[CERTIFIED FOR PARTIAL PUBLICATION
This appeal concerns a California raisin marketing order (the Marketing Order) first issued in 1998 by the Department of Food and Agriculture (the Department) under the California Marketing Act of 1937 (Food & Agr. Code, § 58601 et seq.) (the CMA).
The present appeal arises from two cases consolidated for purposes of trial. The first case, Lion Raisins, Inc., v. Ross, case No. C086205, involves a complaint for declaratory and injunctive relief filed by Lion Raisins, Inc., et al. (collectively, Lion). The Lion complaint, which challenges the validity of the Marketing Order on a wide range of issues, seeks a declaration that the Marketing Order is unconstitutional and invalid, an injunction against future assessments, and a refund of all assessments paid since the 1999-2000 crop year.
The trial court initially entered judgment against the Department on the consolidated cases, concluding the Marketing Order was invalid because there was insufficient evidence that the Marketing Order was necessary to address severe economic conditions in the raisin industry. (People ex rel. Ross v. Raisin Valley Farms LLC (2015) 240 Cal.App.4th 1254, 1259 [193 Cal.Rptr.3d 246] (Ross).) The Department appealed and we reversed, concluding the trial court's interpretation of the CMA was too narrow. (Ross, supra, at p. 1267.) We remanded the matter to the trial court for further proceedings consistent with our opinion. (Ibid.)
On remand, after additional briefing, the trial court entered judgments in favor of the Department, denying the challenges to the Marketing Order. Lion and Raisin Valley appeal from those judgments, asserting numerous errors. First, appellants contend the court erred in rejecting their claim that the Board's promotional activities violated the "varietal benefit" and "non-disparagement" provisions of the Marketing Order. Second, appellants contend the court erred in concluding that the Raisin Bargaining Association (the RBA) was lawfully allowed to bloc vote as a cooperative marketing association in referendums to approve the Marketing Order. Third, they contend the court erred in concluding that the bloc-voting provisions of the CMA are constitutional. Fourth, they contend that the court erred in allowing the Department to abandon its "cornerstone" finding for the Marketing Order which, they argue, was not supported by the evidence. Fifth, they contend the court erred in concluding the Department had no duty to consider reasonable alternatives before adopting the Marketing Order. And finally, they contend the court erred in rejecting their claim that the Marketing Order violates their constitutional rights to free speech and free association.
With regard to the appeal in the Lion case, we shall modify the judgment to dismiss the "varietal benefit" and "non-disparagement" claims due to appellants' failure to exhaust administrative remedies, and affirm the judgment as modified. We dismiss the appeal in the Raisin Valley case as premature under the one final judgment rule.
The CMA and its federal counterpart, the Agricultural Marketing Agreement Act of 1937 (7 U.S.C. § 601 et seq.) (the AMAA), were legislative responses to severe problems encountered by the agricultural industry during the Great Depression. (Ross, supra, 240 Cal.App.4th at p. 1257; see also Lion Raisins, Inc. v. U.S. (Fed.Cir. 2005) 416 F.3d 1356, 1358.) The programs were rooted in the legislative judgment that governmental intervention was necessary to preserve the agricultural industry. (Ross, at p. 1257.)
In enacting the CMA, the Legislature found that there was "`unreasonable and unnecessary economic waste'" of California's agricultural wealth due to, among other things, disorderly marketing of commodities, unfair competition in the marketing of commodities, and the inability of producers to maintain present markets or develop new or larger markets for California-grown commodities. (Voss v. Superior Court (1996) 46 Cal.App.4th 900, 907 [54 Cal.Rptr.2d 225] (Voss); see § 58651.) According to the Legislature, such conditions "jeopardize the future continued production of adequate supplies of food ... and prevent producers from obtaining a fair return from their labor...." (§ 58651.) Thus, in enacting the CMA, the Legislature declared its intent to aid producers in preventing economic waste, developing more efficient and equitable methods of marketing commodities, and restoring and maintaining their purchasing power at a more adequate, equitable, and reasonable level. (§ 58652.)
