DELANO FARMS COMPANY v. CALIFORNIA TABLE GRAPE COMMISSION

Appellants’ Petition for Review

Cal.May 19, 2015

SUPREME COURT S$ 226538 Gey FILED 0)CaseNo.S or MAY 1 9 2015 IN THE SUPREME COURT OF CALIFORNIA Frank A. McGuire Clerk Deput DELANO FARMS COMPANY,FOURSTARFRUIT,INC., _ GERAWANFARMING,INC., BIDART BROS., AND BLANC VINEYARDS Plaintiffs and Petitioners, ve CALIFORNIA TABLE GRAPE COMMISSION Defendant and Respondent. AFTER A DECISION BY THE COURT OF APPEAL, FIFTH DISTRICT Case No. F067956 PETITION FOR REVIEW BRIAN C. LEIGHTON MICHAEL W. McCONNELL* Attorney At Law Kirkland & Ellis LLP 701 Pollasky Avenue 655 15th Street NW #1200 Clovis, California 93612 Washington, D.C. 20005 Telephone: (559) 297-6190 _ T: (202) 879-5000 / F: (202) 879-5200 Facsimile: (559) 297-6194 michael.mcconnell@kirkland.com brian@lawleighton.com DANIELLE R. SASSOON* Kirkland & Ellis LLP 601 Lexington Avenue New York, N.Y. 10022 T: (212) 446-4800 / F: 212-446-6460 danielle.sassoon@kirkland.com *Pro hac vice pending Attorneysfor Plaintiffs and Petitioners Delano Farms Company, Four Star Fruit, Inc., Gerawan Farming, Inc., Bidart Bros., and Blanc Vineyards ° TABLE OF CONTENTS STATEMENT OF ISSUES PRESENTED..........ccssccsssssssssssscsssssersescacscseceees 1. WHY REVIEW SHOULD BE GRANTED......ccecceccssecesescssssscssecesessceaeers 1 STATEMENT OF THE CASE o0.....cceccesssssssessssesesscecesssessscssssusssccserenevecseseees 4 A. Petitioners and the Table Grape Commission............0.ccsee+ 4 B. The Proceedings Below...........cscscssssscssesssssssscssssscsscsssseseeecece 9 LEGAL DISCUSSIONoeeeesecscsesssssssessesscsssseseseesesuceessssecssssecsensaseceeees 10 This Court Should Review the Court of Appeal’s Holding that the Table Grape Commission’s Advertising is Government Speech Exemptfrom Constitutional Review ...........ccccscssseeesseeeeee 10 A. The Court ofAppeal Disregarded this Court’s PreCECEM 0...seeeeeeeeeesceeseecescsccesescesseseenecsnsscsssessssscssaceecees 13 B. The Court ofAppeal Erroneously Deferred to the United States Court ofAppeals for the Ninth Circuit on a Question of State Constitutional Law ...........cesses 20 C. The Court ofAppeal’s Holding is in Conflict with the U.S. Supreme Court’s Decision in Johanns.....ccccccsscssceeees 22 CONCLUSION....cccecccesesessceesscscesesccensscsessscssessseseseseseseesesessssssseesssessseesas 32 TABLE OF AUTHORITIES Page(s) Cases Barrett v. Rosenthal (2006) 40 Cal.4th 33 oon.eecssessssssssssseccscscsescsesecsvstecseesssseasscesesescecacaees 20 Brantley v. Pisaro (1996) 42 Cal.App.4th 1591 oecccccecssssssscscscscssscesssesssesecssessasscssesseees 5 Bui v. Alarcon (9th Cir. 2000) 234 F.3d 1279... cccescssscssessssscscssscssscscecssesesesssessseseeseseees 21 Central Hudson Gas & Elec. v. Public Serv. Comm’n (1980) 447 U.S. 557 oeeceeccesssesssssssscsesesescsesesesesssusssscacscssacseseesscatacscasacas 14 Delano Farms Co. v. California Table Grape Com. (2015) 235 Cal.App.4th 967, 185 Cal.Rptr.3d 771 ...ccccccesceseseseespassim Delano Farms Co. v. California Table Grape Com. (9th Cir. 2009) 586 F.3d 1219... eccssssssscssssscssscssssssrseseacseseesertsens passim Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513 oo.eeccccccsscscsesecsssssessssessecscsessscrssssessseneseess 5 Gallo Cattle Co. v. Kawamura (2008) 159 Cal.App.4th 948 ooo. ecccscsscsessssssssessscssscsssststcesecesessesescneaees 23 Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1 oeccccssssescsesssesesscsssssscsssssecsssesccssesecesesecneatspassim Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468 ooocecccccsessscscsssscsesesscsssssssscsssarseeeseeeaeas passim Glickman v. Wileman Bros. & Elliott (1997) 521 U.S. 457 oeeccccccesscssesesesesesessesesscscsesssscsesssecscecearenseeseeseasaes 2, 14 Johanns v. Livestock Marketing Assn. (2005) 544 U.S. 550 eeescceseessssesesecesssessessssesssscscessesssecscectateeseceseas passim Keller v. State Bar ofCalifornia (1990) 496 U.S. Leeccseessssessestssssssseecssessssestsesssecsssssceecssectaeeeneess 13, 16 Lebronv. Nat. R.R. Passenger Corp. (1995) 513 U.S. 374 veeccesessssessssssseesescssesesesssssesscacsssscessseseeeseersaees 31, 32 li North Carolina State Bd. ofDental Examiners v. F.T.C. CULS. 2015) 135 S.Ct. L101] neecessssesesessssessssssssssssssseseseseesestsasacscssees 30 People v. Teresinski (1982) 30 Cal.3d 82200 eeececsssssscesescscscecsssssssscerscsesesesescacacssstseseevasecs 2,21 Sarausad v. Porter (9th Cir. 2007) 503 F.3d 822.0... cecsscsssssssssessssssscscsvecsssceceseatsseatscseasacsees 21 United States v. United Foods (2001) 533 U.S. 405 oc eecsssssscesessscsssssscsesssesesesscsesessesssacscacstscaceeees passim Statutes Cal. Food & Agric. Code § 58841 ...cccccccsesssesssssssssssssssscccesscsesessscassessenees 15 Cal. Food & Agric. Code § 65500(f)........cccssccssssescsssecsescsssscscescccsesusevecsessses 6 Cal. Food & Agric. Code § 65550.....c.ccccsccsssssssesssssscsesctsssesssssscssstscsessseses 5, 6 Cal. Food & Agric. Code § 65551 ...ccssccccssssscsssssssscssscsessecsacscscssssessesavavoese 8 Cal. Food & Agric. Code § 65556......c.:cscsssssssssssssssssceceesssesesssssesescstsesseessesee 6 Cal. Food & Agric. Code § 65563.......:cccescssssssssssssssssccsseseesssssscsesessesesssescceees 6 Cal. Food & Agric. Code § 65571o...cscscssssssssssssssssscsssscceeseccscssscesescacaeee 9, 27 Cal. Food & Agric. Code § 65572.....ccccsssscsssccssssssscsceesessceeseeeees 7, 8, 24, 25 Cal. Food & Agric. Code § 65575.1...cssssssssssssessssssesssssssescscecerscssscssseseseavees 6 Cal. Food & Agric. Code § 65650......ccssscccssssssssssssscssecsscecesensesesessscecacss 7, 24 Other Authorities Paul M. Schoenhard, The End ofCompelled Contributionsfor Subsidized Advertising? (2002) 25 Harv. J.L. & Pub. Poly 1185 ovccscccsssssscesssssessestsessscecsessees 14 William J. Brennan, Jr., State Constitutions and the Protection ofIndividual Rights, (1976) 90 Harv. L. Rev. 489. ....cccccssssssscsesssssessscssssssesseeseceenseeseaes 2 iil STATEMENT OF ISSUES PRESENTED 1. Whether, consistent with free speech principles underArticle I of the California Constitution, state-empowered industry boards may compel unwilling parties to contribute to their commercial advertising without serious constitutional scrutiny, even if they are not themselves subject to actual supervision and control by democratically accountable officials. 2. Whether state courts should adhere to precedent of the California Supreme Court, rather than defer to lower federal courts on questions of state constitutional law. WHY REVIEW SHOULD BE GRANTED This is the latest round in a legal struggle between independent farmers and a government-empoweredindustry board over whowill control commercial speech abouttheir products. The case provides this Court the opportunity to determine whether the state courts of California—and ultimately, this Court—will decide the meaning of Article I, Section 2, the free speech provision of the Constitution of the State of California, or whetherthe state courts will merely defer to the lower federal courts about the content of free speech principles andthe nature ofstate programs. In GerawanI, this Court expressly declined to follow a then-recent holding of the United States Supreme Court permitting government- compelled collectivization of commercial speech about agricultural products, (see Glickman v. Wileman Bros. & Elliott (1997) 521 U.S. 457), recognizing that the state constitution is not a mere simulacrum of the federal. (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468 (Gerawan I).) Gerawan I observed that as the ultimate interpreter of the California Constitution, this Court has authority to provide an independent—and more protective—interpretation of this State’s fundamental law. (/d. at 485.) Sometimes, maybe often, analogous provisions of state and federal constitutional law will mean the same thing, and the interpretations ofthe federal Constitution by the United States Supreme Court are alwaysentitled to respectful consideration. (People v. Teresinski (1982) 30 Cal.3d 822, 835.) But in the final analysis, cases governed by the California Constitution require California interpretation. (See generally William J. Brennan, Jr., State Constitutions and the Protection of Individual Rights, (1976) 90 Harv, L. Rev. 489.) Subsequently, in Gerawan IJ, this Court held that industry boards exercising state-delegated powers are insulated from Article I review under the government speech doctrine only if in actual practice their decisions are supervised and controlled by a democratically accountable official, such as the Secretary of the California Department of Food and Agriculture. (Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1 (Gerawan II.) Importantly, after GerawanII, the United States Supreme Court reached the 2 same conclusion in Johanns v. Livestock Marketing Assn. (2005) 544 U.S. 550. In that case, the Court held that the compelled commercial speech program at issue was government speech insulated from First Amendment scrutiny because—and only because—the relevant decisions of the industry board were closely scrutinized and controlled by the Secretary of Agriculture. This condition for claiming the protections of government speech makes sense; as this Court observed in Gerawan I, absent true government oversight, marketing order programs are “not so much a mechanism of regulation of the producers and handlers of an agricultural commodity by a governmental agency, as a mechanism of self-regulation by the producers and handlers themselves.” (Gerawan I, 24 Cal.4th at 503 n.8.) In this case, it is undisputed that the relevant decisions of the California Table Grape Commission are not supervised orcontrolled by any democratically accountable official. Rather, the industry representatives who dominate the Commission are free to advance their own private interests, without state scrutiny and certainly without public control. Nonetheless, believing that it had an obligation to defer to the judgment of the Ninth Circuit in a federal case involving the same program,the court below essentially ignored Gerawan JI and adopted the Ninth Circuit’s misconstruction of Johanns—holding, contrary to both Gerawan II and Johanns, that the Table Grape Commission is exempt from constitutional 3 scrutiny despite an undisputed lack of democratic accountability. (See Delano Farms Co. v. California Table Grape Com. (2015) 235 Cal.App.4th 967, 185 Cal.Rptr.3d 771, 780 (deferring to Delano Farms Co. v. California Table Grape Com. (9th Cir. 2009) 586 F.3d 1219).) Petitioners urge this Court to review the decision below, return to the principle of Gerawan J, and reaffirm that Article I of the California Constitution must be enforced in accordance with this Court’s independent reading and not that of the inferior federal court that happens to have jurisdiction in this State. Petitioners also urge this Court to