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

Checkoff groups hold Washington showcase

Faced with bills that would restrict their activities, 16 agriculture research and promotion groups recently held an educational showcase near Capitol Hill to show off what they do. The checkoff groups, which raise their money through checkoffs that require farmers to pay into a fund when they sell a product, paid to rent space in the Hyatt Regency Hotel on September 26, but Agriculture Undersecretary for Marketing and Regulatory Programs Greg Ibach and Agricultural Marketing Service Administrator Bruce Sommers spoke at the event. Ibach, a rancher, was Nebraska's director of agriculture and served on the Nebraska Beef Council and the Cattlemen's Beef Board, a national group, before taking a position in the Trump administration. He said the showcase was "a great opportunity" to help members of Congress and their staffs understand that the checkoffs allow farmers and ranchers "to pool their money together and work on research and promotional events to better inform consumers why the products they raise are good for them and nutritional and beneficial." Reporters asked Ibach about the bills introduced by Sens. Mike Lee, R-Utah, and Cory Booker, D-N.J., and Reps. Dave Bratt, R-Va., and Dina Titus, R-Nev., that would restrict checkoff activities. The bills would strengthen prohibitions on checkoff programs contracting with organizations that lobby on agricultural policy, establish program standards that prohibit anticompetitive behavior and engaging in activities that may involve a conflict of interest and increase transparency through publication of checkoff program budgets and expenditures, and means for audits of compliance. Ibach replied that USDA "works closely" with the checkoff groups to make sure they comply with the law...MORE

Checkoff Legal Battle May Expand to 13 New States

The beef checkoff faces new challenges in 13 states as opponents have expanded their legal campaign following a Montana injunction last year. The Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) has asked District Court Judge Brian Morris, Great Falls, MT, to expand the injunction to include checkoff funds in Hawaii, Indiana, Kansas, Nebraska, Nevada, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Texas, Vermont and Wisconsin. The current injunction against the checkoff was upheld by the 9th Circuit Court of Appeals in April, and only applies to Montana. Under the injunction, the $1 beef checkoff is still collected, and the money is sent to the Cattlemen’s Beef Board. Montana ranchers who wish for half of their dollar to go to the Montana Beef Council must complete a producer consent form, and the CBB then sends the money back to Montana. Montana Beef Council executive director Chaley Harney told Drovers the injunction has dramatically reduced the organization’s revenue this year. “We expected $1.7 million to be collected by the checkoff (in Montana),” Harney said. “Half of that, or about $850,000, would stay in Montana. Since the injunction we’ve received less than $200,000.” R-CALF and other opponents to the beef checkoff say they object to their money being used to “fund private speech with which they disagree and cannot influence.” In a statement, R-CALF CEO Bill Bullard says the “checkoff program has weakened the U.S. cattle industry,” and that his group’s objective is to stop “USDA from forcing (producers in the additional 13 states) to fund private speech that undermines their financial and economic interests.” The national Cattlemen’s Beef Association (NCBA), however, says it 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.”...MORE

Group defends checkoff injunction before appeals court

In oral arguments before the Ninth Circuit Court of Appeals on March 5, R-CALF USA’s attorney, David Muraskin of Public Justice, defended the group’s preliminary injunction awarded by the U.S. District Court for the District of Montana. The preliminary injunction enjoins Agriculture Secretary Sonny Perdue from compelling Montana ranchers to subsidize the private speech of the Montana Beef Council without first obtaining the affirmative consent from the rancher-payees. Before the appellate court’s three-judge panel, Muraskin argued that the government is wrong in claiming that the promotional and advertising messages of the Montana Beef Council is government speech; and even if it is not, then the First Amendment rights of Montana ranchers are protected by allowing ranchers to opt out of sending their money to a private corporation. Muraskin urged the court to reject the government’s argument because Purdue does not manage the operation of the Montana Beef Council to the extent necessary to meet fundamental standards for government speech. Therefore, Muraskin asserted, the Montana Beef Council’s speech is private speech subject to the Constitution’s protections...more

Oklahoma Ranchers seeking Supreme Court intervention in State Checkoff Referendum

