USDA prevails in state beef checkoffs suit

The U.S. 9th Circuit Court of Appeals has affirmed a decision by a district court in Montana upholding the constitutionality of Beef Checkoff programs in a case brought by Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF).

“The 9th Circuit Court of Appeals awarded USDA and several Qualified State Beef Councils (QSBCs) with a long-awaited victory,” Colin Woodall, CEO of the National Cattlemen’s Beef Association, said in a statement. “A three-judge panel rejected R-CALF’s argument that the work of QSBCs wasn’t receiving adequate government oversight, finding that the government speech of QSBCs and their contractors is properly overseen by USDA.”

In 2016, R-CALF filed a lawsuit challenging USDA’s memorandum of understanding (MOU) with the Montana Beef Council (MBC), alleging that checkoff dollars collected from cattle producers are an unconstitutional subsidy of private speech.

The district court in 2018 issued a preliminary injunction preventing the use of checkoff funds for promotional campaigns without the producers’ consent, declining to consider the effects of the MOU. On remand, R-CALF amended its lawsuit to include additional QSBCs that had MOUs with USDA.

In 2020, the district court found that while R-CALF had the standing to sue, the MOUs gave the secretary of Agriculture sufficient control over the promotional program to make the QSBCs’ speech—and the speech of third parties they paid—effectively government speech. Thus, it is protected from a First Amendment challenge.

Citing previous challenges to the pistachio and table grape checkoff programs, the 9th Circuit stated QSBCs must submit for “pre-approval” annual budgets, promotional funding, research and failure to comply can lead to decertification of the QSBCs by the secretary.

The MOUs grant the secretary of Agriculture pre-approval authority over “any and all promotion, advertising, research, and consumer information plans and projects.” The secretary also reviews and approves the QSBCs’ budgets and marketing plans, detailing their anticipated expenses and disbursements. Government officials can participate in QSBC board meetings at which promotional and funding decisions are made.

The 9th Circuit court ruled third-party speech not subject to pre-approval is also “effectively controlled” by the government because Congress envisioned that industry nonprofits would implement promotions under the Beef Checkoff program. The ruling cited the Beef Promotion and Research Act’s regulations requiring that all third-party speech “strengthen the beef industry’s position in the marketplace,” and not mention “brand or trade” names, engage in “unfair or deceptive acts or practices,” or seek to “influence governmental policy or action.” R-CALF argued that such safeguards were insufficient because the government does not exercise final pre-approval authority over some third-party speech.

R-CALF CEO Bill Bullard stated while they are disappointed in the outcome, their case did force the reform of the National Beef Checkoff Program.

“The case established that the Beef Checkoff program operated for decades in violation of the Constitution and the secretary of Agriculture then took steps to correct the violation by asserting more governmental controls over the speech of the various state beef checkoff councils,” Bullard said to Brownfield Ag News.

“They corrected a long-standing violation, a violation of First Amendment rights of cattle producers. That, we can be thankful for, that we at least made that positive step on the behalf of cattle producers.”

R-CALF has another case pending in front of the U.S. District Court for the District of Columbia.

In that case, R-CALF argued that USDA did not have the authority to enter into the MOUs and “violated legal procedure mandated by the Administrative Procedure Act by failing to allow for public comment. This violation has denied R-CALF USA’s members—and ranchers everywhere—their right to weigh in on a federal program they are forced to fund,” according to a press release on the case.

Woodall stated the decision ends a six-year legal battle which “exhausted significant Checkoff and industry resources.”

“We are pleased this battle is now behind us and we remain thankful for the volunteer cattle and beef industry leaders and staff, at both the state and national level, who work tirelessly to promote beef and ensure the markets for beef and cattle continue to grow.”

Signature extension

Organizers of the National Beef Checkoff Petition Drive have received an extension until Oct. 3 to collect additional signatures needed to qualify for a checkoff referendum. Due to COVID-19 restrictions, R-CALF, other groups and volunteers could not gather signatures in public locations from cattle producers, they said. As a result, the organizers relied solely on the online petition to gather signatures and were able to collect 18,790 signed petitions.

Organizers had 12 months to collect the required 88,269 signatures starting July 2, 2020. On May 20, 2021, the organizers made a written request to Agriculture Secretary Tom Vilsack for a 12-month extension. On Aug. 3, Vilsack granted a 60-day extension, stating the extension “reflects the prevailing will of producers.”

“We don’t have much time, but R-CALF USA will do everything it can to help the organizers achieve the required signatures by the new deadline,” said Bullard. — Charles Wallace, WLJ editor 

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