To effectuate its purposes, the CMA authorizes the Secretary of the Department (formerly the Director of Agriculture of the State of California) to enter into "`marketing agreements'" and issue "`marketing orders.'"
The CMA authorizes marketing orders that control, among other things, the quantity or quality of any commodity produced for market. (Ross, supra, 240 Cal.App.4th at p. 1257; §§ 58881-58888; 7 U.S.C. § 608c(6).) The CMA also separately authorizes marketing orders that establish "plans for advertising
The CMA provides that any advertising or promotional plan must be generic and "directed toward increasing the sale of the commodity without reference to any private brand or trade name that is used by any handler with respect to the commodity regulated by the marketing order...." (§ 58889, subd. (b).) The CMA prohibits advertising or sales promotion programs that make "false or unwarranted claims in behalf of any product, or disparages the quality, value, sale, or use of any other commodity." (§ 58889, subd. (d).)
Funding of a marketing order comes from the producers or handlers directly affected by it. (Ross, supra, 240 Cal.App.4th at pp. 1257-1258.) The CMA gives the Department the power to levy and collect from each affected producer or handler an assessment calculated to defray the costs of the order. (§§ 58921, 58925, 58926, 58929.)
The CMA describes the procedure for adopting a marketing order. It provides that whenever the Department has reason to believe that a marketing order (or amendments to a marketing order) will promote the policy of the CMA with respect to any commodity, the Department shall give notice and hold a hearing. (§§ 58771, 58782; see also §§ 58773-58781, 58783-58788.) The notice must include the date and place of the hearing, the commodity and area covered by the proposed marketing order, and a statement that the Department will receive, at the hearing, evidence about the subjects for which the Department is required to make findings as a precondition to the issuance of an order. (§ 58774.)
The hearing on a proposed marketing order must be public, and all testimony must be received under oath. (§ 58782; see also § 58786.) The CMA requires the Department to consider all relevant matter presented at the hearing and to preserve a complete record of the proceedings for judicial review. (§§ 58782, 58783, 58787; Voss, supra, 46 Cal.App.4th at p. 924.) Upon conclusion of the hearing, but prior to issuing a marketing order, the Department must make specific findings appropriate for the type of order proposed. (§§ 58811-58813; Ross, supra, 240 Cal.App.4th at p. 1258.)
To adopt a marketing order with provisions for advertising, sales promotion, or research, the Department must find that: (1) the proposed marketing order will "tend to effectuate" the declared purposes and policies of the CMA; (2) the proposed marketing order is reasonably calculated to attain the objectives sought in the order; and (3) the powers under the CMA are being exercised only to the extent necessary to attain such objectives. (§ 58813, subds. (a)-(c).) These findings must be based on the facts, testimony, and
Even if the Department makes the required findings, a marketing order will not become effective unless it is approved by the prescribed percentage of persons affected by the order. (§§ 58991-58993.) The Department may elect whether such approval shall be determined by written assent or by referendum. (§§ 58786, 58787, 58991-58998.)
For a referendum to be valid, at least 40 percent of eligible affected producers must vote. (§ 58993, subd. (c).) For the referendum to pass, it must be approved by either (1) at least 65 percent of the voters, representing not less than 51 percent of the total quantity of the commodity produced for market, or (2) at least 51 percent of the voters, representing not less than 65 percent of the total quantity of the commodity produced for market. (§ 58993, subd. (c).) The CMA permits "any nonprofit agricultural cooperative marketing association, which is authorized by its members so to assent," to bloc vote on behalf of that association's members. (§ 58999.)
Approved marketing orders are administered and enforced by the Department. (§ 58711.) But the CMA requires that marketing orders establish an advisory board to assist the Department in the administration of the order. (§§ 58841, 58842.) The advisory board's duties include recommending rules and regulations, receiving and reporting complaints of violations of the marketing order, and assisting in preparing budgets and collecting funds to cover expenses. (§§ 58846, 58923.)