Two organizations are seeking state Supreme Court intervention to prohibit the certification of the beef checkoff referendum. Last week, members of the Organization for Competitive Markets and R-CALF USA joined to file with the Oklahoma Supreme Court, requesting the court enter declaratory judgement and prohibit the Oklahoma Department of Agriculture, Food and Forestry from certifying the Oklahoma beef checkoff program referendum. "The legal application is in response to the Oklahoma Cattlemen's Association's attempt to create a new Oklahoma state beef checkoff program through a referendum which began on Oct. 2, 2017," according to a joint press release from OCM and R-CALF USA. If passed, the referendum would require all state cattle producers to pay the Oklahoma Beef Council another $1 for each head of cattle sold, according the release. In the current federally mandated beef checkoff program, producers already pay $1. The state referendum then would effectively double state cattle producers' beef checkoff fees by requiring an extra $3.2 million a year. Documents filed with the state Supreme Court outline numerous constitutional and legal irregularities for both the petition signature gathering and election processes, according to the release, saying it creates an "unfair and unjust election." Two organizations are seeking state Supreme Court intervention to prohibit the certification of the beef checkoff referendum. Last week, members of the Organization for Competitive Markets and R-CALF USA joined to file with the Oklahoma Supreme Court, requesting the court enter declaratory judgement and prohibit the Oklahoma Department of Agriculture, Food and Forestry from certifying the Oklahoma beef checkoff program referendum. "The legal application is in response to the Oklahoma Cattlemen's Association's attempt to create a new Oklahoma state beef checkoff program through a referendum which began on Oct. 2, 2017," according to a joint press release from OCM and R-CALF USA. If passed, the referendum would require all state cattle producers to pay the Oklahoma Beef Council another $1 for each head of cattle sold, according the release. In the current federally mandated beef checkoff program, producers already pay $1. The state referendum then would effectively double state cattle producers' beef checkoff fees by requiring an extra $3.2 million a year. Documents filed with the state Supreme Court outline numerous constitutional and legal irregularities for both the petition signature gathering and election processes, according to the release, saying it creates an "unfair and unjust election."...more

Groups file for injunction on vote to double checkoff on cattle

Some 40 Oklahoma ranchers are backing Montana-based Ranchers-Cattlemen Action Legal Fund against the Oklahoma Cattlemen’s Association’s vote for an increase in the beef checkoff amount. On Monday, R-CALF and Nebraska-based Organization for Competitive Markets filed an application for an injunction with the state Supreme Court requesting it stop the Oklahoma State Department of Agriculture from certifying the results of the Oklahoma beef checkoff referendum to take place Nov. 1. Ballots have already been mailed out to the 3,200 cattlemen registered with the Oklahoma Cattlemen’s Association. If approved, the checkoff referendum would increase the drop-off fee from $1 per head sold to $2 per head. The fee hike would raise an additional $3.2 million annually to be used to promote beef sales. In a joint statement, the two organizations claim the petition that allowed the vote contains constitutional and legal irregularities. For 44-year-old Heavener rancher Kendall Stacy, who has 130 head of cattle, said it’s about time the vote was halted. Late Monday afternoon, the Oklahoma Department of Agriculture issued a statement saying it was reviewing the lawsuit and is confident proper procedures were followed in approving the petition for the referendum...more

Oklahoma Cattlemen Want Out-of-State “Meddling” to Stop

Early, mail-in voting continues in Oklahoma’s secondary Beef Checkoff referendum, but efforts to stop the process may be in motion. That’s the opinion of some members of the Oklahoma Cattlemen’s Association (OCA), which issued a statement calling for “out-of-state activists” to stop “meddling in our state’s referendum.” The statement, signed by 19 OCA members, including the current, future and three former association presidents, says out-of-state groups may “have either filed or are considering filing a lawsuit to stop the current refundable Oklahoma Beef Checkoff referendum.” The statement notes that all regulations and state statutes were followed when conducting the petition and current checkoff vote. Oklahoma is attempting to establish a producer-funded state-level promotion, marketing, research and education program for beef and beef products. To do so, producers are asked to vote on a state-wide assessment of $1 per head when an animal changes ownership, all of which is refundable on request. That $1 assessment would be in addition to the $1 national beef checkoff program already in place. According to the statement from OCA, “earlier this month, one of the out-of-state groups sent out a memo casting a wide net searching for a state beef producer to file the suit. This follows the current misinformation campaign that Organization for Competitive Markets (OCM), Humane Society of the United States (HSUS) and R-Calf are leading in our state to discourage and deny beef producers the right to vote.”...more

Beef Council must get permission to use checkoff fees, judge rules

A federal judge has ruled that the Montana Beef Council should first get permission from ranchers to spend marketing fees it collects on behalf of the government, according to an ongoing First Amendment lawsuit. The ruling is part of a lawsuit brought last year by Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, or R-CALF USA, to challenge a fee program administered by the U.S. Department of Agriculture. U.S. District Judge Brian Morris upheld an injunction that bars the Council from automatically collecting funds from the Beef Checkoff Program. The constitutional issue is whether or not the mandatory checkoff fees go toward private or public speech by the Council. Judge Morris wrote in his order that producers who disagree with the Council's advertising shouldn't be forced to subsidize it because the Council's ads are deemed private speech. "The government's statutorily authorized control over the Montana Beef Council appears inadequate to transform the Montana Beef Council's advertising into government speech," Morris wrote. Checkoff fees are the sole source of revenue for the Montana Beef Council, according to its executive director, Chaley Harney. The group took in about $929,111 in 2016 for its various promotional activities. Harney declined to comment specifically on the ongoing case, though the Council isn't a defendant. She did say that the Council doesn't specifically distinguish domestic beef in its advertising because the USDA's Beef Board is prohibited from doing so. The Council follows closely, or "mirrors," those federal rules, Harney said. The Council can still collect checkoff fees, however. But it must get "affirmative consent" from producers to get the money, according to the injunction. Harney said Friday that the Council is still determining how to follow the new rule...more

