Citrus Tax Ruled Unconstitutional
Supreme Court, five federal courts of appeal and more than seven federal trial
courts, the Second District Court of Appeal today affirmed the ruling of a
court striking down a tax producing more than $30 million imposed on citrus
growers to fund the Florida Department of Citrus generic advertising program.
The tax represents two thirds of the Department's annual budget.
Eight major citrus growers filed the suit about two years ago, claiming
tax, imposed on each box of citrus produced, is used to fund multimillion
generic advertising campaigns they disapprove of and say "does more to help
sell Brazilian oranges than Florida orange juice."
A circuit court in Polk County earlier ruled that that tax was unconstitutional
because it forced growers to pay for generic advertising (speech) over which
they have no control. Since that time, the Department of Citrus settled a suit
by the Brazilians on the same issue by making the tax voluntary on foreign
producers. It remains mandatory on Florida growers, however.
The Second District Court of Appeal upheld the Circuit Court decision saying in
effect that the tax of up to 20 cents per box violated the growers' First
Amendment rights and amounted to unconstitutional compelled speech. Following
numerous federal courts who held beef, pork, mushroom and other generic
tax-funded ad programs unconstitutional, the court rejected the DepartmentÂs
argument that the box tax is part of a more comprehensive program governing
citrus production and marketing.
The Department of Citrus has stated under oath that its generic advertising
benefits imported juice from Brazil as well as domestic juice produced in
California and the Southwestern United States. But those growers are not
subject to the tax.
"All of the theories the Department of Citrus has asserted to save this
unconstitutional tax have failed," said McMahon, "The Department has spent
effort to litigate this case in the media and continues to spend the growers'
tax money unconstitutionally."
If the ruling stands, the eight growers will seek $16 to $17 million in refunds
from the Department. That amount is growing at the rate of about $3 million a
year. The growers said they additionally would seek a permanent injunction
against further collection of the tax. Other growers not a part of this
litigation could file similar suits and collect refunds.
This victory by the growers could be a severe blow to the Department of Citrus
if it were forced to end the box tax and get out of the advertising business.
Two-thirds of the agency's $65 million budget comes from the box tax and 80
percent of their budget is dedicated to advertising.
McMahon said, "The growers want to continue to fund some of the non-advertising
activities of the Department of Citrus and were pleased that the research
activities of the Department were not included in the current court opinion.
They believe an opportunity exists for the Florida Legislature to
Department of Citrus."
The growers who have filed suit include Graves Brothers Co., Evans Properties
Inc., Southern Gardens Groves Corp., The Latt Maxcy Corp., Fellsmere Joint
Venture, Oak Hammock Groves, Ltd., Silver Strand III Partnership and Barron