Members of an advisory board may be nominated by the affected producers and handlers, but are appointed by, and serve at the pleasure of, the Department. (§ 58841.) While the members of an advisory board generally must represent the agricultural industry covered by the marketing order, the Department may appoint one person to represent the public. (§§ 58842-58843.) For any marketing order affecting raisin producers, the Department also must appoint one advisory board member to represent "cooperative bargaining associations." (§ 58842.5; see also § 54401 [defining "cooperative bargaining association"].)
A marketing order has no fixed lifespan. (Voss, supra, 46 Cal.App.4th at p. 921.) It can be terminated at any time and must, at minimum, be reapproved every five years. (§§ 59081, 59082, 59086.)
BACKGROUND FACTS AND PROCEDURE
The challenged Marketing Order
For decades, until the early 1990's, there was a state marketing order for raisins administered by the California Raisin Advisory Board, best known for creating the "Dancing Raisins" promotional campaign. However, due to disagreements between the producers (growers) and independent packers, the prior marketing order was terminated in 1994.
At the time the prior marketing order was terminated, California's raisin industry was experiencing persistent oversupplies of raisins. Although the federal government had implemented programs to reduce the oversupply, the programs had the effect of reducing producer profits. Thus, many participants in the raisin industry, including the RBA and Sun-Maid Growers of California (Sun-Maid), a large cooperative marketing association, were supportive of a new state marketing order.
In March of 1998, the RBA and Sun-Maid, collectively representing a majority of the producers in the raisin industry, proposed a new Marketing Order designed to increase demand for raisins. The proposed Marketing Order declared that the "inability to maintain or expand present markets, or to develop new or larger markets results in an unreasonable and unnecessary waste of the [state's] agricultural wealth," and that it is "therefore in the public interest for the producers of California raisins to establish a [marketing board] to conduct market development activities to improve the demand for all categories of raisin usage...." To further this goal, the proposed Marketing Order would authorize a research and promotional program administered by the Department and funded by an assessment on raisin producers.
To help the Department administer the program, the proposed Marketing Order established a Board consisting of 15 members, 13 of whom must be producers or persons authorized to represent the producers (the producer members), with one member representing the general public, and one member representing the largest cooperative bargaining association (here, the RBA). The Marketing Order specifies that nominations and appointments of the producer members must be made from three groups—cooperative marketing associations, cooperative bargaining associations, and other (i.e., independent)
In accordance with the CMA, the Department held a public hearing on the proposed Marketing Order, receiving testimony from 16 witnesses. Following the hearing, and receipt of additional written comments, the Department adopted "economic findings" in support of the proposed Marketing Order.
In its findings, the Department listed the policies and purposes of the CMA, as described in sections 58652 and 58654, and then found that the Marketing Order would tend to effectuate those policies and purposes by funding research regarding the potential health benefits of raisins, educating the public about the versatility and healthful properties of raisins, and fostering efficient marketing and promotion of raisins, so as to increase the demand for raisins, better correlate raisin supply with demand, decrease economic waste, and increase the purchasing power of raisin producers. Based on its findings, the Department issued the proposed Marketing Order subject to the approval by referendum of the affected raisin producers.
Between June and July of 1998, the Department held the required referendum. For purposes of voting on the referendum, the Department took the position that Sun-Maid and the RBA could elect to bloc vote on behalf of their membership as "cooperative marketing associations" under section 58999. Both Sun-Maid and the RBA elected to bloc vote, although both also allowed their members to "opt out" and vote separately if they wished. Based on the voting results of the referendum, the Marketing Order was approved.
In 2001, the Department held the first "continuation" (reapproval) referendum on the Marketing Order. For the 2001 referendum, neither Sun-Maid nor the RBA elected to bloc vote. Nevertheless, producers overwhelmingly voted to continue the Marketing Order.
At the next continuation referendum, in 2006, the Marketing Order again was approved. For the 2006 referendum, both Sun-Maid and the RBA elected to bloc vote.
