Highlights of 2004-05 Supreme Court Term

The following Summary of Highlights of the 2004-05 Supreme Court Term.

prepared by

THE LEGAL INFORMATION INSTITUTE — CORNELL LAW SCHOOL which is solely responsible for its content. Next week, Muni-mail.com will provide analysis of several additional cases that are not included here but have some impact on municipal court and criminal practice

Highlights of the 2004-05 Supreme Court Term

National Cable & Telecommunications Assn. v. Brand X Internet Services (June 27, 2005)Under Title II of the Communications Act of 1934 (amended 1996, 47 U.S.C. §151), all providers of “telecommunications service” are subject to compulsory “common-carrier” regulation by the Federal Communication Commission, while providers of “information service” go unencumbered. The Court ruled the FCC’s conclusion that cable internet service providers are considered “information service” providers rather than “telecommunications service” providers a lawful construction of review, reasonably within its jurisdiction. Citing the circuit court’s error in applying the stare decisis effect of AT&T Corp. v. Portland, which previously ruled cable broadband as a “telecommunication service,” the Supreme Court applied the deferential standard of review found in Chevron U.S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)

The Court pointed to the agency’s superior knowledge of the “technical, complex, and dynamic” subject matter over which it presides, and it therefore found that it is necessary to defer to the agency’s construction of review as long as the agency works within its statutory jurisdiction, follows the unambiguous terms of statutes under its purview, and exercises a “reasonable” framework of review practices. The FCC reasoned that from the end-user’s perspective, cable broadband is utilized for “internet access” and not for its “ability to transmit information;” an interpretation that reasonably followed the ambiguous operative language of the Communications Act. Further, despite respondent’s claim that the FCC’s inconsistency regarding regulation of Direct Subscriber Lines owned by telephone companies and cable broadband was arbitrary and capricious, the Court ruled the Commission’s reasoning for the distinction valid under the Chevron framework. The Court of Appeals judgments leading to both cases of this consolidated decision (04-277 and 04-281) were reversed and remanded. Further reference

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Bankruptcy

Rousey v. Jacoway (April 4, 2005)Upon filing a joint petition for relief under Chapter 7 of the Bankruptcy Code, Rousey and his wife demanded protection from creditors seeking to liquidate assets held by the Rouseys’ Individual Retirement Accounts (IRAs) under 11 U.S.C. § 522(d)(10)(E). Title 11 of the U.S. Code allows persons filing for bankruptcy to withdrawal their “right to receive…a payment under a stock bonus, pension, profit-sharing, annuity, or similar plan or contract on account of…age” § 522(d)(10)(E) from the assets claimed within the bankruptcy estate. Looking to ordinary meaning, the Court agreed that the IRA was considered a “similar plan or contract” as it shared in common with the other specified financial instruments the purpose of providing income in substitution for wages earned through employment. Considering whether IRAs satisfied the age element, the Court expressed that due to the fact that a full, unfettered withdrawal of the funds can only take place after the IRA holder reaches age 59, said instrument does in fact carry a right to payment “on account of…age” 11 U.S.C. § 522(d)(10)(E). Accordingly, the Court ruled that the IRA-shielded assets successfully fulfilled both enumerated elements of 11 U.S.C. § 522(d)(10)(E), and could therefore be exempt from creditors and withdrawn from the bankruptcy estate. Reversing decisions from three lower courts, this case will serve as precedent in resolving conflicting practices in the various courts of appeal. Further reference

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Civil Procedure

Jurisdiction – Exxon Mobil Corp. v. Saudi Basic Industries Corp. (March 30, 2005) Conflicting practices among the Appeals Circuit led the Court to resolve the issue of to what extent the Rooker-Feldman doctrine affects federal jurisdiction. The Rooker-Feldman doctrine precludes federal district jurisdiction over suits that are properly appeals of state court decisions. The Court held that the doctrine is too narrow to dismiss any action over which federal courts have original (rather than appellate) jurisdiction simply because they are being or have been disposed of in state courts.