return to the principle of Gerawan If, and reaffirm that when the legislature delegates coercive power to an industry group over what ordinarily would be private commercial speech,it can escape serious constitutional scrutiny under the government speech doctrine only if the industry group is subject, in fact and not merely on paper, to democratic oversight and control. The court below held otherwise. This case warrants review. STATEMENT OF THE CASE A. Petitioners and the Table Grape Commission Petitioners Delano Farms Company, Blanc Vineyards, LLC, Gerawan Farming, Inc., Four Star Fruit, Inc., and Bidart Brothers, are independent grape farmers doing business in California. All are family businesses, and some have been operating in the state for decades. All of the petitioners grow, market, and ship their own grapes, and most do not provide those services to other growers. (13 Clerk’s Transcript (“CT”) 3106:25-26; 1 CT 158:12-14; 1 CT 195:2-6; 1 CT 246:6-7.) Delano Farms, for example, grows table grapes on 6,000 acres in Kern County, California and does not handle grapes from any other producer, shipping only the grapes it grows and harvests itself. (13 CT 3106:24.) Currently, Delano Farms ships more than six million boxes of table grapes every year, throughout the United States and in the export market. (13 CT 3107:1-2.) Asindependent producers and marketers, Delano and the other petitioners expend time, energy, and moneytodistinguish theirfruit from that of other table grape growers and shippersin the industry. (13 CT 3107:1-6; 1 CT 159:7-14; 1 CT 195:6-16; 1 CT 246:9-13.) From their point of view, table grapes are not a commodity; they are productsreflecting the land, care, and skill of their growers.! As grape growers in California, petitioners’ businesses have been affected by the activities of the Table Grape Commission (“the Commission”) created under the Ketchum Act of 1967. (See Cal. Food & Agric. Code § 65550, et seq.) The Ketchum Act formed the Commission to aid table grape growers through advertising, education, marketing, research, This case was decided on summary judgmentbelow, so all facts must be construed by the appellate court in the light more favorable to petitioners. (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1601; Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1522.) and government-relations efforts, and empowered the Commission to impose assessments on grape growers to fund its pursuit of these goals. (Delano Farms Co. v. California Table Grape Comm’n (2015) 185 Cal.Rptr.3d 771, 773.) The Commission is composed of eighteen of petitioners’ competitors—three from each of the state’s six active grape- growing districts—and one “public member.” (/bid.) The Secretary of the California Department of Food and Agriculture (CDFA) appoints the members of the Commission from a series of nominees chosen by the table grape producers of each district, and retains the power to remove them. (See Cal. Food & Agric. Code §§ 65550, 65556, 65563, 65575.1.) Underthe Ketchum Act, all table grape growers are required to pay assessments, which the Commission uses to fund: The [Commission’s] promotion of the sale of fresh grapes for human consumption by means of advertising, dissemination of information on the manner and means of production, and the care and effort required in the production of such grapes, the methods and care required in preparing and transporting such grapes to market, and the handling of the same in consuming market.... (§ 65500(f).) In effect, the Commission requires all table grape producers to devote a portion of the resources available to product advertising to collective promotion of grapes as an undifferentiated commodity. Some growers benefit and others lose from this approach, depending on whether they wish to differentiate their products from those of their competitors. (13 CT 3112:3-20.) The Commission is authorized, within a statutory cap, to set the rate of the assessments, as well as to sue producers for payment, civil penalties, or injunctive relief in the event of nonpayment of any assessment. (See Cal. Food & Agric. Code §§ 65572(/), 65650.) Overthe past several years, the Commission has imposed an assessment on petitioners of about 13¢ per box of table grapes, which (depending on the petitioner) has amounted to tens of thousandsor hundreds of thousands ofdollars a year in assessments, and, in some cases, millions of dollars aggregated over the entire term of the assessment regime. Delano Farms, for example, has been paying $600,000 in assessments each year beginning with the 2000-2001 crop season. (13 CT 3108:5-9.) Any advertising or promotion of its own productis on top of this—and to the extent that Delano’s business strategy is to differentiate its product from that of its generic competitors, the Commission’s generic message conflicts with Delano’s own message. (13 CT 3112:3-20.) The expenditure of these funds for promotional campaigns or “any other similar activities which the commission may determine appropriate for the maintenance and expansion of present markets and the creation of new and larger markets for fresh grapes,” is left to “the discretion of the commission.” (Cal. Food & Agric. Code § 65572(i).) The Commission has discretion over the content of promotional campaigns and is not required to seek the approval of the Secretary of CDFA before running its assessment-funded advertisements. (§ 65572(h- 7 k).) There is no statutory requirement that the Secretary of CDFA orhis designee attend Commission meetings, and it is undisputed that in practice the Secretary of CDFA does not oversee the content of the Commission’s advertisements, and has exercised virtually no supervision of the Commission’s activities more generally. (See Delano Farms, 586 F.3d at 1229-30 (acknowledging that “the Secretary and the CDFA have, in practice, performedvirtually no supervision of the Commission”).) The Secretary of CDFA cedes control to the Commission in other ways. Forone, the statute grants the Commission the authority “[t]o adopt and from time to time alter, rescind, modify and amend all proper and necessary rules, regulations and orders for the exercise ofits powers and the performanceofits duties, including rules for regulation of appeals from any rule, regulation or order of the commission.” (Cal. Food & Agric. Code § 65572(b).) Other activities left “in the discretion of the commission” include the authority to determine the upcoming year’s assessment (§65572()), to allocate assessment funds for scientific research and study (§65572(k)), and “to enter into any andall contracts and agreements,and to create such liabilities and borrow such funds in advance of receipt of assessments as may be necessary.” (§65572(e).) The Commission is a corporate entity that “shall have the powerto sue and besued, to contract and be contracted with, and to have and possess all of the powers of a corporation.” (§65551.) Tellingly, the statute proclaimsthat “[t]he State of 8 California shall not be liable for the acts of the commission orits contracts.” (§ 65571.) B. The Proceedings Below Petitioners filed six complaints that were later consolidated in the Superior Court of California, County of Fresno, Central Division. Petitioners alleged, in part, that the “statutes authorizing the existence of the Commission, and the assessments imposed in accordance with the same,” violated their rights under the free speech and free association clauses of Article I, Sections 2 and 3 of the California Constitution. (See, e.g., 13 CT 3129:1-2.) In short, petitioners asserted that the assessments to fund the Commission’s advertisements were an unconstitutional compelled subsidy of speech. Petitioners alleged that the assessments forced them to spend money in support of a message they did not agree with and that damaged their business, which depends on developing and marketing table grapes of higher quality than those of their competitors. (13 CT 3112:3- 20.) The Commission’s advertisements harm petitioners’ ability to promote and distinguish their own high-quality products by marketing all California table grapes collectively and thus, generically. See United States v. United Foods (2001) 533 U.S. 405 (holding unconstitutional a federal statute that required mushroom handlers to fund a generic message inconsistent with their emphasis on the importance of the differences among branded products).) On May 22, 2013, the Superior Court granted the California Table Grape Commission’s motion for summary judgment. The California Court of Appeal, Fifth District, affirmed. The court deferred to the United States Court of Appeals for the Ninth Circuit’s decision in Delano Farms Co. v. California Table Grape Com. (9th Cir. 2009) 586 F.3d 1219, which held that the same subsidies were immunefrom constitutional review underthe First Amendmentof the U.S. Constitution. Adopting the reasoning of the Ninth Circuit, the Court of Appeal concluded that the “Commission’s activities could be classified as government speech” under Johanns v. Livestock Marketing Assn. (2005) 544 U.S. 550, in one of two ways:“if the Commission is itself a governmententity or if the Commission’s message is effectively controlled by the state.” (Delano Farms, 185 Cal.Rptr.3d at 778.) The Fifth District Court of Appeal held that the Commission’s promotional campaigns were government speech because the government effectively controlled the Commission’s speech. (/d. at 780.) It therefore did not reach the question whether the Commission is a governmententity. ([bid.) LEGAL DISCUSSION THIS COURT SHOULD REVIEW THE COURT OF APPEAL’S HOLDING THAT THE TABLE GRAPE COMMISSION’S ADVERTISING IS GOVERNMENT SPEECH EXEMPT FROM CONSTITUTIONAL REVIEW There are obvious tensions, warranting this Court’s review, between this Court’s decisions in Gerawan I and IJ and the Fifth District Court of 10 Appeal’s deference to the Court of Appeals for the Ninth Circuit on a question of state constitutional interpretation. There are also obvious tensions between the Ninth Circuit’s interpretation of Johanns vy. Livestock Marketing Assn. (2005) 544 U.S. 550, embraced by the Fifth District Court ofAppeals below, and both Gerawan II and Johannsitself. In Gerawan IJ, this Court held that a government-empowered industry body—like the Table Grape Commission—cannot claim the talisman of government speech absent genuine control by politically accountable governmentofficials over the promotional message. (Gerawan I, 33 Cal.4th at 26-28.) Here, it is undisputed that the Secretary of CDFA has performedvirtually no supervision of the Table Grape Commission in general, and exercised no oversight over its promotional campaigns in particular. Instead of following this Court’s guidance in Gerawan II, the Court of Appeal instead deferred to the Ninth Circuit’s determination of a parallel question