High Court Strikes Down Mushroom Order

June 26, 2001

The U.S. Supreme Court Monday ruled that the mushroom promotion order is unconstitutional, saying it violates free-speech rights under the First Amendment. However, the decision made a distinction that the mushroom industry mostly is unregulated as opposed to an earlier decision on a similar order for the stone fruit industry that upheld the order, partly because the stone fruit industry is more regulated.

The 6-3 decision was a victory for the United Foods Inc., a company that has refused since 1996 to contribute assessments to help finance generic ads for the mushroom industry.

Chief Justice William Rehnquist and Justices Anthony Kennedy, John Paul Stevens, Antonin Scalia, Clarence Thomas, and David Souter voted against the order, while Justices Sandra Day O'Connor, Ruth Bader Ginsburg, and Steven Breyer dissented.

Dan Hammond, chairman of the Cattlemen's Beef Promotion and Research Board, said the board was analyzing the decision, but he noted the mushroom program "is as different from the beef checkoff as the mushroom industry is from the beef industry."

The mushroom assessment is paid by handlers, he said, and in the mushroom case, one handler preferred to advertise its own product, rather than advertise generic products. "In the case of the beef checkoff, the assessment is paid by producers, each of whom benefits from an increase in beef demand."

Unlike the mushroom industry the beef industry does deal with federal regulations, he said. Examples include the federal inspection system, the grading system, and the packers and stockyards administration. "With these differences in mind, it would be inappropriate to assume any implications of the mushroom decision with regard to the beef checkoff program," Hammond added.

Agriculture Secretary Ann Veneman said USDA was studying the decision "to determine what actions should be taken with respect to the program. USDA generally regards promotion activities conducted under federal marketing agreement and order programs and federal research and promotion programs to be effective tools for market enhancement."