In the present case, a dispute over charges between two Exxon subsidiaries and Saudi Basic Industries Corporation (SABIC), led SABIC to sue Exxon in a Delaware state court. Two weeks later, Exxon brought the same action against SABIC in Federal District Court. SABIC moved for dismissal on other grounds, and when this motion was denied, appealed to the Third Circuit. Meanwhile, Exxon prevailed in the Maryland suit, procuring nearly $400 million in damages. The Third circuit, without addressing SABIC’s motion, dismissed the federal action because of want of jurisdiction under the Rooker-Feldman doctrine; because the same issue had been decided in Delaware state court, the Third Circuit reasoned, the federal court jurisdiction “vanished”. In reversing, the Supreme Court clarified the “narrow ground” occupied by Rooker-Feldman, namely cases in which state court losers seek to void an adverse decision in federal court, and found that the Exxon federal suit fell beyond its application. Further reference

Alleged espionage relationships – Tenet v. Doe (March 2, 2005)In a unanimous decision, the Supreme Court barred all lawsuits brought against the U.S. government alleging any mode of espionage relationship. Respondent and his wife brought suit against the United States and the Director of the Central Intelligence Agency to procure funds owed them in exchange for Cold War espionage services. Claiming violations of procedural and substantive due process rights as well as estoppel, respondents prevailed in the lower courts.

Reversing these decisions, the Supreme Court invoked a broad reading of the Totten rule (Totten v. United States 92 U.S. 105 [1875]) requiring that cases based on espionage be “dismissed on the pleadings without ever reaching the question of evidence” United States v. Reynolds, 345 U.S. 1 (1953). The Court clarified with this holding that the Totten rule is much more than a contract rule, but rather a full fledged protection of sensitive state information and relationships. Allowing a looser interpretation of Totten would invite a flood of lawsuits, threatening “graymail” (individual suits forcing settlement under threat of litigation or publication of sensitive information) and impairment of intelligence gathering by compromising covert sources. Further reference

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Criminal Procedure

White-collar crime – Arthur Andersen, LLP v. United States (May 31, 2005)In a case with broad significance for corporate accounting procedures, the Supreme Court found that jury instructions leading to a 2002 conviction of Arthur Andersen, LLP were defective, reversing a Fifth Circuit decision. Andersen, employed by Enron and once among the world’s largest accounting and consulting firms, fell in the wake of the Enron scandal. When questions arose concerning accounting practices, Andersen began enforcing its “document retention” policy and destroyed a number of files relevant to the pending SEC Enron investigation. When evidence of this came to light, Andersen was indicted in a Texas Federal District Court for witness tampering. He was convicted in a jury trial, sentenced to five years probation and fined $500,000. Andersen appealed, alleging defective jury instructions. The Fifth Circuit of Appeals affirmed the conviction. Further reference

The question before the Court was whether the proper interpretation of statute 18 U.S.C. § 1512(b)(2)(A) and (B) rendered the jury instructions defective. Andersen alleges that the statute includes a mens rea (guilty mind) component, and that the statute necessitates a connection, or nexus, between the destruction of evidence and the (“official”) proceeding in which such evidence is pertinent. Andersen argued that had the District Court specified these components in its jury instructions, it would not have been convicted, since neither element was fulfilled. A unanimous Court agreed, holding that the instructions were sufficiently defective to require a new trial, and clarifying for lower courts the correct interpretation of § 1512. Further reference

Representation for indigent clients – Kowalski v. Tesmer (December 13, 2004)This case was brought to Federal Court by three indigent convicts and two defense attorneys challenging the constitutionality of a Michigan statute that denies appointed council for indigents pleading guilty or no contest. Both the District and Appeals courts (Sixth Circuit) found that while the indigents themselves were barred from bringing a federal action (by Younger abstention), the attorneys had third party standing (or jus tertii) to bring the suit. Lower courts differed on whether or not the Michigan statute violates the due process and equal protection clauses of the Fourteenth Amendment.

The Court was faced 1) with the issue of whether the attorneys have third-party standing to litigate the rights of their potential clients, and if so, 2) whether the statute is constitutional. Despite the unanimity of the lower court decisions with respect to the first issue, the Supreme Court found that the attorneys do not have standing, and thus the Court never reached the constitutional issue. In determining that the attorneys do not have standing, the Court questioned whether there was “closeness” between the attorneys and the indigent clients, and whether or not the clients were significantly “hindered” in their ability to pursue their own claims (both conditions on the conferral of jus tertii). A 6-3 majority found that the “closeness” requirement was undermined by the hypothetical nature of the “close” relationship, as opposed to an actual “close” relationship, and pointed to cases of other indigents proceeding on appeals pro se (representing themselves) to undermine the hindrance condition. Further reference

Race and peremptory challenges in jury selection – Johnson v. California (June 13, 2005) Johnson, an African-American male, was convicted by an all-white jury of murdering the daughter of his white girlfriend. During jury selection the prosecution used 3 of its 12 peremptory challenges to remove the only three African-Americans remaining in the jury pool. The defense objected to both the second and third prosecution challenges on the grounds that they appeared race-based. The trial judge denied both motions, and the California Supreme Court eventually affirmed the trial judge’s decision.