under the First Amendment and thus abdicated thestate court’s responsibility to interpret questions of state constitutional law independently of federal interpretations of federal law. In deferring to the Ninth Circuit’s analysis, the court below adopted an interpretation of Article I that contradicts both this Court’s holding in GerawanII and the U.S. Supreme Court’s decision in Johanns. Gerawan LH and Johannsboth hold that government-empowered industry boards may compel unwilling parties to contribute to their commercial speech only if 11 democratically accountable governmentofficials “in fact ... decide[]” the message of the commodity advertising at issue, (Gerawan I, 33 Cal.4th at 28), and controlit “from beginning to end,” (Johanns, 544 U.S.at 560). It is undisputed in this case, and the court below explicitly recognized, (Delano Farms, 185 Cal.Rptr. at 779), that the Table Grape Commission is effectively autonomousand thus presents the opposite case from that of the Beef Board in Johanns. Absent actual democratic accountability and control, the Commission’s assessments challenged here are a forced subsidy of private—not government—speech. In sum, although the Table Grape Commission exercises coercive power delegated by the state, it is not a state agency, it is not under democratic control, and its speech is not that of the California government. The Court need not reach the ultimate merits of this case at this juncture, but we submit that if the appellate court’s holding about government speech is reversed and proper free speech scrutiny is applied, this program cannotpossibly survive constitutional review. (See Gerawan I, 33 Cal.4th at 20-25 (remanding for compelled subsidy to be reviewed under intermediate judicial scrutiny); United Foods, 533 U.S. at 411 (holding that mushroom handers could not be forced to fund a message “that mushrooms are worth consuming whetherornot they are branded”).) 12 A. The Court of Appeal Disregarded this Court’s Precedent The Court of Appeal’s holding that the subsidies at issue are exempt from constitutional review because they fund government speech is inconsistent with this Court’s precedent. The California Supreme Court has held that a program that compels the funding of commodity advertising implicates the right to free speech under the California Constitution. (Gerawan I, 24 Cal.4th 468.) This Court recognized in Gerawan that the right to free speech“is put at risk both by prohibiting a speaker from saying what he otherwise would say and also by compelling him to say what he otherwise would not say,” and that this risk extends to the compelled subsidy of a message a speaker disagrees with. (Gerawan I, 24 Cal.4th at 484; see also Keller v. State Bar of California (1990) 496 U.S. 1; United Foods, 533 U.S. 405.) In setting forth these principles, the California Supreme Court emphasized that the State Constitution is even more protective of free speech than the U.S. Constitution: “article I’s free speech clause andits right to freedom of speech are not only as broad andas great as the First Amendment’s, they are even ‘broader’ and ‘greater.’” (Gerawan I, 24 Cal.4th at 486.) In Gerawan II, this Court specified the standard for assessing the constitutionality of a compelled subsidy of speech. (Gerawan IJ, 24 Cal.4th. 1.) The Gerawan cases involved plum growers seeking to differentiate their products, who challenged a marketing order requiring 13 them to finance generic advertising of plumscrafted by an industry board dominated by their competitors. (/bid.) Expressly parting ways with the Supreme Court’s First Amendment decision in Glickman v. Wileman Bros. & Elliott (1997) 521 U.S. 457, Gerawan I held that the plum marketing order was subject to review under the free speech clause of the state constitution. (Gerawan I, 24 Cal.4th at 475-76.) Between Gerawan I and i, the U.S. Supreme Court substantially cabined Glickman, holding that compelled generic advertising programs of this sort violate the First Amendmentunless they are an integral part of a comprehensive regulatory scheme,in effect bringing federal law back into alignment with this Court’s interpretation of California law. (United Foods, 533 U.S. 405.)? In GerawanII, the Court clarified that the plum advertising program should be reviewed on remand underthe intermediate scrutiny standard set forth in Central Hudson Gas & Elec. v. Public Serv. Comm’n (1980) 447 U.S. 557. (Gerawan II, 24 Cal.4th at 6.) But in an important caveat, the Court held that if the defendant could show that the subsidized speech was the government’s own, then the compelled speech program would be exempt from constitutional review. (Ud. at 17-18.) The Court further decided that 7 Paul M. Schoenhard, The End of Compelled Contributions for Subsidized Advertising?: United States v. United Foods, 533 U.S. 405 (2001), (2002) 25 Harv. J.L. & Pub. Pol’y 1185, 1186 (discussing the tension between Glickman and United Foods and noting that the latter “cabin[ed]” the holding of the former). 14 the defendant’s government speech defense could not be “resolved on the pleadings” and “require[d] further factfinding” below. (Jd. at 23.) In remanding the case for further proceedings, the Court made clear that the Plum Board’s status as a government-created entity led by plum producers and handlers appointed by the Secretary was not enough. (/d. at 28; see also Cal. Food & Agric. Code § 58841.) That determination was consistent with Gerawan J’s observation that marketing order programs are “not so much a mechanism of regulation of the producers and handlers of an agricultural commodity by a governmental agency, as a mechanism of self-regulation by the producers and handlers themselves.” (Gerawan I, 24 Cal.4th at 503 n.8.) Therefore, the defendant was required to show that the Secretary not only had oversight over the Plum Board bystatute, but that he also exercised control over the Plum Board’s messaging in practice. (Gerawan II, 33 Cal.4th at 28.) The court below relied upon this distinction between private and government speech to exempt the Table Grape Commission’s compelled subsidies from constitutional review. But it ignored Gerawan II’s clear guidance about what, in the context of a commodity advertising program, qualifies as the government’s own speech. By Gerawan II’s plain terms, the Table Grape Commission cannot demonstrate that its promotional campaigns constitute government speech because the Secretary of CDFA is 15 not required by statute to oversee and approve the Commission’s promotional campaigns, andhas also failed to do so in practice. The Gerawan II Court first rejected the argument that the Plum Board’s generic advertising was “government speech” by definition, on account of the Board’s status as a legislative creation with government appointees. The Court relied primarily on the analysis in Keller v. State Bar of California (1990) 496 U.S. 1, which held that the State Bar of California’s mandatory dues, used to finance political and ideological activities with which members disagreed, were a compelled subsidy of private speech that violated the First Amendment. Keller reasoned that the State Bar, even though formed by the State, “is a good deal different from most other entities that would be regarded in common parlance as ‘government agencies.’” (Gerawan II, 33 Cal.4th at 27 (quoting Keller, 496 U.S. at 11).) The State Bar’s funds came from dues imposed on members, “not from appropriations made to it by the legislature,” its members comprised a particular professional community that had no choice but to pay the dues, and it was formed “not to participate in the general government of the State,” but to oversee a specialized professional sphere. (Keller, 496 U.S. at 11-13.) For these reasons, Keller concluded that State Bar’s board of governors were not typical “[g]overnment officials ... expected as part of the democratic process to represent and to espouse the views of a majority of their constituents.” (/d. at 13.) Gerawan II heldthat 16 the same wastrue of the Plum Board, which was “comprised of and funded by plum producers,” and “is in that respect similar to the State Bar.” (Gerawan II, 33 Cal.4th at 28.) The Court then turned to the Secretary’s alternative argument that because “he mustultimately approve any generic advertising issued by the California Plum Marketing Board, which is itself organized pursuant to statute” the speechis “actually that of the State of California rather than of a private association.” (Jd. at 26.) The Court held that although the Secretary’s statutory authority was not enough, “the speech may nonetheless be considered government speech if in fact the message is decided upon by the Secretary or other government official pursuant to statutorily derived regulatory authority.” (Id. at 28 (emphasis added).) The answer would require further proceedings, the Court explained, because “there are factual questions that may be determinative of the outcome,” including “whether the Secretary’s approval of the marketing board’s messageis in fact pro forma,” and “whetherthe marketing board is in de facto control of the generic advertising program, and whetherthe speechis attributed to the government.” (/bid. (emphasis added).) It is clear on the facts here that the Table Grape Commission cannot satisfy Gerawan I’s standard for government speech. Butin disregard of Gerawan II’s emphasis on bothstatutorily-required and actual government control—andinstead relying on Ninth Circuit precedent underthe federal 17 constitution—the court below held that the Table Grape Commission’s promotional campaigns are government speech. The court explainedits rationale as follows: The detailed parameters and requirements imposed by the Legislature on the Commission and its messaging, the Secretary’s power to appoint and remove Commission members, and the Secretary’s authority to review the Commission’s messages and to reverse Commission actions, lead us to conclude, based on the statutory scheme, that the Commission’s promotional activities are effectively controlled by the state and therefore are governmentspeech. (Delano Farms, 185 Cal.Rptr.3d at 780.) This analysis flies in the face of GerawanII, which established that a message does not claim the mantle of government speech merely because it is issued by a government-created entity whose membersare chosen by the Secretary of CDFA.It is similarly not enough forthat entity to speak within general parameters prescribed by statute or with the possibility of pro forma approval from the Secretary of CDFA. A court mustfind that the message was “in fact ... decided upon by the Secretary or other governmentofficial pursuant to statutorily derived regulatory authority.” (Gerawan IJ, 33 Cal.4th at 28 (emphasis added).) Otherwise, the program is just a “mechanism ofself-regulation by the producers ... themselves” and not speech of the government. (Gerawan IJ, 24 Cal.4th at 503 n.8.) Underthe analysis of the court below, every marketing order will be exempt from constitutional scrutiny, because under those loose criteria 18 every generic advertising program conducted by a government-empowered industry board will be government speech. But underthat approach, there would have been no need for a remand in GerawanII to examine the facts; the case could have been decided by reference to the bare language of the statutes. Unlike in Gerawan II, here there is no uncertainty that the Secretary in fact exercised no control over the Commission, pro forma orotherwise. The facts are undisputed: “[T]he Secretary and the CDFA have,in practice, performed virtually no supervision of the Commission.” (Delano Farms, 586 F.3d at 1229.) Here, there is no statutory requirement that the Secretary of CDFA attend Commission meetings, and no evidencethatthe Secretary, his designees, or any other governmentally accountable official has ever done so. (Delano Farms, 586 F.3d at 1229-30.) The Secretary “does not review advertising and promotional activities, nor does the State review the Commission’s budgets.” (bid.) Finally, it is undisputed that the CDFA possesses few, if any, documentsthat relate to the Commission’s work. (/bid.) The Court of Appeal nonetheless deemed it sufficient that “CDFAretains the authority to review the Commission’s advertising,” even if it had no statutory obligation to do so, and likewise failed to do so in practice. (Delano Farms, 185 Cal.Rptr.3d at 779) (citing Delano Farms, 586 F.3d at 1229).) 