DELANO FARMS COMPANY v. CALIFORNIA TABLE GRAPE COMMISSION

Appellants’ Response to Amicus Curiae Brief

Cal.Mar 21, 2016

SUPREME COURT COPY IN THE SUPREME COURT OF CALIFORNIA Case No. 8226538 DELANO FARMS COMPANY, FOUR STAR FRUIT,INC., GERAWAN FARMING,INC., BIDART BROS., AND BLANC VINEYARDS Plaintiffs and Petitioners, SUPREME COURT CALIFORNIA TABLE GRAPE COMMISSION MAR 9 1 201R Defendant and Respondent. _ Frank A. Molar atSrk m AFTER A DECISION BY THE COURT OF APPEAL, FIFTH DISTRICT Case No. F067956 Petitioners’ Answer to the Amicus Curiae Brief of the California Departmentof Food and Agriculture 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.meconnell@kirkland.com brian@lawleighton.com DANIELLE R. SASSOON* Kirkland & Ellis LLP 601 Lexington Avenue NewYork, N.Y. 10022 *Admitted hac vi T: (212) 446-4800 / F: 212-446-6460 mitted pro hac vice danielle.sassoon@kirkland.com Attorneysfor Plaintiffs and Petitioners Delano Farms Company, Four Star Fruit, Inc., Gerawan Farming, Inc., Bidart Bros., and Blanc Vineyards TABLE OF CONTENTS INTRODUCTION.....cscccsecseesessssssesecsessscsssessssssssussnsesarsusausssussssesssesecstsseeeteeeceseecess 1 ARGUMENT......ecsccssssessssssssssseseesessssssssecsecssecsssssssssssuessesucsasssusesasssessssssesissuseecescece 2 A, CDFAHighlights that the TGC is an Outlier Among California Agricultural Committees that are Typically Controlled by the Government ..........c..cccscsessssssssstscsessesesesceseesceces 2 B. CDFAFails to Demonstrate that the TGC’s Promotional Campaigns are Government Speech ...0.......cccsscssscssesessssssseseseseeeceses 6 CONCLUSION...eeceeccessssessseesesssesnssssstsrssssassussesasstasssssssusssssussestesavereseeseccececee, 11 TABLE OF AUTHORITIES Cases Country Eggs Inc. v. Kawamura, (2005) 129 Cal.App.4th 589 ou....sccssssssssccssssssssssssssssssessseeeeccesseccce Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1 vocccccsccccccssessssssssesessssusssssssssasscsssssteveescessecessece Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468 oo... ecsccssecssccssssssssesssssecssssessesseessssssteecessccce Johanns vy. Livestock Marketing Assn. (2005) 544 U.S. 550 .ccccccsssssssscsssssssssssesesssssssssssssssssseeeeeeceeseeccc Keller v. State Bar ofCalifornia (1990) 496 U.S. Lecceccccccsssssessscssssssssstussssssssesssessstetiseneeescceseeece New York Times Co. v. Sullivan (1964) 376 U.S. 254 ....ccccccscsssseseccssssssssssssssssesesssesesssssessesseeecesseccee Pleasant Grove City, Utah v. Summum (2009) 555 U.S. 460....ccccceccssssssscssssssssessssssssessssssessssssseveeseeceeseecces Walker v. Texas Division, Sons ofConfederate Veterans, Inc. (2015) 135 S.Ct. 2239... csccsssssssssssssssssssssssssssssssisssesesesecessseeece Statutes Cal. Food & Agric. Code § 65650.5 v..ceccccccssssscsssssssssssesssesseseesescececece. Other Authorities Respondents’Br.filed in Country Eggs Inc. v. Kawamura, (2005) 129 CalApp.4th 589 ou... scccscscccssssssccsscssssscsssesssseccccseseccce il Page(s) wteeneeeeseeeseeees 11 eeseseeeeneeeeeeeees 8 seeeseeeeeesateetsces 7 eeveeeeeanees 7, 8,9 seeneeeseeeseoeeeeees 7 seesesesesecseenees 10 eeeeeseeees passim weeeeeveeseneesees 10 seseeeeseesseeeneeees 5 weeeeeseeeaeeesnees 1] So s S S R I G E ua G S He INTRODUCTION Unlike genuine government agencies, the Table Grape Commission (“TGC”) is not representedin litigation by the State Attorney General—just as it receives no tax dollars, its budget is not subject to the legislative appropriations process or administrative review, and it is not audited by government auditors. Indeed, until this late stage in the litigation, the State of California and its relevant agency, the California Department of Food and Agriculture (“CDFA”), had stayed out of this case. That seemed odd, since Respondent claims to be engaging in “government speech.” Now CDFA, represented by the Attorney General, has filed a brief amicus curiae, ostensibly in support of the TGC. But that brief is primarily focused on reasons why CDFA’s other programs should survive even if this Court holds that the TGC is too independent of governmentcontrolto render its promotional efforts “government speech.” It provides no support for Respondent’s claim of speaking in the nameofthe People of California. First, CDFA explains that California uses a variety of institutional structures to regulate or promote agricultural commodities in the State. This explanation highlights the anomalous character of the TGC among agricultural promotion programs in California. By CDFA’s ownaccount, the TGCis virtually unique in its lack of review or oversight by CDFA. (See CDFABr.at 8-15.) If the legislature wished to subject the TGC to genuine control by a democratically accountable officer, it could easily do so, following the models used for other commodity promotion programs, as discussed in CDFA’s brief. There is no practical—let alone compelling—reason why promotion of table grapes needs to be outsourced to a_ private, unaccountable industry group. Second, CDFA endorses respondent’s “government entity” theory for government speech—but the authority it cites, Pleasant Grove City, Utah v. Summum (2009) 555 U.S. 460, largely refutes the TGC’sposition. (See CDFA Br. at 15-16.) Summum supports the conclusion that without actual CDFA control of the TGC’s speech, and without attribution of the speech to the government, the TGC cannot invoke a government speech defense. ARGUMENT A. CDFA Highlights that the TGC is an Outlier Among California Agricultural Committees that are Typically Controlled by the Government CDFA devotes a substantial portion of its brief to explaining the importance of agricultural industries to California’s economy, but this case is not a referendum on the value of California’s agricultural industry. (See CDFA Br. at 4-9.) CDFA’s excursus into economic geography does nothing to explain why out of 400 crops grown and marketedin thisfertile state, only 31 are deemed to require collectivization of marketing. (Why fresh carrots but not green beans? Whycherries but not plums, walnuts but not pecans, table grapes but not tangelos, blueberries, or Valencia oranges?) Nordoesit explain why some marketing programs(e.g., pears and salmon) are tightly controlled by CDFA while table grape promotion is outsourced to a largely autonomousindustry-dominated board. There is no consistent threador rational pattern to these variegated arrangements, and CDFA does not even attemptto offer one. This appealis about the structure of only one marketing program. It presents the narrow question whether the promotional campaigns of the I'GC, which are not reviewed or approved by any politically accountable government agency, are nonetheless government speech, such that TGC can compelpetitioners to subsidize its speech without having to satisfy ordinary First Amendmentstandards for compelled speech. The CDFA amicusbrief strongly suggests the answerto that question is “no.” CDFA candidly states that its reason for filing an amicusbriefat this late stage in the litigation is its concern that “the legal principles established [in this case] may also apply to other marketing programs, to the extent their authorizing legislation, purpose and function, and messages are similar.” (CDFA Br. at 2.) Fair enough. CDFA then goes on to describe how the TGC operates differently from other agricultural marketing programs in the State, which are designed on a “commodity-specific”basis. (/bid.) CDFA catalogues the “wide array of marketing programs,” (id. at 3 8), clarifies that “these programs take many forms,”(id. at 9), and explains that the “Legislature has also developed new administrative structures for these programs,”(id. at 10). An entire section of the brief is devoted to the proposition that “Agricultural Marketing Programs Operate Through a Variety ofMeans.” (Jbid.) Just so. The biggest difference among the programslies in whether they are operationally overseen by a democratically accountable state agency—the very difference that this case is about. In its understandable desire that other programs not be tarred with the table grapes brush, CDFA confirmsthat the TGCis an outlier. CDFA describes three different operative structures in California used to regulate and promote agricultural commodities: advisory boards, commissions, and councils. (/d. at 10.) Advisory boards and councils categorically lack the independent power to implement promotional programs. Advisory boards are just that—“‘advisory only.” (/d. at 11.) As CDFAputsit, they “have no powers independent of the Department.” (Jbid.) They may “recommend programs to the Department, and administer these programs subject to the Department’s approval.” (Jbid.) Similarly, “councils lack statutory authority to independently design andcarry out their programs.” (Id. at 13- 14.) Like the boards, “councils make recommendations ... for their respective commodities, and administer those programs subject to the Department’s approval.” (/d. at 14.) The dependence of boards and councils on CDFA approval sits in stark contrast to the practical and legal status of the TGC. The Secretary of CDFA exercises no de facto or routine control over the TGC’s advertisement campaigns and has nostatutory authority to do so. CDFA has authority to review TGC advertising messages only upon petition by an “aggrieved party”——and then its review is limited to certain narrow legal defects. (Cal. Food & Agric. Code § 65650.5.) As the factual record of this case makes clear, that review has never happened. (See, e.g., Petitioners’ Opening Brief on the Merits (“Pet. Br.”) at 10, 14; Petitioners’ Reply to Respondent’s Answer Brief on the Merits (“Pet. Reply”) at 14.) CDFA thus implicitly makes Petitioners’ point: it points to not a single instance where the Secretary or his subordinates actually approved or disapproved (or even read) the TGC’s advertising content. As CDFA is at pains to establish, even the marketing programs conducted by commissions are distinguishable from the TGC. CDFA explains that “the purpose and function of the commissions vary according to the laws that created them,” and the legislature has “provided the Department with a wide range of mechanisms for overseeing commissions.” (CDFA Br. at 12.) The Ketchum Act, which created the TGC, was the first of the collective marketing programs passed by the legislature; subsequent