Billings Gazette: Federal Injunction against Checkoff Marketing
R-CALF wins big In Montana District Court:
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 longtime federal program requires producers to pay $1 per animal sold. Half of the money goes to a federal board, while the other half goes to the Council for marketing purposes.
R-CALF USA has opposed some of the Council’s marketing, particularly that the ads don’t distinguish domestic from foreign beef. Instead, the Council promotes beef consumption in general.
The group also sued to challenge the automatic payment to the Council, which is a private entity with some oversight from the USDA.
While the case isn’t finished, R-CALF USA CEO Bill Bullard sees the injunction as a foundational decision in his favor.
“Producers are being compelled to pay for advertising and marketing of competitors’ products," he said. "And that’s our objection. It does not benefit Montana cattle producers to promote a generic product when our product is not generic.”
The Montana Beef Council is not a defendant in the case. Those named in the lawsuit are the USDA and Sonny Perdue, the agriculture secretary atop the department. The injunction, filed on Wednesday in U.S. District Court in Great Falls, directs the USDA to enforce the injunction upon the Council.
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.
Alternatively, marketing by a government agency, which is subject to "democratic accountability," is deemed government speech. The USDA has no control over the Council’s board appointments.
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.
“We’re strictly a marketing organization," Harney said. "And bottom line, at the end of the day, our goal is to get people to eat more beef.”
She said the organization represents multiple sectors of the beef industry through a 12-member board.
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.
While the federal beef board does have some authority over the Montana Beef Council, Judge Morris described that control as "limited" with regard to specific marketing content.
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.
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Marty Irby
Senior Advisor
Humane Society Legislative Fund
The Humane Society of the United States
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