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Cal-Almond Inc. v. Department of Agriculture

filed: October 10, 1995.


Appeals from the United States District Court for the Eastern District of California. D.C. Nos. CV-91-0064-REC CV-91-0122-REC CV-91-0123-REC CV-91-0685-REC CV-92-5684-REC CV-86-0087-REC. Robert E. Coyle, District Judge, Presiding.

Before: Herbert Y.c. Choy, Mary M. Schroeder, and Melvin Brunetti, Circuit Judges. Opinion by Judge Brunetti.

Author: Brunetti

BRUNETTI, Circuit Judge:

In a previous appeal for these cases, we held that certain provisions of the California Almond Marketing Order (Order), 7 C.F.R. § 981, violated the free speech and free association rights of several almond handlers. Cal-Almond, Inc. v. Department of Agriculture, 14 F.3d 429 (9th Cir. 1993) (Cal-Almond I). We remanded the case to the district court to conduct the fact-intensive inquiry necessary to determine the appropriate remedy. On remand, the district court ordered the United States Department of Agriculture (USDA) to refund the full amount the almond handlers had paid to the Board since 1980, to release all of the advertising assessments that had been placed in escrow accounts, and to reimburse the almond handlers all of the money they spent on creditable advertising. The USDA appeals the propriety of the district court's award. We have jurisdiction, see 28 U.S.C. § 1291, and we affirm in part and reverse in part.


In our previous opinion, we held that certain provisions of the Order, which was issued by the Secretary of Agriculture pursuant to the Agricultural Marketing Agreement Act of 1937, 7 U.S.C. § 601-674 (AMAA), to regulate the California almond-handling industry, violated the almond handlers' free speech and free association rights. Id. at 440. Specifically, we examined the Order's provisions that required almond handlers to contribute to a generic pro-almond public relations, advertising, and promotion program (Program). The Program, administered by the California Almond Board (Board), was funded by assessments collected from almond handlers on the basis of the volume of almonds handled. 7 C.F.R. §§ 981.41(a), 981.81(a). The assessments could be reduced, at least in part, by the amount a handler spent on creditable advertising and other promotional activities as provided in 7 C.F.R. § 981.441(d)(1)(i)-(iii). In order to be approved by the Board, the promotional activity had to have as its "clear and evident purpose" the promotion of "the sale, consumption, or use of California almonds." 7 C.F.R. § 981.441(e)(2).

In Cal-Almond I, we held that the Board's assessments implicated the almond handlers' First Amendment rights because the handlers, who constitute a "publicly identified group," were forced to fund the "'dissemination of a particular message associated with that group.'" Cal-Almond I, 14 F.3d at 435 (quoting United States v. Frame, 885 F.2d 1119, 1132 (3rd Cir. 1989), cert. denied, 493 U.S. 1094, 107 L. Ed. 2d 1070, 110 S. Ct. 1168 (1990)). We found that the assessments implicated the handlers' rights to free speech and free association, regardless of whether the assessments were paid directly to the Board or satisfied by expenditures on creditable advertising and promotional activities. Id. Applying the three prong test from Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N.Y., 447 U.S. 557, 65 L. Ed. 2d 341, 100 S. Ct. 2343 (1980), we concluded that the Almond Marketing Program violated the handlers' First Amendment rights. Cal-Almond I, 14 F.3d at 440. Consequently, we remanded to the district court the fact-intensive determination of the appropriate remedy. Id. at 449.

On remand, the parties stipulated regarding the various amounts that each handler paid to the Board for creditable advertising, that had been placed in escrow for payment of creditable advertising assessments, that had been paid to third parties (i.e., newspapers, magazines, etc.) for creditable advertising, and the portion of each handler's annual assessments that was applied toward the Board's generic promotional activities. The district court ordered the USDA to refund approximately $135,000, which represents the full amount handlers paid to the Board since 1980, to release approximately $1.7 million of advertising assessments that had been placed in escrow accounts, and to reimburse the $2.5 million that they had paid third parties for creditable advertising. The USDA timely appeals this order.


