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USDA defends checkoff funding of state beef council

The USDA tried to convince the 9th U.S. Circuit Court of Appeals to overturn a ruling that a state beef council can’t receive national beef checkoff dollars.
Mateusz Perkowski

Capital Press

Published on March 6, 2018 9:20AM

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PORTLAND — The federal government claims it hasn’t violated the free speech rights of ranchers by requiring them to fund a state beef council with checkoff dollars.

Last year, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America won a preliminary injunction prohibiting the Montana Beef Council from using beef checkoff dollars for advertising campaigns.

Under the national beef checkoff program, ranchers pay an assessment of $1 per head to pay for promotions overseen by USDA. Half of that money collected in Montana was allocated to the Montana Beef Council.

U.S. District Judge Brian Morris ruled in 2017 that the state beef council is organized as a private corporation, precluding it from deciding how to spend money collected from ranchers by USDA.

“The government cannot compel citizens to subsidize a private advertising program for the sole purpose of increasing demand for a product,” Morris said.

That ruling is now being challenged by USDA before the 9th U.S. Circuit Court of Appeals, which heard oral arguments in the case March 5 in Portland, Ore.

If the judge’s reasoning prevails, R-CALF expects that other state beef councils will also lose checkoff funding, said Bill Bullard, the group’s CEO.

Although the Cattlemen’s Beef Board now receives the full $1 fee, R-CALF considers that “the lesser of two evils,” said Bullard.

Otherwise, the state beef council sends money to the Federation division of the National Cattlemen’s Beef Association, which opposes many of R-CALF’s policies, Bullard said.

Money spent on promotions by the Cattlemen’s Beef Board — which is directly overseen by USDA — is a form of government speech that doesn’t violate free speech rights because it can be altered through the political process.

However, the Montana Beef Council isn’t under the USDA’s direct control because the federal agency can’t appoint or remove its board members or direct how it spends checkoff dollars, the judge said.

During oral arguments before the 9th Circuit, an attorney for USDA argued the Montana Beef Council’s generic promotions are actually government speech because they’re effectively controlled by the federal agency.

The state beef council’s messages are still subject to the same “statutory and regulatory constraints” as the promotions funded by the national Cattlemen’s Beef Board, according to USDA.

The USDA can “certify” a state beef council to qualify for the program, which is analogous to an appointment, or “decertify” the council, said Nicolas Riley, an attorney for the government.

The USDA can investigate the state beef council after receiving a complaint alleging its promotions have violated the rules, and can review its budget and other records, the federal agency said.

Ranchers also aren’t compelled to fund the state beef council’s promotions due to an “opt-out” mechanism, in which case all of their checkoff dollars go to the national program, the federal government argued.

This opt-out option weighs against the need for a preliminary injunction, Riley said.

David Muraskin, an attorney for R-CALF, said the Montana Beef Council was correctly ruled ineligible to spend checkoff money because such councils “are supposed to be independent, separate bodies.”

Unlike the Cattlemen’s Beef Board, the state council is not democratically accountable to the ranchers who pay checkoff fees, he said. “Our constitutional right is to have actual democratic means to speak against the council.”


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