In a case with broad implications for the nations agricultural commodity promotion programs, a federal judge in South Dakota on June 21 struck down the federal Beef Promotion and Research Act, which is responsible for the beef checkoff and messages such as: "Beef. Its Whats for Dinner."
In Livestock Marketing Association v. USDA, U.S. District Judge Charles Kornmann ruled: "The beef checkoff is unconstitutional in violation of the First Amendment because it requires plaintiffs to pay, in part, for speech to which the plaintiffs object."
Judge Kornmann has given the U.S. Department of Agriculture (USDA) and the Cattlemens Beef Board (CBB) until July 15 to finish collecting beef checkoff funds. After that date, the USDA and CBB are barred from any further collection of checkoff funds in order to "wind down" the program. In addition, the defendants are permanently enjoined from using any existing checkoff funds for influencing government action to preserve the program.
The beef checkoff, which raises more than $85 million annually, is paid for by a mandatory assessment on beef and dairy producers of $1 per head of cattle sold. Authorized by Congress in 1985, the program is overseen by the USDA, and run by the CBB.
The lawsuit stems from the Livestock Marketing Associations (LMA) efforts in 1998 to obtain a referendum on the continuation of the beef checkoff. Despite the LMA having collected the required number of signatures on petitions, the USDA failed to validate the signatures and schedule a referendum vote. The LMA and the Western Organization of Resource Councils filed suit seeking immediate USDA action on the petitions and a refund to beef producers of more than $10 million in checkoff funds it claims were used improperly for lobbying activities since 1998.
Following the U.S. Supreme Courts June 25, 2001 ruling in United States v. United Foods that the mushroom checkoff violates the First Amendment rights of mushroom growers, the LMA suit was expanded to include a similar constitutional challenge.
"The beef checkoff is, in all material respects, identical to the mushroom checkoff," wrote Judge Kornmann in his 21-page decision. "If the First Amendment means anything, it means that compelling speech must be the last and not the first strategy considered by the government."
Perhaps recognizing the weakness of its arguments in the wake of United Foods, the government relied heavily in this case on the novel argument that checkoffs may be constitutional if construed as an extension of the governments own speech. Judge Kornmann, in rejecting that notion, wrote: "The so-called government speech doctrine is not so much a doctrine as it is an evolving concept....The generic advertising program funded by the beef checkoff is not government speech and is therefore not excepted from First Amendment challenge....."
A separate ruling on the constitutionality of the beef checkoff is expected soon in a case pending in U.S. District Court in Billings, Montana. In Charter v. USDA, independent Montana cattle ranchers Steve and Jeanne Charter, in conjunction with the Center for Individual Freedom, seek to freeze all existing beef checkoff assets and establish an escrow account for those assets and for future checkoff payments, pending the outcome of the case. The suit also seeks a refund of past compelled payments, should the program be declared unconstitutional.
In addition, a lawsuit challenging the constitutionality of the dairy checkoff is underway in U.S. District Court in Scranton, Pennsylvania. The suit, filed on behalf of Joe and Brenda Cochran, with assistance from the Center for Individual Freedom, seeks to enjoin the USDA and the Dairy Promotion Board from collecting dairy checkoff assessments, or using existing checkoff funds without prior consent of those assessed, pending a declaratory judgment in the case.