 The order is embedded below


 https://drive.google.com/file/d/0B8Yd5M8kgeNtZUZrTl9GMzZWTWc/view?usp=sharing

Federal magistrate takes Beef Checkoff under advisement

Federal Magistrate Judge John T. Johnston heard arguments for 55 minutes Tuesday from attorneys representing the activist legal fund R-CALF USA and Secretary of Agriculture Tom Vilsack about the Beef Checkoff program. Judge Johnston of the U.S. District Court in Montana then took his range of options under advisement. R-CALF wants him to grant a temporary restraining order while Secretary Vilsack believes the challenge to the Beef Checkoff should be dismissed for lack of jurisdiction or for failure to state a claim. R-CALF would also settle for a preliminary injunction. R-CALF, with the long formal name of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, is a Billings, MT-based organization for independent cattle and sheep producers. It sued the secretary May 2, “alleging that the United States Department of Agriculture turns over proceeds from a federal tax on each sale of cattle to the private Montana Beef Council, to fund the council’s private speech, harming R-CALF USA’s members.” It said “the government-compelled subsidy of the speech of a private entity, which is not effectively controlled by the government, is unconstitutional under the First Amendment of the United States Constitution and should be enjoined.” The R-CALF lawsuit, however, revisits some of the the same ground as a 2005 challenge to the Beef Checkoff program that went all the way to the U.S. Supreme Court, which found the $1 per head charge for industry marketing and research funds “government speech,” not the commercial speech of individuals...more

Beef Checkoff goes on trial Tuesday in Montana

The Beef Checkoff is up Tuesday for a federal court hearing where anything could happen from dismissal of the challenging lawsuit to a temporary restraining order for the plaintiff’s. The Beef Checkoff refers to money for marketing and research, including food safety research, to promote the cattle industry. The Beef Promotion and Research Act of 1985 gives the Secretary of Agriculture the power to impose a $1 per head charge each time cattle are sold. The latest challenge to the Beef Checkoff was filed May in U.S. District Court in Great Falls, MT. The Billings, MT, Ranchers-Cattlemen Action Legal Fund of the Stockgrowers of America – usually referred to as R-CALF, sued Secretary of Agriculture Tom Vilsack over program details. The $1 per head Checkoff is split between a national fund, known as the Cattlemen’s Beef Promotion and Research Fund, and a qualified state beef council (QSBC), in most states. R-CALF sued, claiming the U.S. Department of Agriculture does not have a “procedure by which a cattle producer who disagrees with the Montana Beef Council’s message.” However, attorneys for USDA said such a procedure does exist and there is an opt-out option that was found consistent with the First Amendment. In a 2005 Supreme Court case, promotions like those funded by the Montana Beef Council, were found to be “government speech” and therefore legal. R-CALF attorneys are telling Judge Morris that the Montana Beef Council is not sufficiently under USDA control for the 2005 standard to apply to it. The Supreme Court found that “compelled funding of government speech does not alone raise First Amendment concerns” and there is no right not to fund government speech...more

Beef Checkoff battle heats up in federal court

Billings, Mont. - A flurry of motions were filed recently in the lawsuit filed by R-CALF USA against the national beef checkoff program (Beef Checkoff). The group's lawsuit was filed May 2 in the U.S. District Court for the District of Montana. The initial complaint alleges the government, represented by Agriculture Secretary Tom Vilsack and the U.S. Department of Agriculture (USDA), is operating the Beef Checkoff in violation of the U.S. Constitution by compelling cattle producers to subsidize the private speech of private state beef councils, notably the Montana Beef Council. Members of R-CALF USA, the complaint alleges, object to the Montana Beef Council's speech because it advocates that all beef is the same regardless of where or how it was produced. In July the government requested an extension of time for which to answer the complaint and R-CALF USA did not object. But, rather than provide a typical answer, the government filed a motion in early August to dismiss or stay the group's lawsuit. R-CALF USA fired back with its own cross-motion in late August asking the court to award summary judgement and immediately end the checkoff program's unconstitutional taxation of ranchers. The group claims it is entitled to summary judgement because the government, in its motion to dismiss or stay, essentially acknowledged that the Beef Checkoff is improperly authorizing federal taxes to be used to fund private speech. The government's reply to R-CALF USA's opposition to the motion to dismiss or stay was due September 7 and its opposition to R-CALF USA's cross-motion for summary judgment would have been due September 14. But the government again requested a delay until nearly the end of September and the court granted its request. On September 12, the same day the court granted the deadline extension for the government, R-CALF USA filed a new motion , this one for a temporary restraining order (TRO), which is an emergency action to prevent the infliction of irreparable injury. In this case, the group seeks a TRO to stop the government from continuing to use tax monies paid by cattle producers to fund the private speech of the Montana Beef Council until the court can act on the group's cross-motion for summary judgment or a preliminary injunction...more