agricultural research and advertising programs have invariably entailed greater governmental involvement, oversight, and 5 control. As CDFA explains, for example, unlike the TGC, other commissions are required to submit for CDFA approval annual statements of contemplatedactivity, including marketing, and annual budgets. (d. at 13.) Notably, CDFA does not mention even one commission that, like the . TGC, runs promotional campaigns with no government oversight or whose marketing program would bedirectly jeopardized bya reversalhere. CDFA’s amicus brief confirms not only that is it “eminently practicable to design a commodity program with the government oversight necessary to confer constitutional immunity on a program’s speech,” (Pet. Reply at 18), but also that the California legislature has done exactly that in many instances. The programsthat operate with actual CDFA supervision and true political accountability will not be disturbed if the Court reverses the decision below on the rationale advancedby petitioners here. B. CDFAFails to Demonstrate that the TGC’s Promotional Campaigns are Government Speech Parroting Respondent’s brief, CDFA argues that “[t]here are two independent bases upon which an agricultural marketing program can be considered speech of the government,”the first being “if the promoting speakeris itself a governmental entity.” (CDFA Br. at 15.) The authority on which CDFArests that argument, however, demonstrates the weakness of the argument. CDFArelies on Pleasant Grove City, Utah v. Summum (2009) 555 U.S. 460. Summum held that the monuments chosen by the government for display in a public park qualify as government speech even though they were originally donated by private groups. When the Court observed in the opinion that “a governmententity has the right to ‘speak for itself,’” (CDFA Br. at 15 (quoting Summum, 555 U.S.at 467)), it took as a given that a government entity, for purposes of the government speech doctrine, mustbe a politically accountable body. The Court explained: “of course, a governmententity is ultimately accountable to the electorate and the political processfor its advocacy.” (Summum, 555 U.S. at 468 (internal quotation marks omitted) (emphasis added).) That is decidedly not the case here. As this Court already recognized, these marketing bodies are “not so much a mechanism of regulation ... of an agricultural commodity by a governmental agency, as a mechanism ofself-regulation by the producers and handlers themselves.” (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 503 n.8.) And even CDFAdescribes Johanns as a case involving the government’s effort to “enlist a private speaker.” (CDFA Br. at 16; see also Johanns v. Livestock Marketing Assn. (2005) 544 U.S. 550, 562 (explaining that the government “solicit[ed] assistance from nongovernmental sources [the Beef Board] in developing specific messages”).)! If the Beef Board in Johanns | Johanns did not, as CDFA claims, distinguish the State Bar in Kellerv. State Bar of California (1990) 496 U.S. 1 (which the U.S. Supreme Court held was not a governmententity for First Amendment purposes) from all agricultural marketing boards and commissions. (See CDFA 7 was “a private speaker,” as CDFA acknowledges, the TGC must be a “private speaker”—or a “nongovernmental speaker” in the U.S. Supreme Court’s words—here. Moreover, Summum recognized that an essential component of the political accountability that justifies the government speech exception to the First Amendmentis that the audience for the message must reasonably perceive that message as emanating from the government. As the Court emphasized, the city “has selected those monumentsthat it wants to display for the purpose of presenting the image of the City that it wishes to project to all who frequent the park.” (Summum, 555 U.S. at 473.) It was important to the holding of the Court that viewers attributed the monuments’ messages to the city, as owner of the park: [P]ersons who observe donated monuments routinely—and reasonably—interpret them as conveying some message on the property owners’ behalf. In this context, there is little chance that observers will fail to appreciate the identity of the speaker. ... Public parks are often closely identified in the public mind with the government unit that ownsthe land. (Summum, 555 U.S. at 471-72.) This Court made the same point in Gerawan II. (See Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1, 28; Pet. Br. at 25-27.) Br. at 17.) Rather, it distinguished the circumstances in Johanns from those in Keller because of the “degree ofgovernment control over the message” of the Beef Board, which was “developed under official government supervision.” (Johanns, 544 U.S. at 561-62.) Because the “monuments that are accepted ... are meantto convey and have the effect of conveying a government message,” the Court concluded that they “constitute government speech.” (Summum, 555 U‘S. at 472 (emphasis added); see also id. at 481-82 (Stevens, J., concurring) (“Nor is it likely, given the near certainty that observers will associate permanent displays with the governmental property owner, that the governmentwill be able to avoid political accountability for the views that it endorses or expresses through this means.”).) CDFA’s effort to discredit the attribution requirement is thus refuted by the very authority on whichit relies. (See CDFA Br. at 18-19.) Finally, the Court in Summum expressly endorsed the reasoning in Johanns that if the government “solicits assistance from nongovernmental sources” to develop a message, (Summum, 555 U.S. at 468 (quoting Johanns, 544 U.S. at 562)), it must “approve[] every word that is disseminated,” (Johanns, 544 U.S. at 562), for the speech to qualify as the government’s own. It wascritical to the holding in Summum that the city, in choosing which privately-designed monumentsto placein the park, had (as in Johanns) “‘effectively controlled’ the messages sent by the monuments in the Park by exercising ‘final approval authority’ over their selection.” (Summum, 555 U.S.at 473 (quoting Johanns, 544 U.S. at 560- 61).) That is not an alternative, independentbasis for a government speech defense, but a necessary limiting condition where, as here, the speakeris 9 not itself a politically-accountable body. (See Pet. Br. at 17-27.) On the facts, CDFA does not dispute that its Secretary has never reviewed or approved a single TGC advertisement before it has been disseminated. CDFA attempts to distinguish Walker v. Texas Division, Sons of Confederate Veterans, Inc. (2015) 135 S.Ct. 2239, on the superficial basis that Walker involved specialty license plates, whereas this case involves market promotion messages. (CDFA Br. at 19.) Thatis like distinguishing New York Times Company v. Sullivan (1964) 376 U.S. 254, on the basis that it involved a newspaper rather than a magazine. Even in this final argument, CDFA turns out to support Petitioner rather than Respondent. As CDFA describes Walker, “the State’s review and approval of the messages” in Walker “transformed what were originally private messages into government speech.” (CDFA Br. at 19.) Because in this case there was no CDFA “review and approval of the messages,” the TGC’s industry- contrived messages were not“transformed”into “government speech.” Remarkably for an amicus purportedly in support of the Respondent, CDFA concedesthat unlike advisory boards that operate under the umbrella of the CDFA, commissionslike the TGC are “not part of the Department,” but are “instead separate ... entities.” (Jd. at 12.) For purposesofthis case, CDFA claims that commissions are “separate government entities,” (ibid. (emphasis added)), but elsewhere it has seized on the legal difference between these autonomous commissions and the State to foreswearstate 10 liability for the commissions’ actions. In Country Eggs, Inc. v. Kawamura, for example, CDFA successfully took the position that the State should not be required to pay a refund assessment owed by the Egg Commission because the commission wasso separate and independentthat the State was not liable for its debt. (See (2005) 129 Cal.App.4th 589.) CDFA argued, among other things, that the “State retained virtually no control over the Commission orits activities” and that the Egg Commission “acted in an independent, not an advisory role, when administering its program.” (See Respondents’ Br. filed in Country Eggs Inc. v. Kawamura, at 24-25, attached as Appendix A.) If an industry-run commissionis not part of the State for purposesofliability, it is not part of the State for purposesof the governmentspeech doctrine. CONCLUSION For the foregoing reasons, the judgment of the Court of Appeal should bereversed and the case remandedfor further proceedings. 11 Dated: March 18, 2016 Respectfully submitted, Jenstagltmfp Michael Ww. Mecomell ICHAEL W. McCONNELL* KIRKLAND & ELLIS LLP 655 15th Street NW #1200 Washington, D.C. 20005 michael.mceconnell@kirkland.com DANIELLE R. SASSOON* Kirkland & Ellis LLP 601 Lexington Avenue New York, N.Y. 10022 danielle.sassoon@kirkland.com BRIAN C. LEIGHTON Attorney At Law 701 Pollasky Avenue Clovis, California 93612 brian@lawleighton.com *Admitted pro hac vice Attorneysfor Plaintiffs and Petitioners Delano Farms Company, Four Star Fruit, Inc., Gerawan Farming, Inc., Bidart Bros., and Blanc Vineyards 12 CERTIFICATE OF WORD COUNT Counsel for Petitioners hereby certifies that the number of words contained in this ANSWER TO THE AMICUS CURIAE BRIEF OF THE CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE, including footnotes but excluding the Table of Contents, Table of Authorities, Issues on Review, and this Certificate, is 2,501 words as calculated using the word count feature of the computer program used to preparethe brief. Dated: March 18, 2016 Respectfully submitted, By: Michael W. 13 U). MeConmal PROOF OF SERVICE I declare that: I am employed in the County ofFresno, California. I am over the age of eighteen years and not a party to the within action; my business address is 701 Pollasky, Clovis, California 93612. On March 18, 2016, I served a copy ofthe attached ANSWER TO THE AMICUS CURIAE BRIEF OF THE CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE ontheinterested 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 14 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 ofthe Court COURT OF APPEAL FIFTH APPELLATE DISTRICT 2424 Ventura Street Fresno, CA 93721 Appellate Court I declare under penalty ofperjury of the State of California that the foregoing is true andcorrect andthat this Declaration was executedthis 18 day of March, 2016, at Clovis, California. I declare that I am employed in the office of a memberofthe Barofthis Court at whose directionthis service was made. Kimberly R. 15 Appendix A IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT COUNTRYEGGS,INC., a California corporation, Plaintiff and Appellant, Vv. oo Case No. C046153 A.G. KAWAMURA,in hisofficial capacity as the Secretary of the California Department of Food and Agriculture; CALIFORNIA DEPARTMENTOF FOOD AND AGRICULTURE;and STATE OF CALIFORNIA, Defendants and Respondents. Sacramento County Superior Court No. 02AS804521 The Honorable Loren E. McMaster, Judge RESPONDENTS’ BRIEF BILL LOCKYER Attorney General of the State of California MARY E. HACKENBRACHT Senior Assistant Attorney General LINDA L. BERG Deputy Attorney General State Bar No. 194667 1300 I Street P.O. Box 944255 Sacramento, CA 94244-2550 Telephone: (916) 327-5484 Fax: 916) 327-2319 Attomeys for Defendants and Respondents | scanned by LIBRARY © TABLE OF CONTENTS Page INTRODUCTION. «1.22... 