19 B. The Court of Appeal Erroneously Deferred to the United States Court of Appeals for the Ninth Circuit ona Question of State Constitutional Law Instead of hewing to the dictates of GerawanII, the Court of Appeal deferred to the flawed reasoning of the Ninth Circuit, which held that the promotional campaigns of the Table Grape Commission were government speech exempt from the First Amendment. (Delano Farms, 586 F.3d at 1230.) In conflict with Gerawan I/’s emphasis on de facto control, the Ninth Circuit bypassed petitioners’ emphasis on the “State’s [lack of] effective control over the Commission.” (Jd. at 1229.) The Ninth Circuit “underscored that “passivity is not an indication that the government cannot exercise authority,” and held that the Commission’s theoretical powerto review the Commission’s work—even if not required, and never exercised—was enoughto shield the subsidies from constitutional review. (id. at 1230.) The Court of Appeal reasoned that “[w]hile California courts are not bound by decisions of the lower federal courts, they are persuasive and entitled to great weight.” (Delano Farms, 185 Cal.Rptr.3d at 780 (citing Barrett v. Rosenthal (2006) 40 Cal.4th 33).) This observation inverts the rules of deference. While Barrett concerned state court deference to lower federal courts’ interpretation of federal law, “state courts, in interpreting constitutional guarantees contained in state constitutions are independently responsible for safeguarding the rights of their citizens.” (People v. 20 Teresinski (1982) 30 Cal.3d 822, 835-36 (internal quotation marks omitied).) Federal courts “must defer to the judgment of a state court on interpretations of state law,” and not the reverse. (Bui v. Alarcon (9th Cir. 2000) 234 F.3d 1279.) Even the Ninth Circuit recognizes that “because interpreting state law is not a core function of the federal courts we lack the expertise to interpret state laws.” (Sarausad v. Porter (9th Cir. 2007) 503 F.3d 822, 825.) The duty of state courts to independently interpret state constitutional law in accordance with the precedents of this Court is especially clear with respect to Article I, because this Court has already clarified that the California State Constitution affords greater protection to free speech than the First Amendment does. Gerawan I emphasized that “article I’s free speech clause and its right to freedom of speech are not only as broad and as great as the First Amendment’s, they are even ‘broader’ and ‘greater.’” (Gerawan I, 24 Cal.4th at 486.) And in Gerawan II this Court held that although the compelled subsidies at issue there did not violate the First Amendment under Glickman, they required further review on remand under Article I’s free speech clause. (GerawanII, 33 Cal.4th 1.) In conflict with Gerawan II, the Ninth Circuit panel explicitly disregarded the “actual level of control evidenced in the record” that the Secretary of CDFA exercised over the Commission on the basis that “federal courts are ill-equipped to undertake”the task of “micro-managing 21 legislative and regulatory schemes.” (Delano Farms, 586 F.3d at 1230.) That is at odds with Garawan I/’s emphasis on “factual questions that may be determinative of the outcome,” including “whether the Secretary’s approval of the marketing board’s message is in fact pro forma,” and “whether the marketing board is in de facto control of the generic advertising program, and whether the speech is attributed to the government.” (Gerawan II, 33 Cal.4th at 28.) This Court’s review is therefore required. It is simply not sensible for a state court to defer to a federal court on an issuethat the federal court declaresitself ill-equipped to undertake. Cc. The Court of Appeal’s Holdingis in Conflict with the U.S. Supreme Court’s Decision in Johanns Review by this Court is all the more essential because the Ninth Circuit opinion to which the Court of Appeal deferred is manifestly inconsistent even with federal law, as authoritatively interpreted by the U.S. Supreme Court in Johanns. Johanns carefully distinguished between the speech of a democratically-controlled body and speech by an industry group that has been delegated the powerto coerce unwilling parties to pay for its messages, without genuine supervision or democratic accountability. Johanns’ interpretation of the First Amendmentis perfectly in line with this Court’s analysis of state constitutional law in Gerawan I and only confirms that review should be granted, and the decision below reversed. 22 As the California Court of Appeal recognized in Gallo Cattle, “Johanns holds that where commodity advertising is authorized and the basic message is prescribed by statute and where its content is overseen and subject to the control ofa politically accountable official, it is government speech.” (Gallo Cattle Co. v. Kawamura (2008) 159 Cal.App.4th 948, 957. (emphasis added).) That is not the case here. | Johanns involved a First Amendmentchallenge by beef producersto the compelled subsidy of beef-related promotional campaigns imposed under a federal program by the Cattlemen’s Beef Promotion and Research Board (“the Beef Board”). In deciding that the promotional messages of the Beef Board constituted the “Government’s own speech,”the Supreme Court considered whether “[t]he message of the promotional campaigns [was] effectively controlled by the Federal Government itself’ and concluded that “[t]he message set out in the beef promotions [was] from beginning to end the message established by the Federal Government.” (Johanns, 544 U.S. at 560-61.) A numberof features of the federal program at issue in Johanns, specifically the Secretary of Agriculture’s comprehensive control overall stages of the advertising regime, established that the beef promotions were the government’s message from “beginning to end.” Underthe governing statute, the Secretary of Agriculture appointed the members of the Beef Board and “imposed a $1-per-head assessment (or ‘checkoff’) on all sales 23 or importation of cattle and a comparable assessment on imported beef products.” (7d. at 554 & 560 n.4.) With respect to the advertising content, the Secretary specified in general terms what the promotional message should be and “exercise[d] final approval authority over every word used in every promotional campaign.” (Id. at 561 (emphasis added).) The Johanns Court concluded that, “[w]hen, as here, the governmentsets the overall message to be communicated and approves every word that is disseminated, it is not precluded from relying on the government-speech doctrine.” (/d. at 562 (emphasis added).) Here, by contrast, control over the content of the advertisements resides with the members of the Table Grape Commission—eighteen grape growers and a “public member”—and not the Secretary of CDFA. (Delano Farms, 185 Cal.Rptr.3d at 773.) The Commission has discretion to decide (within a statutory cap) how much moneyto assess from the shipment of grapes, andit is “[iJn the discretion of the commission” to decide how to spend that money. (Cal. Food & Agric. Code § 65572(i).) The Commission also has the power “in the event of nonpayment of any assessment” to “bring an action in its name for collection of such assessment, civil penalties or for injunctive relief.” (§ 65650.) The Commission has decided to use part of the funds for promotional campaigns and it decides the content of those advertisements. Most importantly, whereas the Secretary of Agriculture exercised “final 24 approval authority over every word” in the Beef Board’s promotional campaigns, (Johanns, 544 U.S. at 561), the Table Grape Commission runs its advertisements without the Secretary of CDFA’s sign off. (Cal. Food & Agric. Code § 65572(h-k).) Nothing prevents the growers who control the Commission, who are by definition competitors of the petitioners, from crafting messages that advance their own private interests—such as by portraying California table grapes as essentially a generic commodity, at odds with petitioners’ messaging which emphasizes differences in product quality and type—and forcing the entire industry to pay for them. (See 13 CT 3112:3-20; United Foods, 533 U.S. at 411 (unconstitutional for Mushroom Council to require “a discrete group ofcitizens[] to pay special subsidies for speech onthe side that it favors”).) As the Court of Appeal acknowledged,“[uJnlike the Beef Order, the Ketchum Act does not require any type of review by the Secretary overthe actual messages promulgated by the Commission.” (Delano Farms, 185 Cal.Rptr.3d at 779.) Yet despite recognizing that “there were some important differences between the Ketchum Act and the program considered in Johanns,” (id. at 779), the Court of Appeal inexplicably afforded these differences nolegal significance. Instead, it deferred to the Ninth Circuit’s conclusion that “these differences are legally insufficient to justify invalidating the Ketchum Act on First Amendment grounds.” (id. at 780 (citing Delano Farms, 586 F.3d at 1230).) But the Ninth Circuit got it wrong. In Johanns, 25 it was dispositive that the “message set out in the beef promotions [was] from beginning to end the message established by the Federal Government.” (Johanns, 544 U.S. at 560.) Not only did the Secretary of Agriculture