Beef checkoff ruling is big win for state beef boards, advocates say

A March 30 summary judgment in favor of the U.S. Department of Agriculture in a lawsuit brought by a cattle producers’ group is being celebrated as a major win for state beef councils, as well as checkoff councils generally.

It was brought by the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF), which represents about 5,300 independent U.S. cattle producers in 43 states who are dissatisfied with the promotion efforts of the state beef boards and the Cattlemen’s Beef Board.

R-CALF members believe the state beef boards and CBB are too influenced by the giant meatpackers, which favor policies that, they say, depress cattle prices and therefore hurt the interests of cattlemen. Since its founding in 1998, R-CALF has brought several suits in favor of country of origin labeling (COOL) for meat products, and to enforce provisions of the Packers and Stockyards Act. In 2008, it filed a suit that blocked a merger between Brazil-based packer JBS—the world’s largest meatpacker and one of the Big Four in the U.S.—and National Beef.

R-CALF has 60 days from the date of the March 30 ruling to decide whether to appeal. Bill Bullard, a cattle rancher and CEO of R-CALF, said it intends to appeal.

The suit reduced income and promotion activities by the Montana beef board for three years under an injunction that required active producer consent for spending while the case was being decided.

Speech issues

The suit focused on First Amendment speech issues. R-CALF contended that its members were being forced to subsidize private speech with which they disagreed, which is barred by the First Amendment. Although the state beef boards have been integrated into a structure set up by Congress in 1985 by the Beef Promotion and Research Act, when some of them were certified as Qualified State Beef Councils (QSBCs) subject to federal oversight, R-CALF contended that they still function as private organizations.

The court agreed with the plaintiffs at first, but reversed itself after the USDA signed a series of memorandums of understanding with the beef councils promising greater oversight and control over the activities of the state boards. The MOUs specified greater federal control over the content of the promotional campaigns.

In the 2005 case Johanns v. Livestock Marketing Association, the U.S. Supreme Court had ruled that for a private organization’s speech to be deemed government speech, the government must “control the speech from beginning to end.” The court listed factors to determine whether the required control is present, including whether regulations specify what the campaigns may and may not contain, whether government officials may attend and participate in open meetings at which the content development occurs, and whether the government retains ultimate veto power of the private organizations’ advertisements “right down to the wording.”

The Johanns court held that because the national beef checkoff program was subject to significant control by Congress and USDA, the program’s promotional campaigns amounted to government speech. The recently signed MOUs were held by the magistrate judge to have provided whatever government control was previously lacking.

R-CALF questions whether the promised oversight is effective. “The court cannot convert private speech into government speech just by declaring it,” said attorney David Muraskin. who represented R-CALF and is Food Project Senior Attorney with Public Justice in Washington, D.C. To Muraskin, the important point is that “the court held that the beef boards have been operating unconstitutionally for the past 30 years.” He said a revocable MOU doesn’t provide enough First Amendment protections.

Joe Maxwell of Family Farm Action—not a party to the suit but a supporter of R-CALF’s position—argues that state beef boards often operate opaquely and don’t provide enough information for effective USDA oversight.

Greg Hanes, CEO of the Cattlemen’s Beef Board, said the case has been closely watched by all commodity checkoff boards.

“The foundation of the beef checkoff has always been state beef councils that collect checkoff funds and determine how those investments are used for research, marketing and promotion efforts in individual states. Those efforts are directed by the same cattlemen and cattlewomen who pay the checkoff, so this victory goes a long way toward ensuring they continue to direct those investments,” said Colin Woodall, CEO of the National Cattlemen’s Beef Association, in a statement released after the decision.

David Murray can be reached [email protected].