In an expanded attack on the Beef Checkoff, on Aug. 9, 2018 the independent rancher group, Ranchers-Cattlemen Legal Fund (R-CALF), filed a supplemental pleading asking the court to declare unconstitutional and enjoin defendants from allowing Beef Checkoff dollars to fund the private speech of 13 state beef councils without the councils first obtaining the payers’ affirmative consent to use the money.
In addition to the previously named Montana Beef Council (MBC), the supplemental pleading names: the Hawaii Beef Industry Council; the Indiana Beef Council; the Kansas Beef Council; the Nebraska Beef Council (NBC); the Nevada Beef Council; the New York Beef Council; the North Carolina Cattlemen’s Beef Council; the Pennsylvania Beef Council; the South Carolina Beef Council; the South Dakota Beef Industry Council (SDBIC); the Texas Beef Council; the Vermont Beef Council; and the Wisconsin Beef Council.
R-CALF claims use of checkoff money violates the First Amendment of the U.S. Constitution because it promotes messages or “speech” that not all producers agree with. In Montana a specific objection of R-CALF was a checkoff -funded promotion with hamburger chain Wendy’s. R-CALF claims that, since hamburger used by the chain could contain beef from countries other than the United States, the promotion of “generic” beef violated their free speech that seeks to promote only U.S.-origin beef.
R-CALF argues that MBC’s promotion of generic beef is helping importers while domestic producers lose market share.
In April of this year, the U.S. Court of Appeals for the Ninth Circuit upheld the District Court of Montana’s June 2017 decision to grant a preliminary injunction requested by R-CALF against the MBC. Essentially, the court sided with R-CALF in ruling that the MBC is a private entity that uses the federally-mandated “checkoff tax” to fund private speech.
It is important to note that nothing in the court ruling changes the requirement that the $1 Beef Checkoff mandate be collected when cattle are sold. The Montana ruling stipulates that the entire dollar be sent to the national Cattlemen’s Beef Board (CBB) office unless producers explicitly opt in to have half of the dollar they pay remain in the state. R-CALF CEO Bill Bullard explained, “It did not end the checkoff… Instead, it directed the USDA to respect the constitutional rights of producers by giving them the option as to whether they want their checkoff tax dollars to be spent by the Montana Beef Council or not.”
The case, which officially lists Sonny Perdue in his official capacity as USDA secretary of agriculture as the plaintiff, argues that the Montana court is the appropriate venue because the case “concerns policies and practices the United States has implemented uniformly in each of the jurisdictions where R-CALF requests relief. Those policies violate the United States Constitution. Therefore, requiring R-CALF to file suit in multiple jurisdictions would be inequitable and unduly delaying vindicating individuals’ constitutional rights.”
In response to the supplemental filing, the National Cattlemen’s Beef Association (NCBA), which is a contractor with the Beef Board, expressed its support for the Beef Checkoff. A statement on Aug. 10 read:
“The National Cattlemen’s Beef Association is fully committed to the Beef Checkoff Program and the state beef councils who carry out necessary demand-building programs on behalf of the industry. For more than 50 years, state beef councils have been the cornerstone of beef promotion, enjoying widespread support from the vast majority of the beef producers who invest in the Beef Checkoff.
“This week’s attack by R-CALF and its activist partners on 13 additional state beef councils is nothing more than an attempt to broaden the damage they have caused in Montana. There they have already weakened the producer-directed programs that support beef demand and divided neighbors in a manner that undermines the best interests of the entire beef community.”
NCBA went on to say that, although it is not a party to the litigation, the association’s support for the Beef Checkoff is unwavering. “We will stand with the state beef councils and help defend them against the attacks being orchestrated by R-CALF and its activist allies, who are aligned with the Humane Society of the United States and other anti-agriculture organizations,” the statement read.