select all members of the Beef Board, (id. at 560 n.4), and the statute set out in “general terms” what “the promotional campaigns shall contain,” (id. at 561), but by statutory requirement the “Secretary orhis designee ... approve[d] each project and, in the case of promotional materials, the content of each communication,” (id. at 554). The court below ignored these dispositive statutory differences, as well as the practical dissimilarities between the actual oversight exercised by the government in each case. It is clear, however, that the Court in Johanns was swayed not only by the Secretary of Agriculture’s statutory obligation to review the Beef Board’s work product, but also by the robust oversight the government in fact exercised over the Beef Board’s promotional campaigns. The Court cited record evidence which “demonstrate[d] that the Secretary exercise[d] final approval authority over every word used in every promotional campaign,” and it emphasized that the “proposed promotional messages [were] reviewed by Department officials both for substance and for wording, and some proposals [were] rejected or rewritten by the Department.” (Johanns, 544 U.S. at 561 (emphasis added).) What is more, in Johanns the Court stressed that “the Secretary’s role [is not] limited to final approval or rejection” of the 26 advertisements; rather, “Officials of the Department also attend and participate in the open meetings at which proposals are developed.” (Johanns, 544 U.S. at 561.) As in Gerawan II, these measures of supervision and control were indispensable to the analysis in Johanns, not incidental. Absent such control, the Supreme Court reasoned, the political safeguards necessary to justify immunity from constitutional review would be lacking. As the Supreme Court explained, “cases have justified compelled funding of government speech by pointing out that government speech is subject to democratic accountability.” (Johanns, 544 U.S. at 563.) In Johanns, the beef advertisements were “subject to political safeguards ... adequate to set them apart from private messages” only because the “Secretary of Agriculture, a politically accountable official, oversees the program, appoints and dismisses the key personnel, and retains absolute veto power over the advertisements’ content, right down to the wording.” (Id. at 563- 64.) Those political safeguards are missing here, where no politically accountable official has assumed responsibility, let alone any oversight, overthe content of the Commission’s speech. Indeed, the statutory scheme disclaims any liability on the part of the State of California for the acts of the commission orits contracts. (Cal. Food & Agric. Code § 65571.) And in this very case the Table Grape Commission is represented by private 27 counsel, in marked contrast to the Beef Board in Johanns, which was represented by the Department of Justice under the direction of the Secretary of Agriculture as client agency. (See Johanns, 544 U.S. 550.) Withoutpolitical safeguards, the government cannotforce a “discrete group of citizens” to fund the speech ofprivate interests. (United Foods, 533 U.S. at 411.) In United Foods, it was the message “that mushroomsare worth consuming whether or not they are branded.” (ibid) And here, the message is no different—the collective promotion of grapes as an undifferentiated commodity. (13 CT 3112:3-4.) As in United Foods, the producers’ discomfort with that message warrants constitutional review. (See 533 U.S. at 410-11 (“First Amendment concerns apply here because of the requirement that producers subsidize speech with which they disagree.”).) The Court of Appeal also erred by agreeing with the Ninth Circuit that there are two “ways in which the Commission’s activities could be classified as government speech, ie., if the Commission is itself a governmententity or if the Commission’s messageis effectively controlled by the state.” (Delano Farms, 185 Cal.Rptr.3d at 778) (citing Delano Farms, 586 F.3d at 1223).) The court’s acceptance of the proposition that the Commission’s activities could be classified as government speech “if the Commissionis itself a government entity” is inconsistent with Gerawan ZZ, and finds no support in Johanns. 28 Gerawan II held that the speech of the Plum Board was not necessarily government speech simply by virtue of being the message propagated by a government-created entity pursuant to a government program. Indeed, had that sufficed, there would have been no need to remand the case for further factfinding. Instead, the Court agreed with the U.S. Supreme Courtin Keller, that where a state-created entity is funded by a discrete professional circle and is not governedbystate officials, but only by representatives of private interests selected by state officials, its speech will be deemed private unless there are additional measures of actual government control. (See Gerawan II, 33 Cal.4th at 28 (“In the present case, the marketing board is comprised of and funded by plum producers, andis in that respect similarto the State Bar” in Keller.).) Similarly, Johanns did not distinguish Keller on the basis that the Beef Board was a governmententity, while the State Bar was not. If that were enough, the First Amendment claim in Johanns would have been summarily dispatched. Indeed, Johanns recognized that the “entity to which assessments are remitted is the Beef Board, all of whose members are appointed by the Secretary pursuantto law,” (Johanns, 544 U.S. at 560 n.4.), but that fact was relegated to a footnote and did not form the basis for the Court’s conclusion that the “message of the promotional campaigns [was] effectively controlled by the Federal Governmentitself.” (Jd. at 560.) Government control was not illustrated by the formation of the Beef Board 29 under federal law, northe appointment of its members by the Secretary of Agriculture, but by the Secretary’s oversight and review of the Beef Board’s messaging. Andit was this fact—“[t]his degree of governmental control over the message funded by the checkoff’—that “distinguish[ed] [Johanns] from Keller,” where the “state bar’s communicativeactivities ... [were] not developed underofficial government supervision.” (Jd. at 561- 62.) Together, Gerawan II, Keller, and Johanns teach us that resembling a “government agency” is not enough to claim the mantle of government speech. What matters are indicia of true political safeguards, including oversight and control by politically accountableofficials. (See id. at 563.) Johanns, like Gerawan II, turned not on corporate formality, but on whether the “promotional campaigns [were] effectively controlled by the Federal Governmentitself.” (Johanns, 544 U.S. at 560-61.) Thattest furnishes a true measure of whether the commodity advertising is subject to sufficient democratic accountability to warrant the protections a “government speech” label affords. (Cf North Carolina State Bd. of Dental Examinersv. F.T.C. (U.S. 2015) 135 S. Ct. 1101 (holding that North Carolina’s state agency forregulating the practice of dentistry could invoke state-action antitrust immunity only if it is subject to “active supervision by the State.”).) Especially when one considers the variety of corporations formed by the government, but free of substantial oversight by politically accountable officials, this limitation is vital. It would stretch the bounds of 30 common sense to conclude that the speech of government-formed corporations like Fannie Mae and Freddie Mac, the California State University, or the Medial Board of California is the speech of the government, or that the government could compel the funding of these corporations’ speech exempt from constitutional limitations. No one mistakes suchentities for a government mouthpiece nor presumesthat their expression is “speech by the government itself concerning public affairs,” rather than the speech of discrete or private interests. (Gerawan I, 24 Cal.4th at 503 n.8.) Approval of the corporation’s message must be traceable to politically accountable officials for the logic of the government speech doctrine to hold. Contrary to the Ninth Circuit’s analysis in Delano Farms, the Supreme Court’s decision in Lebron v. Nat. R.R. Passenger Corp. (1995) 513 U.S. 374, does not say otherwise. Lebron had nothing to do with the government speech doctrine. It held that Amtrak was a governmententity “for purposes of determining the constitutionalrights of citizens affected by its actions.” (/d. at 392.) Whereas here the “government entity” label would shield the promotional campaigns of the Table Grape Commission from constitutional review, in Lebron it was the opposite: only if Amtrak was a government entity could it be sued by an individual who was prevented from displaying a political message on train station billboard. The Court held that “[i]t surely cannot be that government, state or federal, 31 is able to evade the most solemn obligations imposed in the Constitution by simply resorting to the corporate form.” (/d. at 397.) Confirming that Lebron is inapposite to the government speech doctrine, Johanns did not cite Lebron but instead reinforced Keller’s holding that the speech of a government-formed corporation is not exempt from First Amendment scrutiny if its message is “not developed under official government supervision.” (Johanns, 544 U.S. at 561-62.) By ignoring that principle, the Court of Appeal departed from Johanns, Keller, and this Court’s decision in Gerawan I, and reached an improperresult on an important question of state constitutional law. This Court should grant the petition for review to reaffirm the importance both of independent state court interpretation of questions of state constitutional law and of democratic accountability before industry groups may be empowered to compel unwilling parties to subsidize the dissemination of their commercial messages. CONCLUSION Forthe foregoing reasons,Petitioners respectfully request that the Court grant this Petition for Review. 32 Dated: May 18, 2015 Respectfully submitted, er chaglhic onlcbsof MichaslMonell MICHAELW. McCONNELL** KIRKLAND & ELLIS LLP 655 15th Street NW #1200 Washington, D.C. 20005 Telephone: (202) 879-5000 Facsimile: (202) 879-5200 michael.mcconnell@kirkland.com DANIELLE R. SASSOON* Kirkland & Ellis LLP 601 Lexington Avenue New York, N.Y. 