In Batson v. Kentucky, the Court set out a procedure for objections to peremptory challenges: 1) the objector must make a prima facie case that group bias motivated the challenge; 2) the prosecutor must then give race-neutral reasons for its challenge; and 3) the trial judge must decide whether group bias is the more likely explanation. The specific issue of this case is what constitutes “a prima facie case” that bias exists. Choosing between the “more likely than not” standard for initial objections (followed by the California Supreme Court), and the “reasonable inference exists” standard (employed by the Ninth Circuit of Appeals), the Court sided with the latter. An 8-1 majority found that California’s stricter standard effectively conflates the first and third steps, unreasonably requiring an objector to establish a preponderance of evidence before the prosecution’s alleged motivation is even known. Justice Thomas, the Court’s sole African-American member, was also its sole dissenter. Further reference

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Commerce clause

Medical marijuana – Gonzales v. Raich (June 6, 2005)The Supreme Court held that Congress’s Commerce Clause authority warranted regulation and prohibition of local cultivation and personal use of marijuana, even when in compliance with state law. Without disputing the constitutionality of the Controlled Substance Act (CSA: part of the Comprehensive Drug Abuse Prevention and Control Act), respondents argued that the CSA’s “categorical prohibition of the manufacture and possession of marijuana as applied to the intrastate manufacture and possession of marijuana for medical purposes pursuant to California law” was outside of Congress’s authority as defined by the Commerce Clause. Respondent’s qualm with just this piece of the CSA was deemed irrelevant, as it is outside the scope of the Court to excise individual components from larger policy schemes.

In addressing the constitutionality of the entire scheme, the Court upheld case law firmly supporting the right of Congress to regulate local activities that were part of an economic “class” of “activities that substantially affect interstate commerce” NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 37 (1937). Essentially, when Congress determines that a “total incidence” of a particular practice threatens the government’s ability to regulate the entire interstate market, it has the right to regulate that entire class of activity. Strongest of the Court’s precedential grounds was Wickard, which established that “Congress can regulate intrastate activity that is not itself ‘commercial’…if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.” A further concern was the leakage of sanctioned cannabis into the illicit interstate marijuana market.

In summation, the Court declared the powers of Congress under the Commerce Clause comprehensive enough to allow regulation of intrastate, local activities when needed to regulate broader interstate markets with efficacy. Proper avenues for legalization of marijuana lie with congress and the drug’s demotion from Schedule-One status. Further reference

Granholm, Governor of Mich. v. Heald (May 16, 2005)Consolidating three cases, Michigan beer & Wine Wholesalers v. Heald, Swedenburg v. Kelly, and Granholm v. Heald, the Court addressed Michigan and New York state policies granting licenses for direct product shipment to residents for in-state wineries while disallowing or discouraging reciprocal privileges to out-of-state wineries. In a 5-4 vote, the Supreme Court reaffirmed that state-sponsored regulatory schemes that promote “differential treatment of in-state and out-of-state economic interest that [benefit] the former and [burden] the latter,” (Oregon Waste Systems, Inc. v. Dept. of Envtl. Quality of Ore., 511 U.S. 93 [1994]), are in violation of the Commerce Clause and constitute exercises of state discretion outside of the scope of the Twenty-First Amendment.

The Court cited the concern of Constitutional Framers for eliminating the economic balkanization that had beleaguered the colonies and the states under the Articles of Confederation as central to the purpose of the Commerce Clause. It argued that allowing policies such as those in New York and Michigan to stand would have set precedent consenting to a reversion into state negotiations over mutual economic interests, a “multiplication of preferential trade areas,” and eventual interstate, intranational trade war. Each state’s Twenty-First Amendment right to regulate the transportation, importation, and use of liquor within its borders does not warrant inequitable treatment of domestic and out-of state products in violation of the non-discrimination principle of the Commerce Clause.