The Board's advertising program
Since its inception, the Board's advertising and promotion has been a generic program focusing on the virtues of California raisins generally, without reference to particular brands or sellers. The Board's first major campaign, entitled "Look Who's Cooking with California Raisins," focused on using celebrity chefs to promote new uses for raisins. Subsequent campaigns included the "Wise Choice" campaign, which was designed to show how raisins could be used by people looking for "healthy, nutritious foods on the go," and the "Solar Powered Goodness" campaign, which emphasized the benefits of eating natural, sun-dried fruit.
The Board also maintains a Web site and produces brochures. Prior to 2010, some of the Web pages and brochures referred to Thompson seedless raisins and mentioned the "tray-drying" method. In addition, the phrase "Thompson Seedless Grapes make the best California raisins" was used in a promotional blurb in a brochure and posted in a few places on the Board's approximately 1,260-page Web site. The materials containing these references constituted a small part of the Board's promotional materials. The Board has since updated the materials to remove the phrase that "Thompson Seedless Grapes make the best California raisins," to replace references to "Thompson Seedless" grapes with "Natural Seedless" grapes, and to include "dried-on-the-vine" methods of drying raisins.
Trial and first appeal
When the Lion complaint originally was filed in 2002, it challenged the Marketing Order only on free speech/free association grounds. That case was then stayed for several years pending the outcome of certain appellate cases.
As amended, the Lion complaint alleged five causes of action. The first two causes of action alleged the Marketing Order violates the free speech and free
The Department's complaint against Raisin Valley alleged that the defendants had improperly failed and refused to remit assessments due under the Marketing Order. The Department sought an injunction enjoining Raisin Valley from committing further violations of the Marketing Order and compelling Raisin Valley to pay overdue assessments (plus costs and penalties).
Raisin Valley's amended cross-complaint alleged nine causes of action against the Department. The first cause of action alleged the Marketing Order violates the police power because the Board's membership was inconsistent with section 58842.5. The second cause of action alleged the Marketing Order violates the police power because its reapproval provisions were inconsistent with sections 58993 and 59086. The third cause of action alleged the Marketing Order is invalid because the Department allowed the RBA to bloc vote, in violation of section 58999 (and/or due process). The fourth, fifth, sixth, and seventh causes of action alleged the CMA's bloc-voting provisions violate the state and federal equal protection clauses, federal free association rights, and federal due process. The eighth and ninth causes of action alleged that the Marketing Order violates the state constitutional rights of free speech and free association, and state and federal due process, by compelling appellants to subsidize the speech of, and associate with, the Board.
In 2013, following a 19-day bench trial, and posttrial briefing, the court granted judgment for the appellants. Although numerous issues were presented by the parties, the trial court's judgment rested on a single issue—a finding that the record lacked sufficient evidence to support the finding that the Marketing Order would "`tend to effectuate the declared purposes and policies'" of the CMA. (Ross, supra, 240 Cal.App.4th at p. 1256.)
Relying on the legislative findings of the CMA, the bulk of which were adopted during the Great Depression, the trial court concluded that the Department cannot adopt a marketing order under the CMA unless the order is necessary to address adverse economic conditions so severe as to threaten the continued viability of the industry. (Ross, supra, 240 Cal.App.4th at pp. 1264-1265.) The trial court found no evidence in the record before it that the raisin industry was suffering from a severe economic crisis. (Id. at
In Ross, supra, 240 Cal.App.4th at pages 1256-1257, we reversed the trial court's judgment. We held the trial court erred in construing section 58813, subdivision (b) to be met only if a marketing order was necessary to address a severe economic crisis. (Ross, at p. 1267.) We noted that subsequent to its adoption, the CMA was amended to divide marketing orders into "two camps: those that restrict the supply of a commodity (i.e., restrict quantity), and those that do not." (Ross, at p. 1265.) As a result of that amendment, only marketing orders that restrict the supply of a commodity "require economic findings concerning the correlation of supply and demand and a particular level of producer purchasing power, as well as the consideration of particular economic factors...." (Id. at p. 1258; §§ 58811, 58812.)