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-6460 danielle.sassoon@kirkland.com BRIAN C. LEIGHTON Attorney At Law 701 Pollasky Avenue Clovis, California 93612 Telephone: (559) 297-6190 Facsimile: (559) 297-6194 brian@lawleighton.com *Pro hac vice pending Attorneysfor Plaintiffs and Petitioners Delano Farms Company, Four Star Fruit, Inc., Gerawan Farming, Inc., Bidart Bros., and Blanc Vineyards CERTIFICATE OF WORD COUNT PURSUANT TO RULE RULE8.504(d)(1) Pursuant to California Rule of Court 8.504(d)(1), counsel for Petitioners hereby certifies that the number of words contained in this Petition for Review, including footnotes but excluding the Table of Contents, Table of Authorities, and this Certificate, is 7,419 words as calculated using the word count feature of the computer program used to prepare the brief. Dated: May 18, 2015 Respectfully submitted, pyfiaYongK. gubeolyf of taivherhnicer ichael W enerubchalf 34 PROOF OF SERVICE I declare that: I am employed in the County of Fresno, California. I am overthe age of eighteen years and not a party to the within action; my business address is 701 Pollasky, Clovis, California 93612. On May 18, 2015, I served a copy ofthe attached PETITION FOR REVIEW onthe interested parties herein .by placing a true copy thereof in a sealed envelope, fully prepaid, and addressed as follows: Mr. Seth P. Waxman WILMER CUTLER PICKERING HALE and DORR LLP 1875 Pennsylvania Avenue, N.W. Washington, D.C. 20006 Counsel for Defendant/Respondent California Table Grape Commission Mr. Robert Wilkinson BAKER, MANOCK & JENSEN 5260 N. Palm Avenue, 4" Floor Fresno, CA 93704 Co-Counsel for Defendant/Respondent California Table Grape Commission Mr. Howard A. Sagaser SAGASER & ASSOCIATES 7550 N. Palm Avenue, Suite 201 Fresno, CA 93711 Co-Counsel for Plaintiffs Mr. Jack Campbell DELANO FARMS COMPANY & BLANC VINEYARDS, LLC 10025 Reed Road Delano, CA 93215 Clients - Plaintiffs/Petitioners 35 Mr. Dan Gerawan GERAWAN FARMING 7108 N. Fresno, Suite 450° Fresno, California 93720 Client- Plaintiff/Petitioner Mr. Byron Campbell FOUR STAR FRUIT, INC. 2800 Road 136 Delano, CA 93215 Client- Plaintiff/Petitioner Messrs. John & Leonard Bidart Bidart Bros. 4813 Calloway Drive Bakersfield, CA 93312 Client - Plaintiff/Petitioner Honorable Judge Donald S. Black Fresno County Superior Court 1130 “O”Street Fresno, CA 93721-2220 Superior Court Judge Clerk of the Court COURT OF APPEAL FIFTH APPELLATE DISTRICT 2424 Ventura Street Fresno, CA 93721 Appellate Court I declare under penalty of perjury of the State of California that the foregoingis true and correct and that this Declaration was executed this 18" day ofMay, 2015, at Clovis, California. I declare that I am employed in the office of a memberofthe Bar of this Court at whose direction this service was made. Kimberly R. Barker 36 Me CERTIFIED FOR PUBLICATION Deputy IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT DELANO FARMS COMPANY et.al., F067956 Plaintiffs and Appellants, (Super. Ct. Nos. 636636-3 (Lead), Vv. 642546, 01CECG01127, 01CECG02292, 01CECG02289 & CALIFORNIA TABLE GRAPE 11CECG00178) COMMISSION, Defendant and Respondent. OPINION APPEAL from ajudgment of the Superior Court ofFresno County. Donald S. Black, Judge. Brian C. Leighton; Sagaser, Watkins & Wieland and Howard A. Sagaser for Plaintiffs and Appellants. Baker, Manock & Jensen, Robert D. Wilkinson; Wilmer Cutler Pickering Hale and Dorr, Seth P. Waxman, Brian M. Boynton, Thomas G. Saunders and Francesco Valentini for Defendant and Respondent. -00000- Appellants, Delano Farms Company, Four Star Fruit, Inc., Gerawan Farming, Inc., Bidart Bros. and Blanc Vineyards, LLC, challenge the constitutionality of the statutory EXHIBIT. A schemethat establishes respondent, the California Table Grape Commission (Commission), and requires table grape growers andpackersto fund the Commission’s promotionalactivities. Appellants assert that being compelled to fund the Commission’s generic advertising violates their rights to free speech, free association, due process, liberty and privacy under the California Constitution. Thetrial court granted summary judgment in the Commission’s favor. The court held that the Commission is a “governmental entity” and thusits speechis government speech that can be funded.with compelled assessments. Alternatively, the trial court applied the intermediate scrutiny test set forth in Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1, 22, and concludedthat the compelled funding schemedid notviolate the California Constitution. Appellants contendthetrial court erred in granting summary judgment. According to appellants, facts relied on by the Commission to demonstrate that the funding schemepassed constitutional muster underintermediate scrutiny were not proved by admissible evidence andare in dispute. Appellants further arguethe court erred in finding the speech was government speech because the Commission did not demonstrate either that the Commission is a government entity or that the government controlled the © Commission’s activities and speech. The Commission’s promotionalactivities constitute government speech. Accordingly, we will affirm the trial court’s grant of summary judgment on this ground. BACKGROUND 1. The Table Grape Commission. The Commission was created by legislation known as the Ketchum Actin 1967. (Food & Agr. Code,! § 65500 et seq.; United Farm Workers ofAmericav. Agricultural 1 All further statutory references are to the Food and Agricultural Code unless otherwise noted. Labor Relations Bd. (1995) 41 Cal.App.4th 303, 312.) The Legislature explainedthat “[g]rapes produced in California for fresh human consumption comprise one of the major agricultural crops of California, and the production and marketing of such grapesaffects the economy, welfare, standardofliving and health of a large numberofcitizens residing in this state.” (§ 65500, subd. (a).) Noting that individual producers are unable to maintain or expand present markets or develop new marketsresultingin “an unreasonable and unnecessary economic waste ofthe agricultural wealth ofthis state,” the Ketchum Act declared it was the policy ofthe state to aid producers of California fresh grapes. (§ 65500, subds. (c) & (g).) To carry out this policy, the Commission supports the fresh grape industry through advertising, marketing, education, research, and governmentrelations efforts. (§ 65572, subds. (h), (i) & (k).) The Commission’s duties are set forth in the legislation. The Commission’s workis funded primarily by assessments imposedonall shipments of California table grapes as required by the Ketchum Act. The Commission determines the amount ofthe assessment based on what is reasonably necessaryto payits obligations and to carry out the objects and purposes of the Ketchum Act, not to exceed a statutory amount per pound. (§ 65600.) These assessments are paid by shippers who are authorized to collect the assessments from the growers. (§§ 65604, 65605.) The Commission’s governing board is composed of 18 growers representing California’s six currently active table grape growing districts and one non-grower“public member.” (§§ 65550, 65553, 65575.1.) The California Department ofFood and Agriculture (CDFA)andthe Secretary of the CDFA (Secretary) retain authority over the Commission’sactivities through a few key functions. (Delano Farms Co. v. California Table Grape Comm’n (9th Cir. 2009) 586 F.3d 1219, 1221 (Delano Farms).) The CDFAoversees the nomination and selection of producerseligible to be appointed to the Commission board. (§§ 65559, 65559.5, 65560, 65562, 65563.) The Secretary not only appoints, but may also remove, every memberofthe Commission. (§§ 65550, 65575.1; Delano Farms, supra, 586 F.3d at p. 1221.) Further, the Secretary has the power to reverse any Commissionaction upon an appeal by a person aggrieved by such action. (§ 65650.5.) Additionally, the Commission’s books, records and accounts ofall ofits dealings are open to inspection and audit by the CDFA and the California Department ofFinance. (§ 65572, subd, (f).) The CDFA provides information and instructions to the Commission regarding marketing orders each month through the CDFA’s “Marketing Memo.” The CDFAalso retains the authority to review the Commission’s advertising. In its policy manual, the CDFAexpressly “reserves the right to exercise exceptional review of advertising and promotion messages whereverit deems such review is warranted. This mayinclude intervention in message developmentprior to placement of messagesin a commercial medium or venue.” (Cal. Department ofFood and Agriculture, Policies for Marketing Programs(4th ed. 2006) p. C-3.) Moreover, as with other state government entities, the Commission is subjectto the transparency, auditing and ethics regulations designed to promote public accountability. (Delano Farms, supra, 586 F.3d at p. 1221.) 2. The underlying actions. Appellants object to being required to pay assessments to fund the Commission’s activities.. They seek a judgment“declaring that the statutes establishing the Commission and definingits alleged authority, are unconstitutional in that they violate [appellants’] tights guaranteed under the Free Speech and Free Association Clauses ofthe California Constitution.” Appellants further allege that the law establishing the Commission exceeds the state’s police power. Appellants filed their original complaints between 1999 and 2001. These actions were stayed or dormant while the parties awaited decisions in a numberofstate and federal cases involving similar claims. Theparties filed amended complaints in 2011 and the cases were consolidated. The Commission moved for summary judgment. The Commission arguedthat appellants’ free speech and association claims were barred because the Commission’s speechactivities constitute government speech. Alternatively, the Commission asserted appellants’ free speech and association claims were barred because the Ketchum Act satisfies intermediate scrutiny. Finally, the Commission argued that appellants’ police powerclaimsfailed underthe rational basis standard of review. Thetrial court granted summary judgment in the Commission’s favor. The court concluded that the Commission is a government entity and thus the government speech defense was established. The court did not rule on the Commission’s alternative claim that the Commission’s speech is government speech becauseit is controlled by the CDFA. The court further foundthat the Ketchum Act survives both intermediate scrutiny and rational basis review. DISCUSSION 1. Standardofreview. A party moving for summary judgment bears the burden ofpersuadingthetrial court that there is no triable issue of material fact and thatit is entitled to judgment as a matter of law. (Brown v. Ransweiler (2009) 171 Cal.App.4th 516, 525 (Brown).) Once the moving party meets this initial burden, the burdenshifts to the opposingparty to establish, through competent and admissible evidence,that a triable issue of material fact still remains. If the movingparty establishesthe right to the entry ofjudgment as a matter of law, summary judgmentwill be granted. (/bid.) On appeal, the reviewing court must assumetherole ofthe trial court and reassess the merits of the motion. (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1601.) The appellate court applies the same legal standard asthe trial court to determine whether there are any genuine issues of material fact or whether the movingparty is entitled to judgmentas a matter of law. The court must determine whether the movingparty’s showingsatisfies its burden ofproof and justifies a judgmentin the movingparty’s favor. (Brown, supra, 171 Cal.App.4th at p. 526.) In doing so, the appellate court must view the evidence and the reasonableinferences therefrom in the light most favorable to the party opposing the summary judgment motion. (Essex Ins. Co. v. Heck (2010) 186 | Cal.App.4th 1513, 1522.) If summary judgmentis correct on any of the groundsasserted in the trial court, the appellate court must affirm, regardless ofthetrial court’s stated reasons. (Garrett v. Howmedica Osteonics Corp. (2013) 214 Cal.App.4th 173, 181.) 