Further, the Court ruled that Michigan and New York trade policies did not “advance a legitimate local purpose that [could not] be adequately served by reasonable nondiscriminatory alternatives” New Energy Co. of Ind. V. Limbach 486 U.S. 269 (1988), 278, as illustrated by the states’ weak evidentiary support of problems, including internet purchasing of alcohol by minors and tax evasion. Further reference

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Discrimination

Smith v. City of Jackson (March 30, 2005)The Age Discrimination in Employment Act (ADEA) was passed in 1967 in language similar to Title VII of the Civil Rights Act of 1964. The Court has long recognized two kinds of discrimination prohibited under Title VII: “disparate-treatment”, employer actions that discriminate against a protected class of employees because of their membership in that class; and “disparate-impact”, employment practices that are superficially neutral with respect to the protected classifications, but which in fact have negative consequences for the protected class of employees. The question before the Court was whether the ADEA, like Title VII, prohibits both types of discrimination. Specifically, the Court had to decide whether and to what extent disparate-impact can be claimed under the ADEA.

This case was brought by a group of Jackson police officers, who claimed that a new pay scheme is discriminatory with respect to age. The officers alleged both disparate-treatment and disparate-impact under the ADEA. The District Court dismissed both claims, and the 5th Circuit found that while the District Court should have allowed more proceedings on the disparate-treatment claim, “disparate-impact claims are categorically unavailable under the ADEA.” Because the various Courts of Appeal treat this question differently, the Court granted certiorari and found that while disparate-impact claims are in fact cognizable under the ADEA, such claims are more circumscribed than those brought under Title VII (for race/religion/sex-based discrimination), and that the officers’ case failed to state a sufficiently specific disparate-impact claim. Further reference

Americans with Disabilities Act – Spector v. Norwegian Cruise Line Ltd. (June 6, 2005)This class action suit against Norwegian Cruise Line LTD was brought under Title III of the Americans with Disabilities Act of 1990 (ADA) by a number of disabled passengers. Title III “prohibits discrimination based on disability” on public transportation services and requires modifications to ensure access to disabled persons. Norwegian sails to and from United States ports and serves predominantly American citizens, though it flies a so-called “flag of convenience” of the Bahamas, where it is registered. The petitioners allege that they were subject to discriminatory pricing and unable to fully enjoy the ships amenities due to structural barriers. Reversing a lower decision, a divided Court held that Title III does in fact cover foreign-flag vessels, but that such coverage is subject to certain limitations.

The first limitation is statutory: Title III requires only modifications and accommodations that are “readily achievable”. If such modifications cause undue expense, or bring the ship into non-compliance with other laws, foreign or domestic, they are not “readily achievable” by the Court’s definition. The second limitation is derived from a precedent that regardless of whether or not a statute’s requirements are readily achievable, if they interfere with the “internal order” of a vessel, they cannot be enforced (to derive this rule the Court contrasted Benz and McCulloch with Longshoremen v. Ariadne Shipping Co., 397 U.S. 195). While Title III holds generally, any provision that affects internal order cannot be enforced.

Thus the application of a general U.S. statute on foreign-flag vessels can be precluded either when compliance is not “readily achievable” or when compliance interferes with a ship’s “internal order”. In her concurring opinion Justice Ginsburg questioned the scope and motivation for the internal order exception, and in his dissent Justice Scalia disputed any application of Title III to foreign-flag vessels. Further reference

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American Indian Law

City of Sherrill v. Oneida Indian Nation (March 29, 2005)The Oneida Indian Nation (OIN), nearly 200 years after their major removal from central NY, brought this suit against the City of Sherrill, NY to reassert their present and future sovereignty over historic reservation lands. The dispute arose when the OIN purchased two parcels of land on the open market within Sherrill city limits, and subsequently refused to pay property taxes assessed by Sherrill. The Oneida, relying on federal treaties and the Nonintercourse Act, claim that the land falls within their historic reservation, qualifies as “Indian country” under 18 U.S.C. § 1151 and is therefore tax-exempt.