We first address whether the doctrine of sovereign immunity bars the reimbursement of money the handlers spent on creditable advertising ordered by the district court.*fn1 We review questions involving principles of sovereign immunity de novo. United States v. Woodley, 9 F.3d 774, 781 (9th Cir. 1993).

It is well established that "in a suit against the United States, there cannot be a right to money damages without a waiver of sovereign immunity . . . ." United States v. Testan, 424 U.S. 392, 400, 47 L. Ed. 2d 114, 96 S. Ct. 948 (1976). It is also clear that waivers of sovereign immunity must be "unequivocally expressed." United States v. Nordic Village, Inc., 503 U.S. 30, 33-34, 117 L. Ed. 2d 181, 112 S. Ct. 1011 (1992). Claims for specific relief, however, are not subject to sovereign immunity. Navel Orange Admin. Comm. v. Exeter Orange Co., 722 F.2d 449, 452 (9th Cir. 1983). The question we must decide, therefore, is whether reimbursement of the money that the handlers paid for creditable advertising is best characterized as damages, and thus barred by the doctrine of sovereign immunity, or as specific relief.

The distinction between money damages and specific monetary relief is that "damages are given to the plaintiff to substitute for a suffered loss . . . . specific remedies 'are not substitute remedies at all, but attempt to give the plaintiff the very thing to which he is entitled.'" Maryland Dep't of Human Resources v. Department of HHS, 246 U.S. App. D.C. 180, 763 F.2d 1441, 1446 (D.C. Cir. 1985) (quoting D. Dobbs, Handbook on the Law of Remedies 135 (1973)); see also Bowen v. Massachusetts, 487 U.S. 879, 914, 101 L. Ed. 2d 749, 108 S. Ct. 2722 (Scalia, J., Dissenting) ("Whereas damages compensate a plaintiff for a loss, specific relief prevents or undoes the loss - for example, by ordering return to the plaintiff of the precise property that has been wrongfully taken . . . .").

Requiring the USDA to reimburse the handlers for money they expended on creditable advertising would oblige the USDA to "substitute" money from its coffers for money the handlers had paid to third parties. Unlike the assessments paid directly to the Board, in the situation of the money paid for creditable advertising, the USDA cannot return the "precise property wrongfully taken" because that money was not paid to the USDA. Reimbursement for the money handlers spent on creditable advertising would therefore constitute damages. Since nothing in the Act demonstrates congressional intent to waive sovereign immunity for the claims raised by the handlers, see Wileman, 58 F.3d at 1385, the handlers' claims for reimbursement for money spent on creditable advertising are barred by sovereign immunity.

The handlers cite several cases in which monetary remediation was not barred by sovereign immunity, arguing that those cases compel the Conclusion that reimbursement in this case would not constitute damages. See, e.g., Bowen v. Massachusetts, 487 U.S. 879, 910, 101 L. Ed. 2d 749, 108 S. Ct. 2722 (1988); Katz v. Cisneros, 16 F.3d 1204, 1208 (Fed. Cir. 1994); Alaska Airlines, Inc. v. Johnson, 8 F.3d 791, 797 (Fed. Cir. 1993); Zellous v. Broadhead Assoc., 906 F.2d 94 (3d Cir. 1990). In those cases, however, the monetary awards were made to plaintiffs because they were statutorily entitled to amounts that had been wrongfully withheld, not to reimburse them for money spent. For example, in Zellous - the case primarily relied upon by the handlers and the district court - plaintiffs were tenants of a housing project whose rent was subsidized under federal law. Zellous, 906 F.2d at 95. The tenants claimed that the Department of Housing and Urban Development (HUD), together with the housing project's owners and managers, violated the Housing Act and associated federal regulations as well as the ...

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