24 DEPARTMENTAL DECISIONS In re: CAL-ALMOND, A DIVISION OF MORVEN PARTNERS L.P., A DELAWARE LIMITED PARTNERSHIP. 97 AMA Docket No. F&V 97-0001. Decision and Order filed March 6, 1998. Dismissal of petition - First amendment — Almonds - Motion to dismiss Motion to amend petition. The Judicial Officer affirmed Chief Judge Palmer's (ALJ) Initial Decision and Order dismissing a Petition filed by an almond handler under section 8c(15)(A) of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. § 608c(15)(A)) (AAA), seeking relief from the requirement that handlers pay assessments for advertising under the Almond Order (7 C.F.R. pt. 981) on the ground that compelled assessments under the Almond Order violate Petitioner's First Amendment right to freedom of speech. The decision in Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), in which the Court held that marketing orders which compel handlers of California tree fruit to fund generic advertising does not implicate the First Amendment, is dispositive of the First Amendment issue in the proceeding. Any doubt that Wileman has equal application to the Almond Order was overcome in Department of Agric. v. CalAlmond, Inc., 117 S. Ct. 2501 (1997). Petitioner is not prohibited or restrained by the AAA or the Almond Order from communicating any message to any audience; Petitioner is not compelled to speak by the AAA or the Almond Order; the promotion program under the AAA and the Almond Order has no political or ideological content; and Petitioner is not compelled by the AAA or the Almond Order to endorse or finance any political or ideological views. Thus, the requirement under the AAA and the Almond Order that Petitioner fund the promotion of almonds does not implicate Petitioner's rights to freedom of speech or association. Further, the use of assessments to defray the costs of litigation to defend a marketing order from a legal challenge against the use of assessments for generic advertising is germane to the purposes of the marketing order and satisfies the test in Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507 (1991). The Rules of Practice (7 C.F.R. § 900.52(c)) provide that an administrative law judge's decision upon a motion to dismiss must be made after due consideration of the motion and any opposition to the motion but, otherwise, leave the timing of a decision on a motion to dismiss to the discretion of the administrative law judge. When considering a motion to dismiss filed in accordance with the Rules of Practice (7 C.F.R. §§ 900.52(c)(2).71), allegations of material fact in a petition must be construed in the light most favorable to a petitioner. However, even if the allegations of material fact in the Petition are construed in the light most favorable to Petitioner, Wileman is dispositive of Petitioner's First Amendment claims and the Petition fails to state a claim upon which relief can be granted. The formalities of court practice do not apply to motions filed in administrative proceedings, and, where Respondent is not prejudiced, the Chief ALJ did not err by treating Petitioner's statements as a motion to amend the Petition and exercising authority under 7 C.F.R. § 900.59(a)(2) to rule on Petitioner's "motion" to amend its Petition. The Chief ALJ correctly denied Petitioner's motion to amend the Petition based on the fact that the amendment requested by Petitioner would be a challenge to a "speech related" action of the Almond Board which, according to Wileman, is not subject to scrutiny under the standards of First Amendment jurisprudence. Gregory Cooper, for Respondent. Brian C. Leighton, Clovis, California, for Petitioner. Initial decision issued by Victor W. Palmer, Chief Administrative Law Judge. 