0 0. eee ec cece eee e cee ee ce. ] PROCEDURAL. BACKGROUND........ 000... cece cece eee 4 Country Eggs I Case—Country Eggs Enters Into a Federal Court Voluntary Stipulated Injunction Thatit Will Pay its Assessments. .. 4 Country Eggs IT Case—Country Eggs Prevails in the State Trial Court, and Obtains a Monetary Judgment Against the Commission. ..... . 8 The Commission Suspends Its Operations and the Appeals of Country Eggs If Arc Dismissed. ....................-...... 10 Country Eggs Brings the Present Action to Compelthe State and the Departmentto Pay the Portionofthe Judgmentthat it Did Not Collect from the Egg Commission. .............0..0.00.0 000000... 1} ARGUMENT. «2.2.0.0... cece eee e cece ec ee coe. 14 Standard of Review. «02.0... eee ccc cece cece eee. 14 I. The State Defendants Are Not Responsible for Refunds of Assessments That Were Paid to the Egg Commission. .... 15 A. McKesson Does Not RequiretheState or the Secretary to Refund Assessments That Were Paid to Other Public Entities. 6...eeecece cece. 16 B. The Commission Is an Independent Entity; Therefore State Is Not Liable for a Refund ofthe Assessments Paid to the Commission. ...................... 22 “IL. Country Eggs’ Claims Under McKesson Fail Because Country Eggs Seeks a Refund ofAssessments That Were Paid Pursuant to a Stipulated Injunction Entered into Voluntarily. ...... 29 CONCLUSION. . 1.20...ccc cece seen eee ccc. 34 scanned by LIBRARY = TABLE OF AUTHORITIES Page Cases Agostini v. Felton (1997) 521 US. 2032.cceee c eee. 32 Blue Diamond Coal Co. v. Trustees ofthe UMWA Combined Benefit Fund (6th Cir. 2001) 249 F.3d 519.2eeeee32, 33 Butcher v. Truck Insurance Exchange (2000) 77 Cal.App.4th 14422.000...ece eee. 31 Cal-Almond v. Department ofAgriculture (9th Cir. 1993) 14 F.3d 429 2.0.eeeeee 19, 20 Cal-Almond v. United States Department ofAgriculture (9th Cir. 1995) 67 F.3d 874 200. cece ce eee eee Passim Central Hudson Gas & Elec. v. Public Serv. Comm'n (1980) 447 U.S. 5572. ecee eee. 5 City ofSt. Louis v. Praprotnik (1988) 485 U.S. 112...0cece ccc nec c eee eeee. 26 Cochran v. Veneman (3d Cir. 2004) 359 F.3d 263...... 0.0.0 c cee cece ee cece ee eee 5 Coltec Industries, Inc. v. Hobgood (3d Cir. 2001) 280 F.3d 262 2.0.0.0 00cee cc ccc eee 31 Craddock v. Kmart Corp. (2001) 89 Cal.App.4th 1300.00... cece cee ceca 27 Eastern Enterprises v. Apel (1998) 524 U.S. 4982.02eee eee eee eee 32, 33 General Motors Corporation v. City and County ofSan Francisco (1999) 69 Cal.App.4th 448 20...cee eee eee 18 li scanned by LIBRARY = Page Gerawan Farming, Inc. v. Kawamura (2004) 33 Cal.4th 1...cee cece cee eee. 5 Gerawan Farming,Inc. v. Lyons (2000) 24 Cal.4th468.2.eeeeee, 5-6 Ghirardo v. Antonioli (1996) 14 Cal.4th39.00cece cece cece ee, 16 Glickman v. Wileman Bros. & Elliott, Inc. (1997) S21 U.S. 457.0ccc cee ee eee. 4,5, 6, 18, 19 Hess v. Port Authority Trans-Hudson Corporation (1994) 513 U.S. 30...cece cece eee ee ee.17, 26 ITSI T.V. Productions, Inc. v. Agricultural Associations (9th Cir. 1993) 3 F.3d 1289 22...17 Katzberg v. Regents ofthe University ofCalifornia (2002) 29 Cal.4th 300.0...ccc eee ee eee ee. 14 Kirchman v. Lake Elsinore Unified School District (2000) 83 Cal-App.4th 1098 2...ceceeee, 18 Livestock Marketing Association v. United States Department of Agriculture (8th Cir. 2003) 335 F.3d 71 2...cee eee eee eee. 5 Lunardi v. Great-West Life Assurance Co. (1995) 37Cal.App.4th 807 .......0..0....00.0000-. een eee vee eae 14 Lynch v. San Francisco Housing Authority (1997) 55 Cal.App.4th 527 20...cece cece cece. 28 Marin County v. Superior Court ofMarin County (1960) 53 Cal.2d633.222.000026, 27 Martin v. Martin (1970) 2 Cal.3d 752 2.cece ccc cece cece. 3] aT scanned by LIBRARY & Page Maryland Dept. ofHuman Resourcesv. Department ofHealth and Human Services (D.C.Cir. 1985) 763 F.2d 1441.0. 20 Massachusetts Farmers Defense Committee v. United States (1939)26 F.Supp. 941. 00eceec cece cece e, 25 McKesson Corp. v. Division ofAlcoholic Beverages & Tobacco (1990) 496 U.S. 18.20.0000... bee eee ee eee eee eee Passim People v. Bravo (1987) 43 Cal.3d 600 22...cece ce cece cece ee. 30 Philippine Export and Foreign Loan Guarantee Corporationv. Chuidian (1990) 218 Cal.App.3d 1058...eeeeee 30 Reyes v. Kosha (1998) 65 Cal-App.4th 451.002...0ccee eee. 14 Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847 20...cece cece. 14 Sullivan y. County ofLos Angeles (1974) 12 Cal.3d 710 2...ceceeee. 17 Tiermanv. Trustees ofCal. State University & Colleges (1982) 33 Cal.3d 211.20. cece cece cee cece eee. 15 Ting v. United States (9th Cir. 1991) 927 F.2d 1504 ........... cee ee ee eee eee 12 United States v. Frame (3d Cir. 1989) 885 F.2d 1119.20.Seek eee 4 United States v. United Foods, Inc. (2001) 533 U.S. 405 2.20eceee. 5 IV scanned by LIBRARY a Page United States Department ofAgriculture y. Cal-Almond, Inc. (1997) 521 U.S. VIB... cece cece ee cece eee. 18, 19 United States v. Cal-Almond, Inc. (9th Cir. 1996) 102 F.3d999.0000. 18 United States v. Mississippi Tax Comm'n (1973) 412 US. 363.0... cece cence cece eee. 29 Venegas v. County ofLos Angeles (2004) 32 Cal.4th 820.2...ceceeee eee. 17 Venemanv. Livestock Marketing Association (2004) __ U.S. _, 124 S.Ct. 2389.0.cece. 5 Ward v. Board ofCounty Com'rs ofLove County, Okl. (1920) 253 US.172.cece cece cece e ec ee cece. 18 Whyte v. Schlange Lock Co. (2002) 101 CalApp.4th 1443 22000eee 29 Wileman Bros. & Elliott, Inc. v. Espy (9th Cir. 1995) 58 F.3d 1367 22...eeee. 4 Will v. Michigan Dept. ofState Police (1989) 491 US. 58.00cece cece cece eee. 12 Zelda, Inc. v. Northland Ins. Co. (1997) 56 Cal.App.4th 1252 ............. cee eee eee ee eee eee 14 Statutes and Regulations TUS. § 6086...cece eee cece eeeceec ee. 25 42 U.S.C. § 1983 0.0. ee eect cece cee cee cee eee, 12, 13 7 CFR. § 981.33 000 000. cee eee ee ee hve ce eceeeeees 25 7 CER. § 981.38 000. cece cece cece ence eee e cee. 25 TCEAR. § 981.81 0000 cle eee cece eee eee, vee ceeeeees 25 Vv Scanned Dy LIBRARY °: Page Food & Agriculture Code § 75051... cece cece cece cece eee,23, 24,27 § 75052...eeeeee ence teeecee ce.23, 24 § 75054... cececence cece cece eee. 24,25 § 75056...ceeeee cence cece eee e.23 § 750592...cececece cece ee eee.24 SL22, 23; 28 § 75069 ....2. 2.enee eee eee eee eee 22, 23, 28 § 75070 21.eeecece cence cence eee, Passim s23 § 75095. Lkeee cece cece ence neues 22, 23, 28 SL:23 0oD22, 23 BS)10 SoS 0 isa22, 24 Government Code § 92100. 2.6.cecence cece even eee e.28 Health & Safety Code 8445SL ec cc cee cc e cen eee n eee ceebeeee cee.28 Other Authorities 4 Witkin, Cal. Procedure (4th ed., 1996) Pleading, §1080, p. 530....... 26 vi scanned by LIBRARY 4 INTRODUCTION. This action arises outofa series of disputes involving Country Eggs, Inc. (Country Eggs) and the California Egg Commission(the Commission), a public corporation that was dedicated to promotion of eggs and egg products.” In 1997, Country Eggs broughtits first action against the Egg Commission in federal court, arguing that compelled payment of assessments ta fund the Commission’s generic promotion program violated the First Amendment. (Country Eggs, Inc., et al. v. California Egg Commission, et al., United States District Court for the Eastern District of California, Case No. 97-0260 (Country Eggs 1).) Believing that it was not going to prevail in that action, Country Eggs agreed to dismiss this federal court action andenteredinto a stipulated injunction requiring it to timely pay its assessments. These assessments are the subject of the present action. In early 2000, Country Eggs broughtanother action against the Commission, this time in Sacramento County Superior Court. (Country Eggs, Inc. v. Lyons, et al., Sacramento County Superior Court, Case No. 00AS01418 (Country Eggs I) Country Eggs prevailed in this action and obtained a monetaryjudgmentfor a refundofits assessments. Because the 1. The Egg Commission conducted research and educational programs, as well as a generic egg promotion program. (Clerk’s Transcript (CT) 282-283.) The "got milk?" and "IT’S THE CHEESE!" campaigns of the Fluid Milk Processors and California Milk Producers Advisory Boards are well-recognized examples ofsuch programs’ marketing efforts. 1 scanned by LIBRARY © Legislature declared that the State is not responsible for the Commission’s debts (Food & Agr. Code, § 75070, subd. (a))”, the trial court ordered that the monetaryjudgment was directed solely against the Commission. The Commission suspendedits activities and expended its funds, and Country Eggs did not collect the full amountofits judgment from the Commission. In the presentaction, Country Eggs seeks the uncollected portion of the Superior Court judgment, not from Commission, but from defendants A.G. Kawamura,in his official capacity as the Secretary of the California Department ofFood and Agriculture(the Secretary), the California Department of Food andAgriculture (the CDFA),”and the State of Califomia (collectively Defendants). Country Eggs’s claims have two basic flaws. First, Country Eggsis seeking a refund from the wrong parties. The remedy that Country Eggs seeksis a refund of assessments thatit paid to the Commission. But the Commissionis a separate entity from the Defendants, and the assessments collected by the Commission were underthe exclusive control of the Commission. Requiring Defendants to reimburse the money paid to the Commission would oblige them to substitute money from the 2. All statutory references are to the California Food and Agricultural Code unless otherwise noted. 