Reversing the judgment of the Second Circuit, the Supreme Court found that since the Oneida long ago relinquished control and sovereignty over the lands, they cannot now reclaim aboriginal possessory rights. Although the Court may award monetary damages to dispossessed natives (see Oneida II), reinstituting sovereignty piecemeal over open market purchases, especially given the Oneida’s long delay in asserting that right, would be inequitable and impracticable. The consequences for the 99% non-Indian population of Sherrill, as well as for the administrative and regulatory work of state and local governments, aggravated by the Oneida’s long absence, made a judgment in the Oneida’s favor impossible. Further reference

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Intellectual Property

File-sharing software – MGM v. Grokster (June 27, 2005)In a highly anticipated decision, a unanimous Court sided with petitioners, a group of entertainment industry giants (hereafter MGM) against Grokster and Streamcast, two companies that distribute peer-to-peer file-sharing software. Both Grokster and Streamcast distribute free software that MGM claims is used almost exclusively for illegal downloads of music and video. Because of the decentralized, or peer-to-peer, architecture of the services, it is difficult for copyright holders to litigate directly against end users. Thus, the issue before the Court was whether the software companies could be found secondarily liable for the copyright infringement of their users under the Copyright Act.

Grokster was granted summary judgment in District Court, and the Ninth Circuit of Appeals affirmed that decision, finding that the precedent of Sony v. Universal Studios (addressing the question of whether VCR manufacturers could be held liable for infringement) ruled out liability for a distributor whose product has “substantial non-infringing uses.” The Supreme Court, however, ruled that although Sony does bar some claims of secondary liability, it does not preclude all, and that the preliminary findings establish that both companies actively and intentionally promoted the illegal use of their software. Leaving the Sony rule in place, while subjecting to liability inducement of illegal uses, the Court sought with this decision to balance the competing interests of protecting artistic creation and leaving room for innovative technologies that have both legal and non-legal uses. Further reference

Merck KGaA v. Integra LifeSciences I, Ltd. (June 13, 2005)Under the Federal Food, Drug, and Cosmetic Act (FDCA), which regulates the “manufacture, use, or sale of drugs,” pharmaceutical manufacturers are required to submit research on fledgling products to the Food and Drug Administration (and other federal agencies) in two phases. Phase one entails the investigational new drug application (IND) while phase two includes the new drug application (NDA), charging collection of data from preclinical testing to the former and safety and effectiveness data to the latter.

The Drug Price Competition and Patent Term Restoration Act (DPCPTRA) of 1984, §202, 98 Stat. 1585, 35 U.S.C. §271(e)(1) states: “It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention…solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs….” During preclinical research, petitioner Merck used respondent Integra’s patented “RGD peptides” in experiments, integrating the peptides with petitioner’s work in “angiogenesis” technology. Respondent’s charged petitioners with patent infringement, as the testing done involving the “RGD peptides” was not, in the end, submitted to the FDA for any reason.

The Court ruled that the use of patented inventions in preclinical research, in which the results are never submitted to the FDA, are exempted from infringement under 35 U.S.C. §271(e)(1). In its ruling, the Court found that the statutory infringement exemption of DPCPTRA provides a “wide berth for the use of patented drugs” in any process or activity associated with the federal regulatory scheme, embracing a “global” gamut of experimental activity. Accordingly, the statute exempts from infringement any and all experimental uses of patented inventions “reasonably related” to processes and activities aimed at eventual submission to the federal regulatory process. Further reference

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First Amendment

Ten Commandments display for religious purpose – McCreary County v. ACLU (June 27, 2005)In this case, the Supreme Court found that Ten Commandment displays in a Kentucky Courthouse contravene the First Amendment’s Establishment Clause. Following the precedent of Lemon v. Kurtzman (403 U.S. 602 [1971]), the Court found that the displays lacked a primary secular purpose since the Commandments convey a distinct Judeo-Christian message. (Lemon requires the secular purpose to be of the most genuine nature and not one that stands secondary to the “ostensible and predominant purpose of advancing religion.”)

The attempted revision supported by the counties was also ruled unconstitutional even though the counties included a secular codicil to the Commandments, noting the profound effect that the Commandments have had on the development of “Western legal action and thought.” The Court still included this attempted revision within the initial injunction, stating that the underlying factor is the unconstitutional endorsement of a message suffused with a religious motif.