We held that marketing orders that do not restrict supply—including orders for advertising, sales promotion, or research—do not require economic findings concerning the correlation of supply and demand and a particular level of purchasing power, or the consideration of particular economic factors. (Ross, supra, 240 Cal.App.4th at pp. 1258, 1265-1266.) Instead, such orders are valid as long as they are supported by "generalized findings" that the order will "`tend to effectuate'" the purposes and policies of the CMA.
The court's decision after remand
On remand, the trial court reconsidered whether there was sufficient evidence to support the Department's finding that the Marketing Order would tend to effectuate the purposes and policies of the CMA. Applying a broader interpretation of section 58813, the court concluded that there was substantial evidence to support that finding.
The trial court then addressed the "remaining challenges" to the Marketing Order, which it identified as (1) whether the Department violated section 58999 by allowing the RBA to bloc vote; (2) whether section 58999 is unconstitutional; (3) whether the Marketing Order violated appellants' free speech or free association rights; (4) whether the Board's advertising program violated the Marketing Order by failing to equally promote and/or disparaging dried-on-the-vine raisins; and (5) whether the Marketing Order is invalid
Violation of Section 58999
Under section 58999, only a "nonprofit agricultural cooperative marketing association" is entitled to bloc vote on behalf of its members. (§ 58999.) That term, however, is not defined. Before the Department promulgated the Marketing Order, Department staff considered whether the RBA was a cooperative marketing association for purposes of section 58999, and determined that it was.
To resolve this claim, we must answer the following two questions: (1) whether a cooperative bargaining association may qualify as a cooperative marketing association within the meaning of section 58999 and, if so, (2) whether the RBA qualified as a marketing association because it was involved in marketing.
"`In construing a statute, our fundamental task is to ascertain the Legislature's intent so as to effectuate the purpose of the statute. [Citation.]
Our focus here is on section 58999's use of the term "nonprofit agricultural cooperative marketing association," which we logically may conclude is a nonprofit agricultural cooperative association involved in "marketing." (§§ 54002, 54033, 54036, 54037.) The relevant question, then, is how to define "marketing."
As noted, neither the CMA nor California's cooperative association laws directly define "marketing" or a "marketing association," but the CMA's general definitions do provide helpful guidance. Among other terms, the CMA broadly defines "producer marketing" to mean "any or all operations which are performed by any producer in preparing [a commodity] for market. It includes selling, delivering, or disposing of for commercial purposes, to any handler any commodity which the producer has produced." (§ 58621; accord, § 58614; see also § 66537.) Likewise, under section 58620, a "producer" is defined to mean any person engaged in the business of producing a commodity "for market" (§ 58620), and is distinguished from "handlers" or "processors," which may engage in their own marketing. (§§ 58611, 58619, 58712, 58741, 58881; see also §§ 54039, 54261 [referring to agreements between cooperative associations and their members as a "marketing contracts"].) These definitions show, contrary to what appellants argue, that "marketing" is not limited to sales of "processed" raisins. Rather, producers may engage in "marketing" merely by selling or delivering the commodity to a handler for commercial purposes.
We find further support for this conclusion in the language of section 58993, under which no marketing order which directly affects producers is effective until approved by the specified percentage of producers affected by the order. The statute provides that for a referendum to pass, it must be
Our construction also is consistent with the ordinary definition of the word "marketing." In its broadest sense, the dictionary defines marketing as the "aggregate of functions involved in moving goods from producer to consumer." (Merriam-Webster's Online Dictionary <https://www.merriam-webster.com/dictionary/marketing> [as of May 25, 2021], archived at <https://perma.cc/SZ9D-PQ6Q>; see Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121-1122 [29 Cal.Rptr.3d 262, 112 P.3d 647] ["When attempting to ascertain the ordinary, usual meaning of a word, courts appropriately refer to the dictionary definition of that word"].)