3. The Secretary and the CDFAwill be collectively referred to as the Department. | scannedby LIBRARY = State treasury for moneypaid to the Commission. This remedy would not be a “refund” but would instead be akin to a damages award. Becausethetrial court found that Country Eggs’ claims for damagesfail (Clerk’s Transcript (CT 661-662), and Country Eggs has not appealed that finding (Appellant’s Opening Brief (AOB)atpp. 16, 36-37), there is no legal theory upon which to base liability against the Defendants in this action. Second, Country Eggs seeks a refund of assessments thatit paid pursuantto a “voluntary stipulated injunction thatplaintiff [Country Eggs] was to continue payingits assessments.” (CT 659.) There is no duc process _ violation, and nobasis for a refund, because the assessments Country Eggs now seeks were made pursuantto a voluntarystipulation. Furthermore, these payments were made pursuantto a final federal court judgment. To award Couniry Eggs the refund that it seeks would be awarding relief from that judgment, a result barred by comity and the respect accorded final federal judgments. Accordingly, Country Eggs’ claims for a refund against the State, the Departmentandthe Secretary fail, and the trial court’s grant of summary judgmentshouldbeaffirmed. scanned fy LIBRARY © PROCEDURAL BACKGROUND Country Eggs [ Case-countryEgesEnters Into a Federal Court Voluntary Stipulated Injunction That It Will Pay Its Assessments. In the present action, Country Eggs seeks a refund ofassessment that it paid pursuantto a stipulated injunction in Country Eggs I. In February 1997, Country Eggs filed Country Eggs Tin federal court, invoking federal question jurisdiction. (CT 367, 369.) In its complaint, Country Eggs alleged that the Commission’s activities violated its First Amendment and equal protection rights, and violated the dormant Commerce Clause (CT 367- 376.) Country Eggs I wasfiled during a period of evolving case law. In February 1997, when Country Eggs I was filed, applicable case law raised serious questions regarding whether mandated assessmentsto fund generic marketing programsviolated the free speech rights of dissenters. (Compare United States v. Frame (3d Cir. 1989) 885 F.2d 1119 [federal beef promotion program does notviolate First Amendment] with Wileman Bros. & Elliott, Ine. v. Espy (9th Cir. 1995) 58 F.3d 1367, revd. sub nom. Glickman v. Wileman Bros. & Elliott, Inc. (1997) 521 U.S. 457 {federal tree fruit promotion programsviolate First Amendment}.) In June of 1997, the United States Supreme Court addressed this issue in Glickmanv. Wileman 4. Althoughthe Secretary was a named defendantin this action, he was never madea party to this action, and was not a party to the stipulated Judgment. (CT 186-192.) scanned by LIBRARY © Brothers & Elliott, Inc. (1997) 521 U.S. 457 (Glickman). In Glickman, the United States Supreme Court considered the constitutionality of federal tree fruit promotion programs, and foundthatthese programs were a form of economic regulation that did not violate the First Amendment(id.at pp. 5. The law regarding the constitutionality of these programsisstill evolving. The United States Supreme Court revisited the Glickman decision in United States v. United Foods, Inc. (2001) 533 U.S. 405. In that decision, the Supreme Court considered whetherthe rule articulated in Glickman applied to an advertising-only, mushtoom promotion program. The United Foods Court found that Glickman was not controlling in the context of an unregulated industry, and that the mushroom program violated the First Amendment. (United Foods, supra,at pp. 415-417.) Since United Foods, courts have been struggling with the application of the Central Hudsontest, applicable to regulation of commercial speech, and the governmentspeech doctrine, in the context of generic promotional programs. (See, e.g., Livestock Marketing Association v. United States Department ofAgriculture (8th Cir. 2003) 335 F.3d 711, 717-720, 722-724, cert. granted May 24,2004, U.S. [124 S.Ct. 2389], Cochran vy. Veneman(3d Cir. 2004) 359 F.3d 263, 273-274, 277-279.) The United States Supreme Court recently granted certiorari in a case that raises both of these issues. (Venemanv. Livestock Marketing Association (2004) __ US. _» 1248.Ct. 2389 (mem.).) It is anticipated that the Supreme Court’s decision in the pending case will resolve the question of the standards applicable to these programs underfedcrallaw. California law has also been ina state of flux. In 2000, the California Supreme Court considered the constitutionality ofa plum marketing program and foundthatin, the context of generic promotional programs, the California liberty of speech clause provided greater protections than the First Amendmentofthe United States Constitution. (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 517 (Gerawan f).) It was not until June of 2004,that the California Supreme Court articulated the appropriate test to be applied to generic promotion programs. In Gerawan Farming, Inc. vy. Kawamura (2004) 33 Cal.4th 1 (GerawanI), the California Supreme Court concludedthat, under the California Constitution, “compelled funding of generic advertising . . . should betested by the intermediate scrutiny standard articulated by the United States Supreme Court in Central Hudson Gas & 5 scannedl by | LIBRARY = 476-477.) Following the issuance of Glickman, Country Eggs suffered a series of setbacksin its claims against the Commission. First, the Commission prevailed on a motion for Judgmentonthe pleadings. (CT 363-364.) In ruling on that motion,the federal district court found that Glickman controlled Country Eggs’ First Amendmentclaim and dismissed this claim, with leave to amend. The district court also dismissed Country Eggs’ equal protection claim, with leave to amend. Butthe court denied the Commission’s motion to dismiss Country Eggs’ Commerce Clause claims. (CT 363-364.) On November5, 1997, Country Eggsfiled its Second Amended Complaint, alleging that the Commission’s program violates the First Amendment, Equal Protection Clause, and Commerce Clause ofthe United States Constitution, and adding a claim underthe free specchand fice association clauses of the California Constitution. (CT 343- 354.) The Commission,in turn, pursued its own remedies against Country Eggsbyfiling a counterclaim in Country Eggs I. (CT 153-165.) The Commission subsequently moved for an order requiring Country Eggs to pay its past-due assessments, as well as a preliminary injunction requiring Elec. v. Public Serv. Comm’n (1980) 447 U.S. 557...” (GerawanII, supra, ~ 33 Cal.4th at 17.) The Court also indicated that generic marketing programs could bejustified under the government speech doctrineifthe facts demonstrated that program’s “messageis decided upon by the Secretary or other governmentofficial pursuantto statutorily derived regulatory authority.” (Jd. at p. 35.) 6 scanned by LIBRARY =. Country Eggs to maketimely paymentofits assessments in the future. On November2, 1998, the district court granted the preliminary injunction. (CT 183.) However, the Court madenofinal ruling on the merits of any of Country Eggs’ claims. (CT 177, 179, 181.) Shortly after the federal court granted the preliminary injunction, Country Eggs and the Commission settled Country Eggs I. At this point, Country Eggs believed that the case law was going against it. (CT 060-061, 73; see also AOBat p. 21.) Facing what was perceived to be “a lost cause” (AOBatp. 23) andto “stop havingto pay morc attorneys’ fecs to the Commission,” Country Eggs enteredinto a stipulated Judgment dismissing its claims against the Commission, with prejudice (the Stipulated Judgment). (CT 060:25-61:10, 073, 186-192.) Country Eggsentered into this Stipulated Judgment “voluntarily and intentionally,” and with advise of counscl. (CT 189:19-20.) Although Country Eggs reservedits right to bring future challenges against the Commission, Country Eggsalso agreed to a “voluntary stipulated injunction that [Country Eggs] was to continue paying its assessments” to the Commission,and to the applicable penalties shouldit fail to make those payments. (CT 659: see also CT 186-191 -) Pursuantto the federal court Stipulated Judgment, on June 1, 1999, Country Eggs began payingits assessments. (CT 060-061 , 073.) Country Eggsfell behindin its payments and, in early 2000, the Commission applied scanned by LIBRARY 5 to the fedcral district court for enforcementof the Stipulated Judgment. (CT 073-074, 195.) On March 24, 2003,the district court issued its order denying the requested relief. The court found that because the Commission had adequatestate law remedies, the permanentinjunction was unnecessary. The district court therefore dissolved the injunction and dismissed the action. (CT 195-199.) Upon the dissolution of the injunction, Country Eggs ceased paying its asscssments. All of the assessments soughtin the present refund action were paid pursuantto the stipulated injunction. (CT 061:11-24, 074, 215:3-8; sce also AOBat p. 24.) Country Eggs I Case-Country Eggs Prevails in the State Trial Court, and Obtains a Monetary Judgment Against the Commission. On March 16, 2000, Country Eggsfiled Country Eggs fin Sacramento County Superior Court. (CT 093.) In Country Eggs II, Country Eggs alleged that the Commission programviolated its freedom of speech and free association rights under the California Constitution and its due process rights under the United States and California Constitutions. (CT 093-101.) Country Eggs broughtthis action against the Secretary, as well as the Commission. (CT 093-094.) Country Eggs I proceeded quickly, andthe parties’ cross-motions for summaryjudgment were decided on October 13, 2000. (CT 056.) The Country Eggs I court ruled in favor of Country Eggs, finding that the Commission’s mandatory assessments violate Country Eggs’ free speech and_ pO L scanned by LIBRARY © free association rights