Writing for the majority, Justice Souter pointed to the precedent of Wallace v. Jaffree (472 U.S. 38, 75 [1985]), which requires that government neutrality always remain intact when a religious message appears on public property. Pointing to Stone v. Graham, in which even though the appearance of the Ten Commandments within a public school classroom was ruled unconstitutional, Souter noted that the Court does not hold “that a sacred text can never be integrated constitutionally into a government display on law or history”; rather, such a display must be part of a greater secular display that does not imply government support or endorsement of a specific religion. Further reference

Ten Commandments monument on state Capitol grounds – Van Orden v. Perry (June 27, 2005)In a related decision to McCreary, the Court found that a 6 foot edifice depicting the Ten Commandments, placed on the grounds of the Texas State Capitol, does not violate the Establishment Clause of the First Amendment. Justice Rehnquist, joined by Justices Scalia, Kennedy, and Thomas, focused on the challenge of balancing freedom and tradition:

> Our cases, Janus-like, point in two directions in applying the Establishment Clause. One face looks toward the strong role played by religion and religious traditions throughout our Nation’s history…. The other face looks toward the principle that governmental intervention in religious matters can itself endanger religious freedom. This case, like all Establishment Clause challenges, presents us with the difficulty of respecting both faces. Our institutions presuppose a Supreme Being, yet these institutions must not press religious observances upon their citizens. One face looks to the past in acknowledgment of our Nation’s heritage, while the other looks to the present in demanding a separation between church and state. Reconciling these two faces requires that we neither abdicate our responsibility to maintain a division between church and state nor evince a hostility to religion by disabling the government from in some ways recognizing our religious heritage….

Pointing to the monument’s nature and its relation to history, Rehnquist contrasted the “passive” display and location of the statue with the school-classroom display disallowed in Stone v. Graham, (449 U.S. 39 [1980]). Justice Breyer, affirming the judgment, found a deciding factor to be the statue’s forty-year tenure on the Capitol grounds. Further reference Religious accommodation in prison – Cutter v. Wilkinson (May 31, 2005)

The Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), §3 states “no government shall impose a substantial burden on the religious exercise of a person residing in or confined to an institution,” unless there is “a compelling governmental interest” justifying a burden imposed “in the least restrictive means” 42 U.S.C. § 2000cc. Petitioners, past and present inmates of Ohio’s correctional system, claimed that Ohio prison officials failed to accommodate their “nonmainstream” religious practices (Satanist, Asatru, Wicca, etc.) in violation of RLUIPA §3, while respondents facially challenged the RLUIPA, charging that the Act “improperly advance[d] religion in violation of the First Amendment’s Establishment Clause.” In providing greater protection for religious rights than other Constitutional rights within confining institutions, respondents claimed that RLUIPA §3 manifested implicit encouragement for prisoners to become religious so as to capitalize on these “superior rights.” Further reference The Court found for petitioners, asserting “‘there is room to play in the joints’ between the Free Exercise Clause and the Establishment Clause” such that RLUIPA §3 fits firmly within the interstice. It is the very intent of the RLUIPA to proffer protection for persons confined by institutions, those who cannot see to their religious needs without government accommodation and assistance. Further, the Court ruled that RLUIPA §3 cannot discriminate amongst bona fide religions (mainstream or not), and does not engender safety concerns in its execution culpable of “compelling government interest” to justify any imposed burden. The circuit court’s decision was reversed and petitioner’s case remanded for review. Further reference Compulsory sponsorship of government speech – Johanns v. Livestock Mktg. Ass’n (May 23, 2005) Since the 1985 passing of the Beef Promotion and Research Act, the Federal government has collected a mandatory one dollar per head “checkoff” from producers of cattle and imported beef. From 1988 to present, the 1 billion dollars grossed from the assessment has gone to fund beef-related projects and to finance marketing. The issue raised by the respondents is that the “checkoff” circumvents the First Amendment by forcing the private sector to label their beef as a generic commodity; thus, hindering the producer’s ability to market the superiority of their own product.

The District Court ruled that even though the Act is headed by a state government committee it is nonetheless unconstitutional. Specifically, the Court denied the right of “compelled subsidy” in this case stating that an act which forces citizens to subsidize speech for a cause which they object to is unconstitutional. The Eighth Circuit Court of Appeals sustained the District Court ruling.

The Supreme Court found that respondents’ case argument, that the program fails to qualify as government speech because its funding targets beef promotional activity and that this promotional activity “speaks for” the beef producers, has no legal bearing, since the program is politically authorized and controlled.

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