We are not aware of any cases construing the meaning of the term "marketing" for purposes of the CMA, but courts have construed that term for purposes of the Capper-Volstead Act (7 U.S.C. §§ 291, 292), which provides limited antitrust immunity for cooperatives that market their members' products. In Treasure Valley Potato Bargaining Assn. v. Ore-Ida Foods, Inc. (9th Cir. 1974) 497 F.2d 203, the Ninth Circuit held that two bargaining associations, the principal function of which was to bargain collectively for prices, terms, and conditions of preseason potato contracts, were entitled to antitrust immunity even though they did not process, handle, buy, or sell any potatoes. The court reasoned that the associations were entitled to immunity because they performed marketing functions "in bargaining for the sales to be made by their individual members," which "necessarily requires supplying market information and performing other acts that are part of the aggregate of functions involved in the transferring of title to the potatoes." (Id. at p. 215; accord, Northern California Supermarkets, Inc. v. Central California Lettuce Producers Cooperative (N.D.Cal. 1976) 413 F.Supp. 984, 991-992.)
This brings us back to the language of section 58999, which provides: "In finding whether [a] marketing order ... is ... approved or favored by producers ..., the [Secretary] shall consider the approval of any nonprofit agricultural cooperative marketing association, which is authorized by its members so to assent, as being the assent, approval, or favor of the producers that are members of, or stockholders in, that nonprofit agricultural cooperative marketing association." (§ 58999.) Because the purpose of the statute is limited to the approval of marketing orders by affected producers, which themselves must have "marketed" the commodity, it is logical to construe the term "marketing" to include "producer marketing" as defined in section 58621. It follows that for purposes of section 58999, a cooperative marketing
Appellants argue that federal law and the state Marketing Order distinguish between marketing and bargaining associations for purposes of selecting members for the advisory board/committee. Appellants are correct (see, e.g., §§ 58841-58842.5), but they do not explain why this should control the interpretation of a statute which uses different language and has nothing to do with allocating seats on the advisory board.
Appellants also suggest that an organization cannot be both a bargaining association and a marketing association. But appellants have not cited any authority to support their claim that a bargaining association cannot also be a marketing association for purposes of the bloc-voting provisions in section 58999. Accordingly, we conclude, as did the trial court, that a cooperative bargaining association may qualify as a cooperative marketing association within the meaning of section 58999 if it is involved in marketing.
Having so concluded, we next consider whether the trial court correctly concluded that the RBA was a marketing association because it was involved in marketing. As appellants acknowledge, the facts relating to the RBA's organization and operations are not in dispute. The interpretation and application of a statute to an undisputed set of facts is a question of law, subject to de novo review. (Stanford Vina Ranch Irrigation Co. v. State of California (2020) 50 Cal.App.5th 976, 998 [264 Cal.Rptr.3d 509].)
The evidence in the record shows that the RBA was formed as a nonprofit agricultural cooperative association authorized to render "selling" and "marketing" services to its members. The RBA's bylaws specifically authorize it to "assent in writing or otherwise, on behalf of the members of [the RBA] and all producers of products marketed or to be marketed by [the RBA], to any marketing order or amendment thereto...." The RBA membership agreement, which sets forth the terms of membership, provides that the
Although deliveries to processors are made in the name of the producer, and most of the purchase price is paid directly to the producer, the actual sale is between the RBA and the processor/packer. Title and the right to possession of the product passes from the producer to the RBA, and then from the RBA to the processor/packer. Members can express preferences respecting the processor/packer to which they wish to deliver their product, but the RBA has the ultimate authority to decide where the product is delivered. And the RBA has the "sole discretion" to determine the price at which the product is sold.
Based on these facts, we conclude the trial court correctly determined that the RBA was a marketing association. Thus, we uphold the trial court's conclusion that the RBA was authorized to bloc vote under section 58999.
Constitutional Challenge to Section 58999
In addition to arguing that the Department violated section 58999 by permitting the RBA to bloc vote as a nonprofit agricultural cooperative marketing association, appellants challenge the constitutionality of the bloc-voting statute itself. Appellants contend section 58999 violates the equal protection clause because it gives cooperative marketing associations, such as Sun-Maid, disproportional voting power.