under the California Constitution. Additionally, the Court found that the assessments collected by the Commission violate Country Eggs’ due processrights under the California and United States Constitutions. (CT 111-114; see also CT 103-105.) On May1, 2001, the court issued a judgment in Country Eggs’ favor. (CT 111-114.) The judgmentspecified that Country Eggs wasentitled to a tefund ofassessments from the Egg Commission, but did not specify the amountofthat refund. (CT 380-382.) The trial court subsequently amended the judgmentto include a monetaryjudgment in the amount of $1 66,408.95, against the Commission only. (CT 387.) Relying on section 75070, subdivision(a), which provides that “[p]ayments ofall claims arising by reason of the administration ofthis chapter oracts of the [egg] commission are limited to the funds collected by the commission,” the judgmentspecified that the “monetaryjudgmentis only directed against the California Ege Commission andis not directed against the Sccretary of Food and Agriculture or againstthe State ofCalifornia.” (CT 387:12-14.) The Commission and the Secretary appealed the trial court’s judgment. (CT 473.) After the notices of appeal had beenfiled, Country Eggsfiled a motion withthe trial court, seeking an orderrequiring that the Commission either pay the judgmentor escrow fundsfor paymentofthejudgment. The [ scanned by LIBRARY © court denied the motion for escrow. (CT 057, 071, 410-411.) Country Eggs then filed a motion with the Court of Appeal, seeking an orderthat the Commission post a bond or escrow funds in the amount ofthe judgment, pending resolution of the appeal. Although the Secretary did not opposethis motion, the Court of Appeal denicdthis request. (CT 426-427, 431.) The Commission Suspends Its Operations and the Appeals of Country Eggs IJ Arve Dismissed. The statutes authorizing the existence ofthe Commission provided that, upon an industry vote to suspend the Commission’s activities, the Commission’s activities must be suspended. (§ 75173.) On December31, 2001, the Commission voted to recommendto the Departmentthat it suspend the Commission’s operations. As required bystatute, the Department conducted a referendum of egg handlers to determine whether the Commission’s activities should be suspended. In that referendum,a supermajority of egg handlers voted in favor ofsuspending the Commission’s activities. The Departmentcertified these results on February 14, 2002. (CT 282:25-283:5, 285-286.) Evenbefore these results were certified, the Commission filed a tequest to dismiss its appeal. The Commission’s appeal was dismissed on February 13, 2002. (CT 474-475.) Although Country Eggs wasfree to execute onits judgment once the Commission had dismissedits appeal, it did not do so until late March. On March25, 2002, Country Eggs obtained a | scanner by LIBRARY 4 Wnit of Execution against the Commission andlevied on the Commission’s bank accounts on April 4, 2002. By that timc, almostall of the Commission’s funds had been expended. Country Eggs collected the $22,160.61 remaining in the Commission’s account. (CT 072, 084.) The Defendants did not cause the Commission’s failure to pay its judgment or hinder Country Eggs’ ability to execute on its judgment. (CT 621-622, 662.) In this present action, Country Eggs seeks an order requiring the State and the Secretary to pay the remainderofits unpaid judgment for Country Eggs I. Country Eggs Brings the Present Action to Compel the State and the Department to Pay the Portion of the Judgmentthat it Did Not Collect from the Ege Commission. On July 21, 2002, CountryEggsfiled the present action against the Secretary, the Department, andthe State. (CT 002.) Country Eggs’ complaint contains three causesofaction. Inits first cause ofaction for violation of the Due Process Clause of the United States Constitution, and its third cause ofaction for violation of the Due Process Clause ofthe California Constitution, Country Eggs seeks injunctiverelief in the form of a refund ofthe unpaid portionofits assessments, as well as a declaration that Food and Agricultural Code section 75070 is unconstitutional. (CT 005- " scannedby LIBRARY 008.) Country Eggs’ second cause ofaction seeks damagesagainst Secretary Lyons under 42 U.S.C. § 1983. (CT 007.) On September 25, 2003,thetrial court issuedits ruling granting Defendants’ motion for summaryjudgment and denying Country Eggs’ motion for summaryjudgment. (CT 642-647.) As to Country Eggs first cause ofaction for violation of the Due Process Clause ofthe United States Constitution, the trial court foundthat, unlike the McKessonline of cases upon which Country Eggs relied, Country Eggs was seeking a “refund” from a party that did not collect the assessments. (CT 644, citing A{cKesson Corp. v. Division ofAlcoholic Beverages & Tobacco (1990) 496 U.S. 18 (McKesson).) Because the assessments were notpaid to the Defendants, the Defendants “cannotreturn the ‘precise property wrongfully taken.’” (CT 644.) Instead, any award against the Defendants would be akin to a damages award, which is barred by the State’s sovereign immunity. (Id., sce also Will v. Michigan Dept. ofState Police (1989) 491 U.S. 58, 64, 71.) Nor is the State vicariously liable for the acts of the Commission. (CT 645, citing Ting v. United States (9th Cir. 1991) 927 F.2d 1504.) Therefore, the trial court found that section 75070, subdivision (a), “which provides that the state shall not be liable for the acts of the commission . . . , as appliedin this action, does not violate the due process clause” (CT 645), and granted S L scanned by LIBRARY 4 summaryjudgment on Country Eggs’ first cause ofaction in favor of Defendants. (CT 644-645.) The trial court also granted summaryjudgmentas to Country Eggs’ civil rights claims, broughtagainst the Secretary under 42 U.S.C. § 1983. The court found that Country Eggsfailed to establish that Secretary Lyons owed Country Eggs a duty to prevent the Commission from making legal expenditures, even though these expenditures prevented Country Eggs from collecting the full amount of its judgment. ‘Thetrial court also found that “{p}laintiff has not shownthatthe failure of the Secretary to intervene was the causeofplaintiff's inability to collectits judgment. Twice the courts refusedto create an escrow accountfor plaintiff.” (CT 645.) Morcover, the trial court foundthat the Secretary was entitled to the defense of qualified immunity for the § 1983 claims, because “the law at the time ofthe Secretary’s actions was notclearly established, therefore the Secretary could notfairly be said to ‘know’that the law forbade conductnot previously identified as unlawful.” (/d.) Country Eggshasnot appealedthetrial court’s grant of summary judgment onthis claim. {AOBat p.16.) Finally, the trial court granted Defendants’ summary judgment motion on Country Eggs’ third cause ofaction for violation of the Due Process Clause of the California Constitution, on the ground that the California Constitution docs not provide a constitutional tort action for 13 scanned by LIBRARY 4 violation ofdue process. (CT 646,citing Katzberg v. Regents ofthe University ofCalifornia (2002) 29 Cai.4th 300, 329.) Country Eggs has not raisedthis issue in its opening brief. Therefore, this issue has been waived. (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894, fn. 10.) Thetrial court entered judgment in favor of Defendants on December 5, 2003, and notice of entry ofjudgment was mailed on December 15, 2003. (CT 650-667.) Country Eggsfiled its notice ofappealof this judgment on February 11, 2004. (CT 668-669.) ARGUMENT Standard of Review A trial court's ruling on a motion for summaryjudgmentis reviewed de novo. (Lunardi v. Great-West Life Assurance Co. (1995) 37 Cal.App.4th 807, 819.) Defendants are entitled to summaryjudgment wherethe record establishes as a matter of law that none ofthe plaintiff's asserted causes of action can prevail. (Zelda, Inc. v. Northland Ins. Co. (1997) 56 Cal.App.4th 1252, 1258-1259.) Although the revicw of a summaryjudgmentis de novo, on appeal, the court’s review is limited to issues which have been adequately raised and supportedin the plaintiff's brief. (Reyes v. Kosha(1998) 65 Cal.App.4th 451, 466, fn. 6.) Because the record here establishes that 14 seauned by LIBRARY % Defendants are entitled to summaryjudgmentas to the claim raised on appeal,”the trial court’s grant ofsummaryjudgment should beaffirmed. 1. The State Defendants Are Not Responsible for Refunds of Assessments ‘That Were Paid to the EzeCommission. Invoking the AfcKessonline of cases, Country Eggs asks this Court to find that the State or the Departmentare responsible to refund assessments that Country Eggs paid to the Commission. In McKesson, the United States Supreme Court held that, where a public entity requires payment of a tax without providing adequate predeprivation procedures, and due process requiresthat entity to provide a “clear and certain remedy,” normally in the form of refund, in the event that the tax is later found to be invalid. (McKesson, supra, 496 U.S.at p. 51.) A key distinction separates McKessonand its progeny from the present case. In McKesson, the taxpayer was seeking a refund from the entity that had collected the tax. In contrast, here, Country Eggspaidits assessments to the Commission, but seeks a refund from the Department and 6. The sole claim raised on appealis the trial court’s grant of summaryjudgmentas to Country Eggs’ first cause of action for injunctive and declaratory relief. Country Eggs has not appealedthe trial court’s grant of summaryjudgmentas to Country Eggs’ second cause ofaction for violation ofcivil rights. (AOBat p. 16.) Country Eggs hasfailed to argue that the trial court erred whenit granted summaryjudgment on Country Eggs’ third cause of action for violation of the Due Process Clause ofthe California Constitution; therefore it has waivedthis issue. (Tiermanv. Trustees ofCal. State University & Colleges (1982) 33 Cal.3d 21 1, 216,fn. 4.) 15 | scanned by LIBRARY & the State, even thoughit is undisputed that these defendants never had access to the assessments collected by the Commission. Thus, Country Eggs seeks its refund remedyagainst the wrong partics. Because McKesson does not require the State to refund assessments paid to otherentities, the State and the Department cannotbeheldliable for a refund ofthe assessments collected by the Commission, and thetrial court’s entry of summary judgmentin favor of Defendants must be affirmed.’ A. McKesson Does Not Requirethe State or the Secretary to Refund Assessments That Were Paid to Other Public Entities. Country Eggs relies upon McKesson for the proposition that the State and the Departmentareliable for a refund ofthe assessments thatit paid to the Commission. Butit has failed to present any authority for the 7. If this Court finds that there is a basis for a refund claims against Defendants,factual issues remain regarding the propriety of a refund in this case. Restitution is available “only if the circumstances ofits receipt or retention {of the benefit] are such that, as between the two persons,it is unjust for him to retain it.” (Ghirardo v. Antonioli (1996) 14 Cal.4th 39, 51 [quoting Restatementof Restitution, § 1, com. c].) In the court below, in opposition to Plaintiff's motion for summary judgment, Defendants presented evidence showing that the equities weigh heavily in favor of denying Country Eggs’ claims forrestitution. Defendants have receive no direct benefits from the assessments. (CT 661.) In contrast, Defendants have presented evidence that Country Eggs received benefits from the Commission’s program. (CT 282, 293-315, 589-590.) Additionally, Defendants have presented evidence showing that Country Eggs has not bornethe costs ofpaying the assessments, but instead passed these costs directly to its customers. (CT 262-263, 591 .) Therefore, in the event that this Court doesnotaffirm thetrial court’s judgment, this case should be remandedso that thetrial court may determine the propriety ofa refund in light of the equities in this case. 16 seared by LIBRARY = propositionthatit is entitled to a refund fromentities that neithercollected the assessments, nor had access to the assessments. Noris there any basis in McKessonorits progeny for this novel proposition. It is well-established that the State can create separate public entities that have their own taxing and spending power, and not be responsible for their debts. States are neither directly norvicariouslyliable for the constitutional violations of many formsofpublic entities ranging from traditional local governmental entities, such as cities and counties, to port authoritics. (Sec, ¢.g., Sullivan v. County ofLos Angeles (1974) 12 Cal.3d 710, 717 [counties]; Venegas v. County ofLos Angeles (2004) 32 Cal.4th 820, 860 (conc. & diss. opn. of Werdegar,J.) [counties]; Hess v. Port Authority Trans-Hudson Corporation (1994) 513 U.S. 30, 46 [port authority] (Hess).) The fact that thesc entities “exist solely at the whim and behest of their State” (Hess, supra, 513 US.at p. 47), does not make the states legally liable for their debts. (Jd. at p. 46.) This rule ofnonliability has been a key factor in the line of cases in whichcourts have foundthat, although a public entity was created by the state to further state ends,it is not an arm ofthe state and is not entitled to Eleventh Amendment immunity from suit. (See, e.g., Hess, supra, 513 U.S. at p. 52 [Port authority not arm ofthestate, in part because the state is not liable for its debts]; [TSI T.¥. Productions, Inc.v. Agricultural Associations 17 seanned by LIBRARY % (9th Cir. 1993) 3 F.3d 1289, 1293 [finding that Cal Expo is not an entitled to Eleventh Amendmentimmunity because “(t]here appears to be no obligation on thepart ofthe state to pay debts of a special fund agency.”]; see also Kirchmanv. Lake Elsinore Unified School District (2000) 83 Cal.App.4th 1098, 1109-1111.) Given this long established mule, parties seeking refunds or other equitable relief from state-created public entities, such as cities and counties, have lookedto those entities, not the state, for refunds. (See, e.g., General Motors Corporation v. City and County ofSan Francisco (1999) 69 Cal.App.4th 448; Ward v. Board ofCounty Com'rs ofLove County, Ok. .- (1920) 253 U.S. 17.) Thus,it is not surprising that Country Eggs has not pointed to, nor have Defendants found, a case where an individual obtained a refund from anentity other than the specific entity that collected the tax or fees. Defendants have found only one case in which a plaintiff sought a refund oftaxes or assessments from anentity that had notcollected those monies—the Ninth Circuitcase of Cal-Almond vy. United States Department ofAgriculture (9th Cir. 1995) 67 F.3d 874 (Cal-Almond TT), judgment vacated and cause remandedfor further consideration in light of Glickman, supra, 521 US.at p. 457, in United States Department of.Agriculture v. Cal- Almond, Inc. (1997) 521 U.S. 1113; see also United States v. Cal-Almond, scanned by LIBRARY = Inc. (9th Cir. 1996) 102 F.3d 999, 1002-1003. In Cal-Almond Hf, the Ninth Circuit found that an entity must provide a refund ofinvalid assessments that werepaid to that entity, but that entity is not required to refund assessments paid to otherentities. Cal-Almond Iarose out of a challenge to a federal almond promotion program. In a prior decision, the Ninth Circuit had found that the federal _ almond marketing program violated dissenters’ First Amendment rights. (Cal-Almond v. DepartnientofAgriculture (9th Cir. 1993) 14 F.3d 429, 440 (Cal-Almond J), judgmentvacated and cause remanded for further consideration in light of Glickman, supra, 521 U.S.at p. 457, in United States DepartmentofAgriculture v. Cal-Almond, Inc. (1997) 521 U.S. 1113.) The Cal-Alnond I court found that an appropriate remedy was “a refund of any assessments found not to have been due.” (Cal-AlmondI, supra, 14 F.3d at p. 448.) Butthe court also explained that McKesson does not require any award of compensatory damages, but only held “that a refund of unlawful taxes was onepossible way for the State {of Florida] to satisfy the requirements of the Due Process Clause.” (Cal-AlmondI, supra, 14 F.3d at p. 448, fn. 19.) On remand from Cal-AlmondJ, the district court awarded a refund of all of the assessments that the dissenters had paid, regardless of who had received those payments. In Cal-Almond I, the Ninth Circuit Court of L scanned by LIBRARY © Appeals considered the propriety ofthat refund. This analysis was complicated by the fact that not all of the assessments mandated by the almond promotion program werepaid to the program. The almond program provided two means through which almond handlers could satisfy their obligation to pay assessments. First, an almond handler could payits assessments directly to the program. Second, an almond handler could deduct the amounts it spent on its own promotionalactivities from the amount ofthe assessment due (this amountis referred to as “creditable advertising”). (Cal-AlmondI, supra, 14 F.3d at p. 433; see also Cail- AlmondII, supra, 67 F.3d at p. 877.) This distinction raised the question of whether reimbursementof the money paid for creditable advertising was a refund of assessments, or instead was a damagesclaimsthat was barred by sovereign immunity. (Cal-Almond IZ, supra, 67 F.3d at p. 878.) After carefully considering the nature of the remedyofa refund, the Cal-AlmondH court found that the moneypaidas “creditable advertising” was not recoverable as a refund. The court explained that the distinction between money damages and a refundis that “[dJamagesare givento the plaintiff to substitute for a suffered loss . . . specific remedies ‘are not substitute remediesatall, but attempt to givethe plaintiff the very thing to whichheis entitled.’” (Cal-Almond I, supra, 67 F.3d at p. 878, quoting MarylandDept. ofHuman Resources v. Department ofHealth and Human scanned by LIBRARY = Services (D.C. Cir. 1985) 763 F.2d 1441, 1446.) Because the assessments used for creditable advertising were never paid to the almond program, but instead were paid to others such as advertising agencies, “[rJequiring the USDAto reimburse the handlers for money they expendedon creditable advertising would oblige the USDAto ‘substitute’ money fromits coffers for moneythe handlers hadto payto third parties.” (Cal-Almond IT, supra, 67 F.3d at p. 878.) The Cal-AlmondII court found the claim for assessments paid for creditable advertising was a damages claim, not a claim for refund. These damages claims werc barred by the doctrine of sovereign immunity. Accordingly, althoughthe plaintiffs had paid assessmentsfor creditable advertising under duress, there was no remedyavailable. (Ud. at pp. 879- 880.) Forthe reasonsoutlined in scction 3.B.2.ofthis brief, to require any of the Defendants to pay the judgment here would require them to ‘substitute’ moncy from their coffers for the moneythe handlers paid to third party. This remedy would be a damages award,not the equitable remedy of arefund. The trial court correctly found that Country Eggs’ damages claims fail. (CT 661-662.) Asthetrial court found,the State, the Departmentand the Secretary, in his official capacity, cannot be held vicariously liable for the acts of the Commission and,in any event, have sovereign immunity. (/d.) 1 scanned by LIBRARY % Accordingly, the sole remedy available to Country Eggs is a refund. Butthe only entity liable for the refundis the entity that received the assessments. As discussed below, the Commission was a separate entity, and assessments paid to the Commission were not available to the State or the Department. The State and the Department cannotrefund assessments paid to the Commission. B. The Commission Is an Independent Entity: Therefore the State Is Not Liable for a Refund of the Assessments Paid to the Commission. Asdiscussed above, states may create separate public cntitics and not be responsible for paying the debts of these entities. Therefore, the remaining question is whether the Commission wasa separate entity, such that requiring Defendants to “refund” assessments paid to the Commission would require Defendants to substitute moneyfrom thestatc treasury for money paid to the Commission. The Commission’s authorizing statutes created the Commission as a separate entity, which was scparatcly funded and managed. (See, e.g. §§ 75064, 75069, 75095, 75131, 75175, subd. (a).) Because the Defendants had noaccess to the assessments paid to the Commission, they cannot refund those assessments. The statutory scheme authorizing the Commissionestablishes that the Legislature intended that it be a separate