2. The constitutionalvalidity ofgeneric advertising assessments. The United States Supreme Court provided the foundation for the law on the constitutional validity of compulsory fees used to fund speech in Abood v. Detroit Board ofEducation (1977) 431 U.S. 209 (Abood) and Keller v. State Bar ofCalifornia (1990) 496 U.S. 1 (Keller). In Abood andKeller, the court “invalidated the use of the compulsory fees to fund union andbarspeech, respectively, on political matters not germaneto the regulatory interests that justified compelled membership.” (Gallo Cattle Co. v. Kawamura(2008) 159 Cal.App.4th948, 955-956 (Gallo Cattle).) Thereafter, both the United States Supreme Court and the California Supreme Court applied these precedents to generic commodity advertising funded by compulsory fees. In Glickman v. Wileman Brothers & Elliott, Inc. (1997) 521 U.S. 457 (Glickman), the United States Supreme Court considered the compulsory subsidy of commodity advertisingfor the first time. The Glickman majority found that compulsory fees for generic advertising under a federal marketing order that regulated California grown nectarines, peaches, pears and plumsdid notviolate the First Amendment. (Glickman, supra, 521 U.S. at pp. 472-473.) The majority notedthat this generic advertising was unquestionably germaneto the purposes ofthe marketing orders. Further, the assessments were notused to fund ideological activities. (Jd. at p. 472.) The court reasonedthatit was reviewing “a species of economic regulation that should enjoy the samestrong presumption ofvalidity” that is accorded “to other policy judgments made by Congress.” (Id. at p. 477.) Whenfaced with a program very similar to the one at issue in Glickman,the California Supreme Court reacheda different conclusion whenit applied the California Constitution. (Gerawan Farming,Inc. v. Lyons (2000) 24 Cal.4th 468 (Gerawan J).) Noting that article I’s free speech clause is broader and greaterthan the First Amendment, the Gerawan J court concludedthat the California Plum Marketing Agreement’s compelled funding of generic advertising implicated the plaintiff's right to freedom of speech underarticle I. (Gerawan I, supra, 24 Cal.4th at pp. 491, 517.) However, this holding did not conclude the case. “That the California Plum Marketing Program implicates Gerawan’s right to freedom of speech underarticle I does not mean that it violates such right.” (/d. at p. 517.) The court explained that there remained the questions of whattest is appropriate for use in determining a violation and whatprecise protection doesarticle I afford commercial speech. (Jbid.) Accordingly, the court remanded the matter to the Court ofAppeal to address these questions. The court did not consider “[w]hether, and how,article I’s free speech clause may accommodate government speech” because the issue was nottimely raised. (/d. at p. 515, fn 13.) The case returned to the California Supreme Court in Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1 (Gerawan ID). However,in the interim, the United States Supreme Court decided United States v. United Foods, Inc. (2001) 533 U.S. 405 (United Foods). In United Foods, the court considered the constitutional validity of a program that imposed mandatory assessments on handlers of fresh mushrooms. In practice, these assessments were spent almost exclusively on generic advertising to promote mushroom sales. The court concluded that compelled funding of commercial speech mustpass First Amendmentscrutiny. (United Foods, supra, 533 U.S. at p. 411.) Applyingtherule in Aboodand Keller, the court invalidated the mandatory assessments. Although Abood and Keller would permit the assessmentif it were “germaneto the larger regulatory purpose” (id. at p. 414) that justified the required association, the only regulatory purposeofthe mushroom program was fundingthe advertising schemein question. (Jd. at pp. 414-415.) The court distinguished Glickman onthe groundthat in Glickman the “compelled contributionsfor advertising were ‘part of a far broader regulatory systemthat does not principally concern speech.’” (dd. at p. 415.) Although the governmentarguedthatthe advertising was immunefrom scrutiny because it was government speech, the court declined to consider the claim becauseit was untimely. (Id. at pp. 416-417.) In Gerawan II the California Supreme Court heldthat, under the California Constitution, compelled fundingofgeneric advertising should be tested by the intermediate scrutiny standard articulated by the United States Supreme Court in Central Hudson Gas & Elec. v. Public Serv. Comm’n (1980) 447 U.S. 557. (GerawanII, supra, 33 Cal.4th at p.22.) The court noted that, despite the United States Supreme Court’s holding in Glickman, United Foods seemedto be in agreement with Gerawan J. The Gerawan II court described United Foods as holding “that the compelled funding of commercial speech does notviolate the First Amendment fit is part of a larger marketing program, such as wasthe case in Glickman, and ifthe speech is germaneto the purpose ofthe program. Butthat being the case, compelled funding of commercial speech mustbe said to implicate the First Amendment, i.e., such compelled funding requires a particular constitutional inquiry along the lines ofAbood andits progeny.” (Gerawan IT, supra, 33 Cal.4th at p. 17.) As to the Secretary’s governmentspeech claim, the Gerawan II court concluded that it could not be resolved onthepleadings and required further factfinding. (/d. at p. 28.) 3. Compelledgeneric advertising as government speech. In Johannsv. Livestock Marketing Assn. (2005) 544 U.S. 550 (Johanns), the United States Supreme Court directly addressed, for the first time, the government speech argument that had beenraised in both Glickman and United Foods. The court described the dispositive question as “whether the generic advertising at issue is the Government’s own speech andtherefore is exempt from First Amendmentscrutiny.” (Johanns, supra, 8. 544 U.S.at p. 553.) This case arose under the BeefPromotion and Research Act (Beef Act). The Johanns majority delineated two categories of cases where First Amendment challenges to allegedly compelled expression have been sustained: “true ‘compelled- speech’cases, in which an individual is obliged personally to express a message he disagrees with, imposed by the government; and ‘compelled-subsidy’ cases, in which an individual is required by the governmentto subsidize a message he disagrees with, expressed by a private entity.” (Johanns, supra, 544 U.S. at p. 557.) The court then noted “Wehave not heretofore considered the First Amendment consequences of government-compelled subsidy of the government’s own speech.” (Jbid.) However, the court pointed out, “‘[c]ompelled support of government’ -- even those programs of government one does not approve -- is of course perfectly constitutional, as every taxpayer mustattest.” (Ud. at p. 559.) The BeefAct announceda federal policy ofpromoting the marketing and consumption of beef. The BeefActdirects the Secretary ofAgriculture to implement this policy by issuing a BeefPromotion and Research Order (Beef Order) and by appointing a Cattlemen’s Beef Promotion and Research Board (Beef Board). Atissue in Johanns were beefpromotional campaigns designed by the Operating Committee ofthe BeefBoard. These campaigns were funded by mandatory assessments on beef producers. (Johanns, supra, 544 U.S.at p. 553.) The Johanns majority held that the beefpromotional campaigns were the government’s own speech. In reaching this conclusion, the court determinedthat the promotional campaigns’ message waseffectively controlled by the federal government itself. (Johanns, supra, 544 U.S.at p. 560.) First, Congress directed the creation ofthe promotional program andspecified that the program should include “‘paid advertising, to advance the image anddesirability of beef and beef products.’” (/d. at p. 561.) Second, “Congress and the Secretary have also specified, in general terms, what the promotional campaigns shall contain ... and what theyshall not.” (/bid.) “Thus, Congress and the Secretary have set out the overarching message and someofits elements, and they have left the development ofthe remainingdetails to an entity whose members are answerable to the Secretary ....” (Ibid.) Although theSecretary did not write the ad copy himself, the Secretary appointed half the membersofthe Operating Committee and all of the Operating Committee’s members were subject to removal by the Secretary. (Jd. at p. 560.) Additionally, all proposed promotional messages were reviewed by Department of Agriculture officials both for substance and for wording, and some proposals were rejected or rewritten by the Department. Finally, Department ofAgriculture officials attended and participated in the open meetings at which proposals were developed. (Id. at p. 561.) Therefore, the court held, the BeefBoard andthe Operating Committee could rely on the governmentspeech doctrine to preclude First Amendment scrutiny. (/d. at p. 562.) Finding that the promotional campaigns were effectively controlled by the government, the court declined to address whetherthe Operating Committee was a governmental or anongovernmental entity. (/d. at p. 560, fn. 4.) In Gallo Cattle, the Third District held that Johanns applies to the free speech clause underarticle I, section 2 of the California Constitution. (Gallo Cattle, supra, 159 Cal.App.4th at p. 955.) The Gallo Cattle court first noted that, in determining whether to follow the United States Supreme Court in matters concerning the free speech doctrine, the California Supreme Court has followed the reasoning set forth in People v. Teresinski (1982) 30 Cal.3d 822 (Teresinski). (Gallo Cattle, supra, 159 Cal.App.4th at p. 959.) In Teresinski, the court explained that decisions of the United States Supreme Court “are entitled to respectful consideration [citations] and oughtto be followed unless persuasive reasons are presented for taking a different course.” ‘(Teresinski, supra, 30 Cal.3d at p. 836.) These potentially persuasive reasonsfall into four categories: (1) something in the