The critical first step when determining whether state legislation violates the equal protection clause is to determine the appropriate level of
In the typical equal protection case involving social welfare or economic legislation, the classification need only bear a rational relationship to a conceivable legitimate state purpose. (Hernandez v. City of Hanford (2007) 41 Cal.4th 279, 298-299 [59 Cal.Rptr.3d 442, 159 P.3d 33]; Board of Supervisors v. Local Agency Formation Com. (1992) 3 Cal.4th 903, 913 [13 Cal.Rptr.2d 245, 838 P.2d 1198] (Board of Supervisors).) On the other hand, statutes which create suspect classifications or impinge on fundamental rights are subjected to strict scrutiny. (Hernandez, supra, 41 Cal.4th at p. 299.) "Under this very severe standard, a discriminatory law will not be given effect unless its classification bears a close relation to the promoting of a compelling state interest, the classification is necessary to achieve the government's goal, and the classification is narrowly drawn to achieve the goal by the least restrictive means possible. [Citations.]" (Board of Supervisors, supra, 3 Cal.4th at p. 913.)
The right to vote is a fundamental right. (Board of Supervisors, supra, 3 Cal.4th at p. 913.) But not every law that "touches on the right to vote" requires strict scrutiny. (Board of Supervisors, at p. 914; accord, People v. Boulerice (1992) 5 Cal.App.4th 463, 473 [7 Cal.Rptr.2d 279]; see also California Gillnetters Assn. v. Department of Fish & Game (1995) 39 Cal.App.4th 1145, 1161 [46 Cal.Rptr.2d 338] [even statutes which severely restrict the pursuit of an occupation are tested under the rational basis test].) The question presented here is whether section 58999 impinges on the right to vote in a manner that requires the application of strict scrutiny.
Appellants contend section 58999 should be subjected to strict scrutiny because it offends the "one person, one vote" principle articulated in Reynolds v. Sims (1964) 377 U.S. 533 [12 L.Ed.2d 506, 84 S.Ct. 1362], under which each person's vote must be approximately equal in weight to that of any other person in a representative election. (Id. at pp. 568, 579; accord, Gray v. Sanders (1963) 372 U.S. 368, 379 [9 L.Ed.2d 821, 829-830, 83 S.Ct. 801] ["Once the geographical unit for which a representative is to be chosen is designated, all who participate in the election are to have an equal vote"].)
However, as appellants acknowledge, there is a recognized exception to the "one person, one vote" requirement when the election relates to a governmental body performing a specialized governmental function that has a disproportionate effect on a definable segment of the community. (Bolen, supra, 1 Cal.4th at p. 665.) When these conditions are met, "the strict demands of Reynolds [v. Sims], supra, 377 U.S. 533, do not apply and voting power `may be apportioned in ways which give greater influence to the citizens most affected by the organization's functions' [citation] without violating the guarantee of equal protection...." (Bolen, supra, at p. 665.)
The United States Supreme Court applied this exception in two leading cases: Salyer Land Co. v. Tulare Water District (1973) 410 U.S. 719 [35 L.Ed.2d 659, 93 S.Ct. 1224] (Salyer) and Ball v. James (1981) 451 U.S. 355 [68 L.Ed.2d 150, 101 S.Ct. 1811] (Ball). Salyer involved a challenge to the election of the board of directors of a small California water storage district. (Salyer, supra, 410 U.S. at pp. 721, 724-725.) The statutory scheme at issue in Salyer limited voting to owners of land within the district, and apportioned voting power according to the assessed value of each owner's land. (Id. at pp. 724-725.) The voting scheme was challenged on equal protection grounds by, among others, residents of the district who were not allowed to vote because they did not own land within the district. (Id. at p. 724.) In upholding the property-based voting scheme, the court concluded that the "one person, one vote" requirement did not apply because the district's purposes were specialized and narrow and its activities disproportionately affected the voters responsible for paying its costs. (Id. at pp. 727-730.)