public entity, and that the State would notbeliable for its debts. (§ 75070, subd. (a).) While it was in scanned by LIBRARY © operation, the Commission had a separate legal existence from either the State or the Department. The Commission was a public corporation, granted all of the powers ofa corporation, and was authorized to adopt a corporate seal. (§75064, subds. (a), (b); CT 511, 585:6-10; 66 1.) It was composed of 8 egg industry representatives, who were elected by membersofthe egg industry, and one public member, who was nominated by the Commission and appointed by the Secretary. (§§ 75051, 75052; CT 511, 586:4-19.) The Commission could hire its own counsel, sue and be sued, and prosecute violations ofits authorizing statute. (§§ 75064, subd. (b), 75085, subd. (a), 75098; CT 511, 585:6-10.) The Commission could even bring actions against the Secretary and the Department. (§§ 75056, 75064, subd. (b), 75085, subd. (a); CT 511, 585:6-10.) The Commission wasalsoa separate financial entity. The Commission was not publicly funded, but instead was funded through assessments, set by the Commission,” and paid by egg distributers. (8§ 75095, 75131, subd. (a); CT 511:6-7; 661.) The State had noaccessto any of the assessments collected by the Commission. These assessments were kept in a separate accountand could bedisbursed only on the order of the Commission. (§ 75069; CT 511:9-12; 661.) Even upon dissolution, the Commission’s funds were notavailable to the State. In the eventthat the 8. The Legislature capped the assessmentrate at $0.01 per dozen for shell eggs, with an equivalent cap for egg products. (§ 75131, subd. (a).) 23 scanned by LIBRARY & Commission dissolved, any remaining funds would be returned to the persons from whom they were collected, on a prorata basis. (§ 75175, subd. (a); CT 511:13-15; 661.) Additionally, the Legislature expressly provided that the Commission wasa separate financial entity, and responsible forits own debts, declaring: Thestate shall not be liable for the acts of the commission or its contracts. Payments ofall claims arising by reason of the administration of this chapter or acts of the commission are limited to the funds collected by the commission. (§ 75070, subd.(a).) Finally, the Commission operated independently. The State retained virtually no control over the Commission orits activities. The State did not select the Commission members. With the exception of the Commission’s one public member, the Commission’s members were chosen by vote of egg handlers, giving no appointment or veto powerto the Secretary. (§ 75051, 75052, 75059; CT 511:23-26.) Although the Secretary was an “ex officio” memberofthe Commission, he did not have the powerto vote on issues before the Commission. (CT 282, 512:1-5.) Defendants had virtually no control over the day-to-dayactivities of the Commission. The Secretary’s sole meansofexerting authority over the Commission was through his cease and desist authority. (§ 75054, subd. (a); CT 661.) Butthis authority could only be exercised after the Secretary made a determination that the Commission was engagingin an activity that was notin the public interest, " | scanned by LIBRARY © Or wasin violation of the Commission’s authorizing statute. (§ 75054, subd. (a).) The Commission thus acted in an independent, not an advisoryrole, when administering its program” Nonetheless, Country Eggs argues that the trial court erred when it foundthat, because the State and the Secretary cannot refund assessments they neverreceived, any remedy would be more akin to an award of damages. (AOB,at p. 31.) Inso doing, Country Eggs concedes that the remedyit seeks under McKessonis a refund, and not damages,but argues 9. The Commission’s separateness and independenceis particularly striking when compared to the Almond Board,the entity administering the almond program on behalf of the U.S. Department of Agriculture (USDA). (Cal-Almond I, supra, 67 F.3d at p. 877.) In contrast to the Commission, the AlmondBoard was notseparate legallyor financially. The Almond Board is not a separate public corporation. Instead, it was an agency ofthe Secretary that was merely advisory to the Secretary. (7 US.C. § 608c(7)(C).) Unlike the Commission, the Almond Board did notset the assessments; instead the assessmentrate was set by the Secretary of the USDA. Furthermore, the Secretary of the USDA controlled the distribution of the Board’s funds upon termination. (7 C.F.R.§ 981.81(d).) Unlike the Commission, the Almond Board wasnot elected by the industry, but was instead composedofindustry members appointed by the Secretary of the USDA.(Glickman v. Wileman Bros. & Elliott, Inc. (1997) 521 U.S. 457, 462; 7 C.F.R. § 981.33.) Additionally, unlike the Commission, which managed its own program,the Board’s role in managing the almond program was only advisory. The Secretary alone was responsible with administering and enforcing the almond marketing order. (Massachusetts Farmers Defense Committee v. United States (1939), 26 F.Supp. 941, 942; see also 7 C_E.R. § 981.38(a)-(c).) 10. Altcrnatively, Country Eggs describesits claims as claims for recoupment. (AOBatpp. 36-37.) However, “recoupment”is not an independentclaim. Instead it a defense or counterclaim thatis raised to | 25 scanned by LIBRARY % that the State must be required to refund the assessments because it crcated _ the Commission and receives an indirect benefit from the Commission (an expansion of the egg market). (AOBat pp. 31-35.) The fact that the Legislature created the Commission does not make the State or the Departmentliable for a refund of assessments paid to the Commission. States create a myriad of public entities, in a “profusion of distinct forms,”including “many kinds of municipal corporations,political subdivisions, and special districts ofall sorts...” (City ofSt. Louis v. Praprotnik (1988) 485 U.S. 112, 124.) All of these entities are created through and are dependent uponthe state’s police powers, and “exist at the whim andbehestoftheir State.” (Hess, supra, 513 US. 30, 47.) Any powerthat these entities have to impose and enforcetaxes is delegated to them by the Legislature. (Marin County v. Superior Court ofMarin County (1960) 53 Cal.2d 633, 638-639.) But this grant ofpower does not makethe state responsible to refund invalid fees and taxes paidto theseentities. Instead, the state can only refund taxes andfeesthatit actually receives. Noris it relevant that the Commission provided an indirect benefit to the state by carrying outa legislatively approved policy of maintaining and reduce the amount ofa demand by deductions arising outof the same transaction. (4 Witkin, Cal. Procedure (4th ed., 1996) Pleading, § 1080, p. 530.) In the present action, Defendants have made no demandagainst which a claim for recoupmentcanberaised. | 26 scanned by LIBRARY | expanding the market for eggs. (AOBat p. 32-33.) The factthat the Commissionwascreated to benefit the State’s egg industry, and the public as a whole,is not the type of direct benefit that createsliability for a refund. Every political subdivision ofthe State was created to aid the state in carrying out the State policies and to assist in achieving the public good. (See, e.g. Marin County v. Superior Court ofMarin County, supra, 53 Cal.2d at pp. 638-639 [“The county is merely a political subdivision ofstate government, exercising only the powers ofthe state, granted by the state, created for the purposes of advancing thepolicy ofthe state at large. . ."].} Butthe State is notliable for the debts of each ofthese entities. Finally, Country Eggs’ reliance on the boilerplate statementin section 75051 that “[t]here is in state government the California Ege Commission” is misplaced. (AOBat pp. 34-35.) Thereis nobasis for finding that this phrase was intended as a waiverofthe State’s sovereign immunity. Instead, the Legislature expressly provided that the State was notliable for the Commnission’s debts. (§ 75070, subd.(a).)This general, introductory language does not evenindicate that the Legislature intendedthat the Commissionbe a state agency.“ As acknowledged by Country Eggs (AOB 11. Where,as here, “a general statute conflicts with a specific statute, the specific statute controls the general one.” (Craddock v. Kmart Corp. (2001) 89 Cal.App.4th 1300, 1310.) 12. Even if this language indicated that there was sometype of agencyrelationship between the State and the Commission,this relationship | 27 scanned by LIBRARY = at p. 34), this identical language is used in 73 different California statutes for a wide variety of public entities, including entities that are expressly defined as political subdivisions, rather than State agencies. (See California Pollution Control Financing Authority, Health & Saf. Code, §§ 44515: California Passenger Rail Financing Commission, Gov. Code, §§ 92100.) When the Legislature passed the Commissionlaw,it specifically expressed its intention that the Commission be an independent, self-funded entity, and that the State would notbe liable for the Commission’s debts. (Sce,c.g., §§ 75064, 75070, 75069, 75095.) Thus, the Commissionis a separate entity, and requiring the State or the Departmentto refund assessments paid to the Commission would require these entities to substitute their own funds for the funds ofthe Commission. As found bythe trial court, such an award docs notfall within the equitable remedy of a refund, butis instead damages. Becausethere is no basis for an award of damages against any of the Defendants in the present case (CT 661-662; AOBat p. 16 [waiving damages claims]), Country Eggs’ claims fail, and the trial court’s judgment in favor ofDefendants should be affirmed. doesnotcreate a liability for a refund. Public entities may be considered agencies ofthe state for some purposes,but that docs not necessarily mean that the Stateis liable for the debts of that entity. (See Lynch v. San Francisco Housing Authority (1997) 55 Cal.App.4th 527, 539-540.) | 28 scanned by LIBRARY © Il. CountryEggs’ Claims Under McKesson Fail Because Country Eggs Seeks a Refund of Assessments That Were Paid Pursuantto a Stipulated Injunction Entered into Voluntarily. As explained above,thetrial court correctly found that the State and the Secretary cannotbe held liable for a refundofthe assessments that Country Eggs paid to the Commission. However,even