57 Agric. Dec. 24 Cal-Almond, a Division of Morven Partners L.P., a Delaware Limited Partnership [hereinafter Petitioner], instituted this proceeding by filing a Petition on November 26, 1996, pursuant to section 8c(15)(A) of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. § 608c(15)(A)) [hereinafter the AAA]; the marketing order regulating Almonds Grown in California (7 C.F.R. §§ 981.1-.474) [hereinafter the Almond Order]; and the Rules of Practice Governing Proceedings on Petitions To Modify or To Be Exempted From Marketing Orders (7 C.F.R. §§ 900.50-.71) [hereinafter the Rules of Practice]. The Petition alleges that the Almond Board improperly assessed Petitioner for "speech related" activities, in violation of Petitioner's rights under the First Amendment of the United States Constitution. The Petition seeks a declaration that the speech-related activities and assessments for those speech-related activities and the advertising and assessment regulations for "speech-related" activities in the Almond Order violate Petitioner's rights guaranteed under the First Amendment of the United States Constitution; a refund of all "speech-related" assessments paid by Petitioner for the 1995-96 and the 1996-97 crop years; a refund of the portion of Petitioner's paid 1994-95 assessments that were used by the Almond Board for the preparation, appearance, and testimony of the Almond Board's experts in In re Cal-Almond, 56 Agric. Dec. (Dec. 24, 1997); reasonable attorney's fees; and an injunction to preclude the Almond Board and the United States Department of Agriculture [hereinafter USDA] from imposing "speech-related" assessments on Petitioner (Pet. ¶ VI). On December 24, 1996, the Administrator of the Agricultural Marketing Service, USDA [hereinafter Respondent], filed Answer of Respondent: (1) stating that the Petition fails to state a claim upon which relief can be granted and the AAA and the Almond Order, as interpreted by Respondent and the Almond Board of California, were, and are, in accordance with law; and (2) requesting that the relief prayed for in the Petition be denied and the Petition be dismissed (Answer of Respondent at 3-4). On February 21, 1997, Chief Administrative Law Judge Victor W. Palmer [hereinafter Chief ALJ] held a telephone conference with counsel for Petitioner, Mr. Brian C. Leighton, Esq., of the Law Offices of Brian C. Leighton, Clovis, California, and counsel for Respondent, Mr. Gregory Cooper, Esq., Office of the General Counsel, USDA, Washington, D.C. The parties advised the Chief ALJ that "in light of the pending case before the Supreme Court [of the United States] on the subject matter of the [P]etition, all action should temporarily be stayed." (Summary of Teleconference, filed February 24, 1997.) On June 25, 1997, the Supreme Court of the United States entered its decision in Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), holding that compelled funding of generic advertising of California nectarines, plums, and peaches, in accordance with Marketing Order 916 (7 C.F.R. pt. 916) and Marketing Order 917 (7 C.F.R. pt. 917), both of which are issued under the AAA, neither abridges First Amendment rights nor implicates the First Amendment. Moreover, on June 27, 1997, the Supreme Court of the United States granted the petition for a writ of certiorari in Cal-Almond, Inc. v. Department of Agric., 14 F.3d 429 (9th Cir. 1993), 67 F.3d 874 (9th Cir. 1995), petition for cert. filed, 65 U.S.L.W. 3052 (U.S. May 20, 1996) (No. 95-1879), vacated the judgment of the United States Court of Appeals for the Ninth Circuit, and remanded the case to the United States Court of Appeals for the Ninth Circuit for further consideration in light of Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997). Department of Agric. v. Cal-Almond, Inc., 117 S. Ct. 2501 (1997).2 On July 2, 1997, the Chief ALJ held a telephone conference with counsel for Petitioner and counsel for Respondent during which Respondent contended that Glickman v. Wileman Bros. & Elliott, Inc., supra, is dispositive of this proceeding. The Chief ALJ scheduled times within which Respondent could file a motion to dismiss, Petitioner could respond to Respondent's motion to dismiss, and Respondent could rebut Petitioner's response to Respondent's motion to dismiss.3 On August 1, 1997, Respondent, relying on, inter alia, Wileman Bros., filed a motion to dismiss Petitioner's Petition (Respondent's Motion to Dismiss; 'At the time of the February 21, 1997, telephone conference, two cases were pending before the Supreme Court of the United States concerning First Amendment challenges to compelled assessments to pay for generic advertising under marketing orders promulgated pursuant to the AAA. Wileman Bros. & Elliott, Inc. v. Espy, 58 F.3d 1367 (9th Cir. 1995), cert. granted sub nom. Glickman v. Wileman Bros. & Elliott, Inc., 116 S. Ct. 1875 (1996), concerned a First Amendment challenge by growers, handlers, and processors of California tree fruits to assessments imposed pursuant to the AAA, Marketing Order 916 (7 C.F.R. pt. 916), and Marketing Order 917 (7 C.F.R. pt. 917) to finance generic advertising of California nectarines, plums, and peaches. Cal-Almond, Inc. v. Department of Agric., 14 F.3d 429 (9th Cir. 1993), 67 F.3d 874 (9th Cir. 1995), petition for cert. filed, 65 U.S.L.W. 3052 (U.S. May 20, 1996) (No. 951879), concerned a First Amendment challenge by almond handlers to assessments imposed pursuant to the AAA and the Almond Order (7 C.F.R. pt. 981) to finance generic advertising of almonds. 'On September 4, 1997, the United States Court of Appeals for the Ninth Circuit remanded CalAlmond "to the district court with instruction to dismiss Cal-Almond's First Amendment claim." 'Summary of Teleconference, filed July 3, 1997. 57 Agric. Dec. 24 Respondent's Opening Memorandum in Support of Motion to Dismiss). On September 3, 1997, Petitioner filed Petitioner's Response to Respondent's Motion to Dismiss, and on October 10, 1997, Respondent filed Respondent's Rebuttal Memorandum. On October 21, 1997, the Chief ALJ issued a Decision and Order of Dismissal [hereinafter Initial Decision and Order] in which the Chief ALJ concluded that Glickman v. Wileman Bros. & Elliott, Inc., 117 S. Ct. 2130 (1997), is dispositive of the issues in this proceeding and dismissed the Petition with prejudice. On November 4, 1997, Petitioner appealed to the Judicial Officer to whom the Secretary of Agriculture has delegated authority to act as final deciding officer in the Department's adjudicatory proceedings subject to 5 U.S.C. §§ 556 and 557 (7 C.F.R. § 2.35);* on January 7, 1998, Respondent filed Respondent's Response to Petitioner's Appeal to the Judicial Officer; and on January 12, 1998, the case was referred to the Judicial Officer for decision. Based upon a careful consideration of the record in this proceeding, I agree with the Chief ALJ's conclusion that Glickman v. Wileman Bros. & Elliott, Inc., supra, is dispositive of the First Amendment issue in this proceeding and that Petitioner's Petition should be dismissed with prejudice. Therefore, I have adopted the Chief ALJ's Initial Decision and Order as the final decision and order. Additions or changes to the Initial Decision and Order are shown by brackets, deletions are shown by dots, and minor editorial changes are not specified. Additional conclusions by the Judicial Officer follow the Chief ALJ's Initial Decision and Order. APPLICABLE CONSTITUTIONAL AND STATUTORY PROVISIONS United States Constitution: Amendment I Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. *The position of Judicial Officer was established pursuant to the Act of April 4, 1940 (7 U.S.C. §§ 450c-450g); section 4(a) of Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219, 3221 (1953), reprinted in 5 U.S.C. app. § 4(a) at 1491 (1994); and section 212(a)(1) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. § 6912(a)(1)). U.S. Const. amend. I. 7 U.S.C.: TITLE-7 AGRICULTURE CHAPTER 26-AGRICULTURAL ADJUSTMENT SUBCHAPTER III-COMMODITY BENEFITS § 608c. Orders regulating handling of commodity (6) Other commodities; terms and conditions of orders In the case of the agricultural commodities and the products thereof, other than milk and its products, specified in subsection (2) of this section orders issued pursuant to this section shall contain one or more of the following terms and conditions, and (except as provided in subsection (7) of this section), no others: (1) Establishing or providing for the establishment of production research, marketing research and development projects designed to assist, improve, or promote the marketing, distribution, and consumption or efficient production of any such commodity or product, the expense of such projects to be paid from funds collected pursuant to the marketing order: Provided, That with respect to orders applicable to almonds . . . such projects may provide for any form of marketing promotion including paid advertising and with respect to almonds . . . may provide for crediting the pro rata expense assessment obligations of a handler with all or any portion of his direct expenditures for such marketing promotion including paid |