Ball, supra, 451 U.S. 355 similarly involved a challenge to the procedures used to elect a water storage district board. (Id. at p. 357.) Similar to Salyer, the statute limited voting to those owning land within the district, with voting power weighted in proportion to acreage owned. (Ball, at p. 357.) Although the district at issue in Ball was significantly larger and performed more functions than the district in Salyer, including selling power to almost half the state's population, the court again concluded that the district fell within the exception to the one person, one vote principle. (Ball, at pp. 365-366, 371.) The court reasoned that, despite its more diverse activities, the district's functions were still limited, and it did not exercise the sort of general government powers that triggers the "one person, one vote" requirement, such
Our Supreme Court applied the same two-pronged test in Bolen, supra, 1 Cal.4th 654. Bolen involved a validation proceeding filed by a transit district to validate special benefit assessment districts created to help defray the costs of a mass transit system through assessments on owners of commercial property. (Id. at pp. 659-660, 662-663, 673.) Although the transit district could establish the assessment districts without voter approval, its actions were subject to referendum if requested by the owners of at least 25 percent of the assessed value of real property within the district. (Id. at p. 660.) By statute, voting at such a referendum was limited to the owners of the real property who were subject to the assessments, and the voting power was apportioned based on the assessed value of the property. (Ibid.) Interveners in the validation proceeding challenged the validity of the assessment districts, contending the statute's property-based voting scheme violated the equal protection clause. (Id. at p. 663.)
In lockstep with the reasoning in Salyer and Ball, the court in Bolen concluded that the challenged voting scheme fell within an exception to the "one person, one vote" requirement because (1) the benefit districts were special-purpose government units lacking "`general governmental powers,'" and (2) the class of eligible voters were disproportionately affected by the election issue in that they were responsible for paying the assessments.
Applying these authorities, we agree with the trial court that the CMA's voting scheme does not require application of strict scrutiny. Voting in referendums on marketing orders does not involve the election of officials who will exercise general governmental powers, like voting in an election for national, state, or local representatives. (Cecelia Packing Corp. v. United States Dept. of Agriculture/Agricultural Marketing Service (9th Cir. 1993) 10 F.3d 616, 624 (Cecelia Packing).) Rather, it involves the establishment of an advisory board, which has limited authority and performs specialized administrative functions generally related to the marketing, processing, distributing, or handling of agricultural commodities. (§§ 58712, 58841, 58846, 58881.) And the functions of the Board at issue in this case are even more
We draw additional support for our conclusion from the Ninth Circuit's decision in Cecelia Packing, which rejected an equal protection challenge to the cooperative bloc-voting provisions under the federal AMAA. (Cecelia Packing, supra, 10 F.3d at pp. 617-618.) The court concluded that because the federal marketing order involves "`relatively limited authority,'" and is "not `what might be thought as "normal governmental" authority,'" the legislation should be reviewed under the rational relationship test. (Id. at pp. 624-625.) We reach the same conclusion here.
Turning to the second prong of the Bolen test, which looks to the impact of the election outcome on voters and nonvoters, we find that there are genuine differences in the interests of those enfranchised and those disenfranchised under the legislation.
Appellants complain that the bloc-voting provision of section 58999 triggers strict scrutiny because it gives cooperative marketing associations disproportional voting power. However, when the strict demands of the "one
Under the rational relationship test, we conclude that section 58999's bloc-voting provisions are rationally related to the legitimate governmental purposes of encouraging producers to join cooperative marketing associations, promoting orderly and efficient marketing of commodities, and preventing or reducing economic waste. (§§ 58652, 58654; see also Corp. Code, §§ 14550, 14551.) As the Ninth Circuit summarized in Cecelia Packing, supra, 10 F.3d 616: By allowing the cooperative marketing associations to bloc vote, the government furthers its goal of encouraging producers to "`join together ... to increase their collective economic strength and advantage,'" thereby contributing to more stable and efficient markets. (Id. at p. 625, fn. 8.)
For these reasons, we reject appellants' constitutional challenge to the bloc-voting provisions of section 58999.
We modify the judgment in the Lion case (C086205) to dismiss the Lion appellants' "varietal benefit" and "non-disparagement" claims due to their failure to exhaust administrative remedies. As modified, we affirm the judgment. The appeal in the Raisin Valley case (C086206) is dismissed. The Department shall recover its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
Blease, Acting P. J., and Hull, J., concurred.