if this ruling was in error, thetrial court’s judgment should be upheld because thetrial court’s result is supported by a separate ground. (Whyte v. Schlange Lock Co. (2002) 101 Cal.App.4th 1443, 145 1.) The assessments that Country Eggs seeks were paid pursuantto “a voluntary stipulated injunction” under which Country Eggs agreed to “continue paying its assessments.” (CT 659; see also CT 186-192.) Thus, Country Eggs’ claimsare additionally barred for two reasons. First, because Country Eggs agreed to pay the assessments, and any related charges, these payments do not violate Country Eggs’ due process rights. Second, to award Country Eggs a refund of assessments that it paid pursuantto a federal court judgment would conflict with the principle ofcomity and with the respect accorded tofinal federal court judgments. There is no due process violation, and nobasis for a refund under McKesson, where the paymentofa fee or tax was voluntary. (McKesson, supra, 496 U.S. at p. 36; United States v. Mississippi Tax Comm’n (1973) 412 US. 363, 368, fn. 11.) Under McKesson, voluntariness normally turns . | scanned by LIBRARY =. upon whether the taxpayer has an adequate predeprivation remedy. However, this case present a unique circumstance, because Country Eggs seeks a refund of assessments that were paid pursuantto a stipulated federal court injunction entered into “voluntarily and intentionally,” and with advice of counsel. (CT 188-189.) Country Eggs agreedto pay its assessments aspart ofits settlement of Country Eggs I. At that time, the case law was notfavorable to its position, and Country Eggs believed it faced “a lost cause with respectto [its] free speech claims.” (AOBatp. 23.) “[T]o stop having to pay more attomcys’ fees to the Commission” (CT 073), Country Eggs enteredinto a stipulated judgment, dismissing its claims and agreeing to “a voluntary stipulated injunctionthat plaintiff was to continue payingits assessments.” (CT 659; see also 188-190.) Country Eggs’ decisionto agree to pay its assessments to avoid incurring potential penalties, as well as further legal costs and attorneys’ fees, was not involuntary or under duress.” Nor were the payments made pursuantto the stipulated judgment under duress for purposes ofMcKesson. Instead, Country Eggs made the payments pursuantto an agreementthat it 13. Sce, c.g. Philippine Export and Foreign Loan Guarantee Corporationv. Chuidian (1990) 218 Cal.App.3d 1058, 1079 (threats to prosecute a lawsuit in goodfaith not duress); cf. People v. Bravo (1987) 43 Cal.3d 600, 609 (a probationer's waiver of his Fourth Amendment rights is no less voluntary than the waiver of rights by a defendant who pleads guilty to gain the benefits of a plea bargain). 30 scanned by LIBRARY 4 entered into based on Country Eggs’ belief that it was unlikely to be successfulin light of then-existing case law. Country Eggs may now “wish that it had not madethis deal, but courts have not looked favorably on the entreaties of parties trying to escape the consequencesoftheir own ‘counseled and knowledgeable’ decisions.” (Coltec Industries, Inc. v. Hobgood(3d Cir. 2001) 280 F.3d 262, 274 [although subsequentcase law revealed plaintiffs’ claims wereviable, plaintiffs not entitled to relicf from stipulated dismissal of those claims].} Furthermore, Country Eggsis asking this Court to find that payments made pursuantto a final federal court judgment were under duress within the meaning ofMcKesson, and to awardit with a refund of monies paid pursuantto that judgment. But California courts must accord the Country Eggs Ijudgmentthe respect it would receive in federal court, where the judgment would betreated as a binding,final judgment. (Martin v. Martin (1970) 2 Cal.3d 752, 761 [“A federal court Judgment has the sameeffect in the courts ofthis state as it would in a federal court’); Butcher v. Truck Insurance Exchange (2000) 77 Cal.App.4th 1442, 1452-1453 (where prior federal judgmentwas onthe basis of federal question jurisdiction,full faith and credit must be givento that judgment]. Under Federal Rules of Civil Procedure 60, a party may request the court to vacate a continuing injunctiontoreflect changes in the law or mayseekrelief from a final 3 |: scanned by LIBRARY | judgment” Had Country Eggs objected to the federal court injunction,it should have raised the issue before thedistrict court in Country EggsI. It cannot now be permitted to tumto the state court to obtain relief from a federal court judgment. Nordoes the respect accorded a final federal courtjudgment change when constitutional issues are at stake. (Blue Diamond Coal Co. v. Trustees ofthe UMWA Combined Benefit Fund (6th Cir. 2001) 249 F.3d 519, 528 (Blue Diamond Coatl).) For example, the Blue Diamond Coal Company had challenged the constitutionally of congressionally mandated paymients under the Coal Act. Blue Diamond’s challengefailed, resulting in a final judgment againstit. (/d. at p. 522-523.) The United State Supreme Court subsequently reviewed a parallel challenge to the Coal Act, and found that the challenged payments violated duc process. (Id. at p. 523, citing Eastern Enterprises v. Apel (1998) 524 U.S. 498 (Eastern Enterprises).) By mid- 1998, when the astern Enterprises decision was entered, Blue Diamond had paid in excess of$14 million pursuantto the 1994 district court order. (Blue Diamond Coal, supra, 249 F.3d at p. 523.) In accordance with the Supreme Court’s decision, the government offered refunds ofall of the 14. Fed. R. Civ. P. 60(b)(a district court mayrelieve a party from their legal obligations where “it is no longer equitable that the Judgment should have prospective application,” or where there is “any other reason justifying relief from the operationofthe judgment”); Agostini v. Felton (1997) 521 U.S. 203, 238-239. | 32 scanned by LIBRARY 4 payments under the invalid law, except those payments made pursuantto a final judgmentor settlement entered before the issuance of the Eastern Enterprises decision. ({bid.) The government declined to refund the $14 million that Blue Diamondhadpaid, because Blue Diamond’s payments were pursuantto a final court order. Blue Diamondsoughtrelief under Federal Rules of Civil Procedure, Rule 60(6), based on the unfairnessof the result. Although the district court grantedrelief, theBlue Diamond court reversed. (Blue Diamond Coal, supra, 249 F.3d at p. 529.) The Blue Diamond court explainedthat these facts did not constitute “extraordinary circumstances” meriting reliefunder Rule 60(b)(6), particularly when weighed againstthe interestin finality of the prior judgment. (/d. at p. 528.) Similarly, here, the relief that Country Eggs seeks is essentially relief from a final federal court order. Even if this court could grantrelief from a federal court order, becauseoftheinterests of comity and the finality of the judgment in Country Eggs I, the relief Country Eggs seeks must be denied. | Country Eggs entered into a stipulated judgment, in whichit dismissed its claims with prejudice and agreed to “a voluntarystipulated injunction that plaintiff was to continue paying its assessments.” (CT 659; see also CT 073, 188-190.) It cannot now claim that these payments were made under duress for purposesof a refund under McKesson. Norcanit 33 scanned by LIBRARY |: obtain relief from this stipulated judgmentin this action. Accordingly, the trial court did noterr in granting summaryjudgment for the Defendants, and the trial court’s order should be affirmed. CONCLUSION. Although the Commission is not a party to this action, Country Eggs seeks a refund of assessments that it paid to the Commission. The refund sought by Country Eggsis not available in this action, because the assessments were not paid to the Defendants, nor did the Defendants obtain a direct benefit from the payment of assessments. Furthermore, Country Eggs is not entitled to a refund because the assessments that it seeks were paid pursuantto a voluntary stipulated injunction, that was part ofa final federal court judgment. Accordingly, Defendants respectfully request that the trial court’s judgmentbe affirmed. DATED: July 29, 2004. Respectfully submitted, BILL LOCKYER, Attomey General Respondents 10072001 apd | scanned by LIBRARY © CERTIFICATE OF BRIEF LENGTH [California Rules of Court, rule 14(c)(1)] Pursuant to California Rules of Court, rule 14(c)(1), that the foregoing brief contains 8,342 words, as shown by the word count function of the computer program used to preparethe brief. Dated: July 29, 2004 LINDA L. BER: Deputy Attorney General . | scanned by LIBRARY © DECLARATION OF SERVICE BY OVERNIGHT MAIL AND U.S. MAIL Case Name: COUNTRY EGGS,INC., a California corporation v. A.G. KAWAMURA,in his official capacity as the Secretary of the California Department of Food and Agriculture; CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE; and STATE OF CALIFORNIA No:: 02A804521 I declare: I am employed in the Office of the Attorney General, whichis the office of a memberof the California State Bar, at which member’s directionthis service is made. I am 18 years of age or oldcr and nota party to this matter: my business address is: 1300 I Street, P.O. Box 944255, Sacramento, California 94244-2550. On August 3, 2004, I served the attached Respondent’s Brief as follows: by placing a true copy thereof enclosedin a sealed envelope with postage thereon fully prepaid with the California Overnight courier service addressed as follows: Brian C. Leighton The Law Office ofBrian C. Leighton 701 Pollasky Avenue Clovis, CA 93612 Attomey for Plaintiff/Appellant 5 Copiesto: California Supreme Court San Francisco Office 303 2™ Street, So. Tower San Francisco, CA 94107-1317 and via U.S. mail by placing a true copy thereofenclosedin a sealed envelope with postage thereon fully prepaid, in the internal mail collection system at the Office of the Attorncy | scaniied by LIBRARY © General at 1300 I Street, P.O. Box 944255, Sacramento, California 94244-2550, addressed as follows: The Honorable Loren E. McMaster Sacramento Superior Court, Dept. 53 720 Ninth Street Sacramento, CA 95814-1389 I declare under penalty ofperjury underthe laws ofthe State of California the foregoing is true and correctandthat this declaration was executed on August3, 2004,at Sacramento, California. Kathleen Dobson KellerDocs Declarant Signature 10073233.wpd L scanned by LIBRARY @