USDA clarifying rule allows ranchers to opt out of beef council checkoffs

The USDA is “clarifying” a little-known policy the agency insists has long been in place allowing ranchers to opt out of allocating half of their checkoff fee payments to qualifying state beef councils, according to a court document. In its Aug. 4 motion in Montana district court, USDA argued that in light of the opt-out policy, the judge should dismiss a case filed by Ranchers-Cattleman Action Legal Fund, United Stockgrowers of America challenging the constitutionality of current checkoff fee management. R-CALF alleges the government has forced member cattleman to fund state beef councils that often promote beef in general rather than U.S. beef or beef from their states, in violation of their First Amendment rights. R-CALF has asked that the full $1-per-head checkoff fee paid on cattle sales go to the national Cattleman’s Beef Promotion and Research Board, which they agree operates in compliance with the law. R-CALF officials said their suit targets the Montana Beef Council as a test case. Officials of the Montana council declined to comment. USDA believes publicizing the opt-out provision eliminates R-CALF’s “compelled subsidy claim.” “To the extent plaintiff’s members are contributing to the Montana Beef Council against their wishes, they are doing so only because they have failed to avail themselves of this procedure,” the USDA motion reads. Short of a dismissal, USDA requested that the court at least stay the case until after the process of clarifying the policy is complete. Public comment on the proposed clarification rule will be accepted through Sept. 13, and USDA noted R-CALF members are free to participate...more

R-CALF USA’s Attorneys Seek Quick End to Beef Checkoff Lawsuit

In response to the government’s August motion to dismiss or stay the lawsuit R-CALF USA filed against the national beef checkoff program (Beef Checkoff) in May, late yesterday R-CALF USA’s attorneys asked the court to award R-CALF USA summary judgment and immediately end the program’s unconstitutional taxation of ranchers. The group’s lawsuit alleges the government, represented by Agriculture Secretary Tom Vilsack and the U.S. Department of Agriculture (USDA), is operating the Beef Checkoff in a manner that violates the U.S. Constitution. According to the lawsuit, the Beef Checkoff, which compels producers to pay $1 per head every time cattle are sold, is a federal tax that funds the private speech of the Montana Beef Council. The group states that the council’s private speech is objectionable because it promotes the message that there is no difference between domestic beef produced under U.S. food safety laws and beef produced in foreign countries. Compelling citizens to subsidize private speech violates the First Amendment, the group says. In its August motion, the government barely contested R-CALF USA’s claim that the checkoff had been an unconstitutional, compelled subsidy. Instead, USDA argued the subsidy was no longer compelled because the agency is currently promulgating a new rule that would allow producers in most states to petition their respective state beef councils to redirect checkoff dollars away from those private state councils and to the federal Beef Checkoff program, which is operated under the direct supervision of the USDA. Citing the proposed rule, the government moved to either dismiss or to stay the case, saying it believes the disputed tax distribution will be resolved through its rulemaking process. In R-CALF USA’s motion it states that the government’s proposed solution is woefully inadequate. The group asserts that a violation of the Constitution cannot be remedied by imposing an additional burden on independent cattle producers though an opt-out scheme. Instead, the Constitution requires the government first obtain the affirmative consent from those who are required to pay the federal cattle tax before it can use those taxes to fund private speech...more

Beef checkoff referendum results

The Texas Department of Agriculture (TDA) announced Texas beef producers have voted to establish a state-level Beef Checkoff program, which was approved by a wide margin of 66.79 percent of voters. Overall, 33.21 percent of voters opposed the measure. TDA conducted this referendum upon petition by cattle industry organizations under the authorities designated by the Texas Legislature. "Texas is the largest cattle producing state in the nation, and our beef is among the highest-quality in the world," said Agriculture Commissioner Todd Staples. "As Texas ranchers continue to grow and raise the bar to meet consumers' tastes and preferences, it is my hope these funds will be used in a manner to enhance our producers' profitability and sustainability of food production. The Lone Star State is a national leader in agriculture, and I'd like to keep it that way." Passage of the referendum establishes a producer-funded program without the use of tax dollars. The Beef Checkoff program will research ways to continue improving Texas beef quality, as well as educate prospective consumers of Texas beef around the world. Texas beef producers will pay a refundable assessment of no more than $1 per head of cattle they sell. Collection of the assessment will begin on Oct. 1...more