Montana Court Rules in Favor of Beef Checkoff

In a major ruling from the United States District Court for the District of Montana, the court held that the qualified state beef checkoff (QSBC) programs operating under a Memorandum of Understanding (MOU) with the United States Department of Agriculture (UDSA) do not violate the First Amendment and dismissed the lawsuit brought by the Ranchers-Cattleman Action Legal Fund (R-CALF). R-CALF filed suit against the USDA and the Montana Beef Council in 2016 claiming that Montana Beef Council’s advertising, which did not differentiate between US beef and foreign beef, violated the First Amendment rights of its members. In June 2017, adopting the recommendation of the Magistrate Judge, the court entered a preliminary injunction in favor of R-CALF on the basis that the beef checkoff program violated the First Amendment. The Ninth Circuit Court of Appeals affirmed. Then, in 2018, R-CALF successfully moved to add 15 other states to the litigation, including Texas, whose state beef councils were similar to Montana. During the time the case was on appeal, the USDA entered into MOUs with many of the qualified state beef councils that are parties to the current litigation. The MOUs give the USDA “significant discretion” to approve or reject any of the QSBC’s promotional activities. Under the MOUs, the QSBCs agree to submit any promotion, advertising, research, and consumer information projects to USDA for pre-approval. Additionally, the QSBC is required to notify the USDA of any board meetings and allow a USDA official to attend. The USDA may “direct the Beef Board to de-certify” the QSBC if the QSBC fails to comply with the terms of the MOU, which would prohibit the QSBC from receiving checkoff funds. Based upon these new MOUs, the Magistrate Judge recommended that the court reverse course and find in favor of the beef councils...MORE