Court sides with Pistachio Commission, reverses injunction
SAN FRANCISCO June 8, 2007 11:01am
• Says Paramount Farms unconvincing in its arguments
• Paramount’s ire centers around commission’s marketing The California Pistachio Commission got a new lease on life Friday when the 9th U.S. Circuit Court of Appeals reversed a temporary injunction stopping it from collecting fees from growers.
A group of pistachio growers, led by the largest pistachio company in the nation, Paramount Land Company and its related units, challenged the marketing and promotional activities of the Pistachio Commission. Paramount argued that the annual subsidies mandated by the California Pistachio Act of 1980 constitute compelled speech in violation of the First Amendment.
“Although Paramount has raised the specter of irreparable injury by bringing a colorable First Amendment claim, its showing with respect to the merits is insufficient to sustain an injunction. We reverse the judgment of the district court and vacate the injunction,” the appeals court says in its ruling.
The Pistachio Commission has been under a lower court preliminary injunction forbidding it from collecting and using the challenged assessments until the litigation is resolved.
Paramount and its various affiliated entities together pay between 25 percent and 30 percent of the Pistachio Commission’s total assessments.
But the farming giant says the commission’s marketing has not specifically benefited its brand of nuts.
“The expressive activity that has attracted Paramount’s ire centers around generic print and public relations advertising campaigns for California pistachios,” the court notes. “Paramount maintains that these campaigns are ‘ineffective in augmenting pistachio sales,’ ‘do not adequately feature the nuts themselves,’ and are ‘antithetical to Paramount’s interests,’ which are to ‘increase sales by differentiating its products from competitor’s products,’” the court says.
Paramount also finds fault with the Pistachio Commission’s government relations activities, which are coordinated by a political consultant who hires lawyers to represent the industry before the International Trade Commission and the Commerce Department, and to lobby government entities on behalf of the pistachio industry. Paramount complains that the commission has “not done enough to protect the domestic pistachio industry from foreign pistachios,” the judges note in their review of the arguments.
In reversing the district court’s action, the appeals court says it applied its long-standing requirements that a preliminary injunction is warranted where plaintiffs demonstrate either a likelihood of success on the merits and the possibility of irreparable injury; or serious questions going to the merits and a balance of hardships strongly favoring the plaintiffs – things Paramount did not do, the court says.
Growers in the Central Valley produce virtually all of the domestically-grown pistachios in the nation.