U.S. Supreme Court Rules Against Union Access to Agricultural Employer’s Land

On June 23, the U.S. Supreme Court held that a California regulation allowing union organizers to enter an agricultural employer’s property is unconstitutional. The regulation, on the books since the mid-1970s, requires farms to permit unions to speak with and recruit farmworkers in the hour before and after work and an hour during lunchtime for up to 120 days each year. (Cedar Point Nursery v. Hassid (U.S., June 23, 2021, No. 20-107) 2021 WL 2557070.)

In the case, a strawberry plant nursery and a fruit shipment company sued the California Agricultural Labor Relations Board arguing that the regulation gave farmworker unions an easement to enter and conduct business on their land without authorization or compensation. The Court agreed, holding that the regulation took away the agricultural employer’s right to exclude trespassers from its private property, amounting to a “taking” of company property without “just compensation” in violation of the Fifth Amendment.

With the regulation essentially gone (barring the unlikely scenario that the government or the unions decide to pay farms for access to their workers), labor unions will have to find alternative means to communicate with and recruit agricultural union members. This ruling is hailed as a resounding victory for agricultural employers. For more information about this contact Sarah Hirschfeld-Sussman or anyone on DP&F’s employment team.

Supreme Court Decision is a Victory for Alcohol Beverage Retailers

Alcohol beverage retailers won a significant victory before the U.S. Supreme Court this morning.  The Court held in Tennessee Wine & Spirits Retailers Association v. Thomas that Tennessee’s two-year durational-residency requirement applicable to retail liquor store license applicants violates the Commerce Clause and is not saved by the Twenty-First Amendment.  In doing so, the Court stated that the 2005 decision in Granholm vs. Heald, which prohibited discrimination against out of state alcohol beverage producers, applied with equal force to discrimination against retailers, settling a long dispute in the courts on the applicability of Granholm to retailers.  The end result is that states must now defend any discriminatory or protectionist alcohol beverage laws without the luxury of relying on the Twenty-First Amendment, giving retailers wishing to ship across state lines a leg-up in future legal challenges.  Today’s decision, however, does not mean that retailers can begin shipping across state boundaries legally.  Additional court challenges or legislative changes are needed to fully open the door to retailer direct-to-consumer shipping.

The question of alcohol beverage retailer direct-to-consumer shipping was not directly at issue in the case.  Instead, the case centered on the constitutionality of Tennessee’s  residency requirements on state licensed alcohol beverage retailers.  Petitioner, a Tennessee retail trade association, argued that the residency requirement must be upheld because the 21st Amendment grants states broad authority to regulate alcohol within their borders.  The Court rejected that argument and concluded that:

“[Section 2 of the 21st Amendment] allows each State leeway to enact the measures that its citizens believe are appropriate to address the public health and safety effects of alcohol use and to serve other legitimate interests, but it does not license the States to adopt protectionist measures with no demonstrable connection to those interests.”

Leading up to today’s decision, many hoped the Court would issue a ruling that would not only address the residency requirement question, but also adopt a reading of the 21st Amendment that would open the door to retailer direct-to-consumer shipping.  Given the Court’s reading and application of Granholm, they may have gotten their wish.  States that allow in-state retailers to ship to consumers but prohibit out-of-state retailers from doing so will find such laws difficult to defend in the face of today’s decision.  To avoid legal challenges, states may choose to adopt statutes that allow all retailers, regardless of where they are located, the right to ship directly to consumers, or prohibit retailers from doing so altogether.

Attention will now shift to other cases directly challenging laws that prohibit out-of-state retailers from shipping to in-state consumers, such as the appeal in Lebamoff Enterprises v. Snyder  before the Sixth Circuit Court of Appeals.  The federal district court in that case ruled that, under the precedent set in Granholm, a Michigan state law that permits in-state wine retailers to ship direct to consumers must also grant the same privilege to out-of-state retailers.  Case No. 17-10191, (E.D. Mich. Sept. 28, 2018).  The appeals court stayed the appeal pending the outcome of the Tennessee Wine & Spirits Retailers case.  Retailers now will have significant support for their argument that such state laws are nothing more than protectionist measures that discriminate against out-of-state retailers.  States, on the other hand, will need to defend those laws as necessary in order to protect the health and welfare of their citizens.  However, given that today’s ruling strips states of any defense under the Twenty-First Amendment for any discriminatory or protectionist laws, retailers have gained a clear upper hand in the legal challenges to come.

The Court’s decision is available through the following link:  https://www.supremecourt.gov/opinions/18pdf/18-96_5i36.pdf .

If you have any questions, please contact Bahaneh Hobel or John Trinidad.

Tacking your New Trademark onto the Old? Supremes: Ask a Jury

Resolving a circuit split, the Supreme Court in Hana Financial, Inc. v. Hana Bank, et al., 574 U. S. ____ (2015) on Wednesday unanimously affirmed a Ninth Circuit decision that the issue of “tacking” – where a trademark user modifies its mark over time while managing to retain its longstanding use and priority position over others (i.e., “tacking” a newer mark onto an older version) – is usually an issue appropriately tried to a jury.

In so holding, the Court validated a District Court jury decision that Respondent Hana Bank did not infringe Petitioner Hana Financial’s trademark (although Hana Financial appeared to have priority in the U.S. going back to 1995) in part because Hana Bank operated under a series of “Hana” names (including advertising as “Hana Overseas Korean Club”) going back to 1994 in the U.S., and had operated under the name Hana Bank in Korea going back to 1991.

The case has some interesting implications. The question of whether two similar trademarks owned by the same party can be tacked together to provide earlier priority has historically come down to whether the marks are “legal equivalents” conveying the same, continuous commercial impression in the community and in particular, the eyes of the ordinary consumer.

Citing to an 1874 case for the proposition that “twelve men know more of the common affairs of life than does one man,” the Court determined that consumers, not judges, are in the best position to make this determination.

In the opinion rendered by Justice Sotomayor (slip opinion available at: https://home.comcast.net/~jlw28129/HANA.pdf), concerns such as potential lack of uniformity of trademark jury decisions and the resulting inconsistency of the evolving trademark case law around the tacking issue were eschewed in favor of upholding the perspective of the ordinary purchaser, through which the tacking doctrine is said to operate.  However, the Court did reserve the tacking determination for judges in bench trials (where no jury is empaneled), and on motions for summary judgment and judgment as a matter of law.

The Court indicated that jury instructions will help guide the jury and ensure application of the correct legal standard.

Sometimes the wording of a jury instruction raises more questions than answers for the jury who must decipher the lingo. The jury instruction for “tacking” in this case was: “A party may claim priority in a mark based on the first use date of a similar but technically distinct mark where the previously used mark is the legal equivalent of the mark in question or indistinguishable therefrom such that consumers consider both as the same mark. This is called ‘tacking.’ The marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked.”

What does the decision mean for brand owners?  The clear takeaway is that nothing is certain as it relates to the doctrine of tacking, and whether a given jury will agree to find that the newer iteration of a trademark is tied to an older manifestation of the same mark.  In cases where a jury has been demanded, it will be much more difficult to quickly dispose of a case involving the tacking issue on a motion prior to trial.  This creates a landscape of increased unpredictability and expense in prosecuting or defending such cases, giving rise to a host of strategic considerations on the branding side, as well as, in pre-litigation.