languageorhistory ofthe California provision suggests that the issue should be resolved differently than under the federal Constitution; (2) the high court 10. opinion limits rights established by earlier precedent in a mannerinconsistent with the spirit of the earlier opinion; (3) there are vigorous dissenting opinionsorincisive academic criticism of the high court opinion; and (4) following the federal rule would overturn established California doctrine affording greater rights. (Ud. at pp. 836-837.) Applying the four Teresinski categories, the Gallo Cattle court concludedthat the United States Supreme Court’s reasoning in Johanns should be followedin California. The court determined that the language and history of the California free speech provision do not compela different resolution from that under the federal Constitution. (Gallo Cattle, supra, 159 Cal.App.4th at pp. 959-961.) Further, there is no prior California holding concerning the application of the government speech doctrine. (Id. at p. 961.) Finally, the court found the majority’s reasoning in Johanns to be more persuasive than the dissent. We agree with the Gallo Cattle court’s analysis of this issue. Accordingly, we will apply Johanns here. 4, The Commission’s speech is government speech. In Delano Farms, the Ninth Circuit analyzed the constitutional validity of the compelled funding of generic advertising levied through the Commission. The court considered both ways in which the Commission’s activities could be classified as governmentspeech,i.e., if the Commissionis itself a governmententity or if the Commission’s message is effectively controlled by the state. The court concluded that . the Commission’s promotionalactivities constituted government speech undereither avenueofclassification and were therefore immunefrom a First Amendmentchallenge. (Delano Farms, supra, 586 F.3d at p. 1223.) | The Delano Farms court compared the frameworkofstatutes governing the Commission to the scheme addressed in Johanns. (Delano Farms, supra, 586 F.3dat pp. 1227-1228.) The court first noted that the founding of the Commission,its structure, and its relationship to the State of Californiais strikingly similar to the beefprogram at issue 11. in Johanns. Like the beefprogram in Johanns, the Commission was established bya legislative act. (Delano Farms, supra, at p. 1228.) Also similar to the beefprogram, the Legislature provided an overriding directive for the sorts of messages the Commission should promote. (/bid.) “[T]he Legislature intends that the commissions and councils operate primarily for the purpose of creating a morereceptive environmentfor the commodity and for the individual efforts of those personsin the industry, and thereby complimentindividual, targeted, and specific activities.” (§ 63901, subd. (e).) The Delano Farms court observedthat the California Legislature’s expectations for the Commission and its messaging were much morespecific thanthestated objectives of the BeefAct and Beef Order discussed in Johanns. (Delano Farms, supra, 586 F.3d at p. 1228.) The Legislature directed the Commission to focuson, “The promotion ofthe sale of fresh grapes for human consumption by means of advertising, dissemination of information on the manner and means ofproduction, and the care and effort required in the production of such grapes, the methodsandcare required in preparing and transporting such grapes to market, and the handling ofthe same in consuming markets, research respecting the health, food anddietetic value of California fresh grapes and the production, handling,transportation and marketing thereof, the dissemination of information respecting the results of such research, instruction ofthe wholesale andretail trade with respectto handling thereof, and the education andinstruction ofthe general public with referenceto the various varieties of California fresh grapes for human consumption, the time to use and consumeeachvariety and the uses to which each variety should be put, the dietetic and health valuethereof....” (§ 65500, subd.(£).) The court concludedthat the Legislature’s directive went much furtherin defining the Commission’s message than the Beef Order’s general directive that the beef promotional campaigns should discuss different types ofbeef and shouldrefrain from using brand names. (Delano Farms, supra, 586 F.3d at p. 1228.) The Delano Farms court further noted that, like the Operating Committee in Johanns,“the Commission is tasked with developing specific messaging campaigns.” 12. (Delano Farms, supra, 586 F.3d at p. 1228.) Importantly, the Secretary of the CDFA has the power to appoint and remove every memberofthe Commission. In contrast, the U.S. Secretary ofAgriculture only appoints half of the Beef Board Operating Committee members. (id. at pp. 1228-1229.) Further, the state possesses additional oversight powers over the Commission. The Commission’s books, records and accountsofall of its dealings are opento inspection and audit by the CDFAandthe California Department ofFinance. | The Delano Farms court acknowledged that there were some important differences between the Ketchum Act and the program considered in Johanns. Unlike the Beef Order, the Ketchum Actdoes not require any type of review by the Secretary over the actual messages promulgated by the Commission. The BeefBoard and the Operating Committee submit all plans to the U.S. Secretary ofAgriculture for final approval. (Delano Farms, supra, 586 F.3d at p. 1229.) Nevertheless, although not required, the CDFAretainsthe authority to review the Commission’s advertising. As discussed above, the CDFAreservesthe right to exercise exceptional review ofadvertising and promotion messages wherever it deems such review is warranted. Evenifthe Secretary does not exercise this authority andintervene in message development, he or she does not relinquish the powerto do so. (Cf. Paramount Land Co., LP v. Cal. Pistachio Comm’n (9th Cir. 2007) 491 F.3d 1003, 1011- 1012.) Moreover, the Secretary has the power to reverse any Commission action upon an appeal by a person aggrieved by such action. (§ 65650.5.) The Delano Farms court concluded that, while there are differences in the statutorily-prescribed oversight afforded to the governmentwith respectto the Commission and the beefprogram, these differencesare legally insufficientto justify invalidating the Ketchum Act on First Amendment grounds. (Delano Farms, supra, 586 F.3d at p. 1230.) In other words, under the Johannsanalysis, the state exercises effective control over the Commission’s activities such that “the Commission’s messageis ‘from 13. beginning to end’ that of the State. [Citations.]” (Delano Farms, supra, at pp. 1227- 1228.) While California courts are not bound by decisionsofthe lowerfederal courts, they are persuasive andentitled to great weight. (Barrett v. Rosenthal (2006) 40 Cal.4th 33, 58.) We find Delano Farms persuasive and will follow it in this case. The detailed parameters and requirements imposed by the Legislature on the Commission andits messaging, the Secretary’s powerto appoint and remove Commission members, and the Secretary’s authority to review the Commission’s messages and to reverse Commission actions, lead us to conclude, based on the statutory scheme, that the Commission’s promotional activities are effectively controlled by the state and therefore are government speech. As discussed above, the Johanns reasoning applies to free speech issues arising underthe California Constitution. Therefore, the Commission’s promotionalactivities, being immuneto challenge underthe First Amendmentpursuant to Johanns,are also immuneto challenge under the California Constitution. Accordingly, the Commissionis entitled to summary judgment on the ground that its messageis effectively controlled by the state. In light of this conclusion, we need not decide whether the Commission is a governmententity or whether the Ketchum Actsurvives intermediate scrutiny under Gerawan IT. 5. Summaryjudgment wasproperon appellants’ liberty and due process claims. Appellants contend thetrial court erred in granting summary judgment ontheir liberty and due process causes ofaction arising from their claim that the Ketchum Act exceeds the state’s police power. According to appellants, intermediate scrutiny, not rational basis, was the proper standard of review. Appellants further assert that there are disputed issues of material fact regarding this issue. “Whether a law is a constitutional exercise of the police poweris a judicial question.” (Massingill v. Department ofFood & Agriculture (2002) 102 Cal.App.4th 14. ~ 498, 504 (Massingill).) A law is presumedto be a valid exercise of police power and may not be condemned as improperif anyrational ground exists for its enactment. (In re Petersen (1958) 51 Cal.2d 177, 182.) The party challenging the law has the burdenofestablishingthatit does not reasonably relate to a legitimate government concern. (Massingill, supra, 102 Cal.App.4th at p. 504.) Therefore, to prevail, that party must demonstrate that the law is manifestly unreasonable,arbitrary or capricious, and has no realor substantial relation to the public health, safety, morals or general welfare. (Ibid.) In enacting the KetchumAct, the Legislature declared that“the production and marketing” of California table grapes was“affected with a public interest” andthatthe Ketchum Act was “enacted in the exercise ofthe police powerofthis state for the purposeofprotecting the health, peace, safety and general welfare ofthe people ofthis state.” (§ 65500, subd. (h).) The Legislature has found, and indeedit is beyond dispute, that agriculture is the state’s most vital industry andis integralto its economy. (§ 63901; Hess Collection Winery v. Agricultural Labor Relations Bd. (2006) 140 Cal.App.4th 1584, 1603.) An act promoting table grapes, one ofthe major crops produced in California, for the purpose ofprotecting and enhancingthe reputation of California table grapesis reasonablyrelated to the goal ofprotecting the state’s general welfare. Appellants have not demonstrated otherwise. They have not shownthat the Ketchum Actis unreasonable, arbitrary or capricious and does not reasonablyrelate to the legitimate government concern ofpromotin and rotectingCalifornia agriculture. Rather, appellants t is-particular:exercise ofpolice power requires a morestringent incorrectly ¢axpile that: review. Appellantsalso erroneously attempt to place the burden on the Commission to demonstratethatthattheKetchumAct remains a valid exercise ofthe state’s police POWET, reeicvranie: etme 15. Since appellants did not meettheir burden,thetrial court properly granted summary judgmenton their police powerviolation claims. DISPOSITION The judgmentis affirmed. Costs on appeal are awardedto respondent. PEcen— LEVY,Acting PJ. WE CONCUR Naw KANE, J.\— [wie PENA, J. | jEceve APR -8 2015 16.