has demonstrated that advertising increases consumption of mushrooms. However, the Department has not shown that the efforts of the Mushroom Council are better at increasing consumption than the individual efforts of the mushroom handlers. None of the government witnesses could substantiate that any part of their program increased sales of, demand for, or the price of mushrooms, nor could they show that new markets had been expanded, new uses had been found, or that the program strengthened the mushroom industry's position in the marketplace (Petitioner's Brief at 17). Thus, the Mushroom Council's program has not "directly advanced" the government's interest and fails the second part of the Central Hudson test.

C. Narrow