As is often the situation in legal filings, the parties named are limited in how they can respond to media or other requests for comments on the case. Nonetheless, WLJ reached out to Scott Stuart, CBB Chief Executive Officer, who confirmed that he cannot comment on pending litigation. However, he said, “All Beef Board meetings are open to all beef producers without any registration fee. We welcome all investors in the checkoff to attend the meetings of the board and its advisory committees as well as become involved at the state or national level. The Cattlemen’s Beef Board is comprised of a wide swath of beef producers at every level, which is the strength of the checkoff.”
Asked if R-CALF members participate in Beef Board meetings, Bullard responded to WLJ, saying, “Yes, our members do attend some of these events (certainly not the ones held in secret), but the disparity in economic and political power between independent producers and the meatpacker-aligned voices (which also are the major recipients of the checkoff tax) such as from the NCBA and the Meat Export Federation is too great for them to have any meaningful influence.”
One of the charges is that the federal government fails to exercise control over their councils and their speech, they are often private entities, and “Their directors and employees can be selected in secret, excluding participation of a large number of cattle producers, including R-CALF and its members.”
Responding to the accusation of members being selected in “secret” and noting they are not able to directly respond to charges, the executive directors of the NBC and SDBIC explained to WLJ how their respective boards are selected. They also noted that all states have a different process for selecting board members.
NBC Executive Director Ann Marie Bosshamer said council members in her state are elected from producer peers in each of Nebraska’s nine districts. Candidates for board positions must be at least 21 years of age, live in a county within the district that is having an election and they must have owned cattle for the previous five years. Additionally, candidates are required to obtain at least 100 petition signatures from within their district. Petition signers must be at least 18 years old, be a registered voter in a county in the district that is holding an election and they must have bought or sold cattle in the previous calendar year.
Bosshamer noted there are no stipulations that candidates or board members be a member of any cattle or agricultural organization.
SDBIC Executive Director Suzy Geppert explained that the beef board in South Dakota has 24 members made of three individuals each from eight partner organizations. Those organizations represent diverse agricultural interests and include the South Dakota Livestock Market Association, South Dakota Stockgrowers Association, South Dakota Farm Bureau, South Dakota Cattlemen’s Association, South Dakota Cattlemen’s Auxiliary, South Dakota Cattlewomen, South Dakota Beef Breeds Council, and the South Dakota Farmers Union.
Geppert said, although the groups have three members each, those individuals must reach a consensus on issues because they are only allowed one vote.
Because of the pending litigation, both Bosshamer and Geppert declined to comment on current producer attitudes regarding the checkoff within their states.
Because of the injunction in Montana, the MBC is faced with a severe reduction in money available to carry out programs. Chaley Harney, MBC executive director, told WLJ, “For fiscal year 2018, we budgeted to collect $1.7 million. Normally half of that would remain in Montana for our board to decide where to invest it. But due to the preliminary injunction, we have received less than $200,000 in ‘producer-consented dollars.’” She went on, “And of those funds, the board has only been able to invest about $100,000 in actual beef promotion and education, while making the difficult decision to eliminate further programs and reserve the remaining funds in case the funds need to be used to carry out the collection process and the process of trying to get additional consent dollars.”
In announcing the supplemental pleading on Aug. 9, Bullard said, “The checkoff program has weakened the U.S. cattle industry by helping importers capture a greater share of our domestic market, and now the courts have found that USDA facilitated this by violating the constitutional rights of cattle producers. It is imperative that we proceed to protect the constitutional rights of cattle producers in these other states by stopping USDA from forcing them to fund private speech that undermines their financial and economic interests.”
Public Justice and Food Project Attorney David Muraskin, the lead attorney in the case, commented, “Our side in this fight has the momentum, and we are using it to help bring relief to ranchers in these 13 states who are currently being compelled to subsidize the speech of multinational corporations regardless of their wishes. Today’s supplemental pleading is the next step towards reform of the nation’s entire Beef Checkoff system that has become a tool for corporate consolidation and control, harming independent farmers.”
As of WLJ press time a hearing date for this case had not been set. — Rae Price, WLJ editor
