Texas Beef Checkoff Facing Legal Challenge

In addition to an ongoing legal challenge in Montana, state beef checkoff programs in thirteen more states are now facing legal challenge.  Ranchers-Cattleman Action Legal Fund (“R-CALF”) seeks to expand the injunction it obtained in Montana to also include checkoff programs in Hawaii, Indiana, Kansas, Nebraska, Nevada, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Texas, Vermont, and Wisconsin.

Photo by Texas A&M AgriLife Research

The current beef checkoff litigation began in Montana where R-Calf filed suit against the United States Department of Agriculture in 2016.  In summary, the plaintiffs argued that because the USDA required them to pay money to the Montana Beef Council to support speech contrary to their beliefs, this violated their right to free speech under the First Amendment. In particular, plaintiffs are upset that the Montana Beef Council promotions and advertisements do not distinguish between US and foreign beef.

During this litigation, the plaintiffs obtained an injunction from a Montana federal judge, requiring that all of the $1 per head collected when cattle are sold be sent to the National Cattlemen’s Beef Board, rather than the prior practice of $.50 going to the National Cattlemen’s Beef Board and the other $.50 going to the Montana Beef Council.  Pursuant to the injunction, which is in place throughout the pendency of the litigation, if producers wish to have $.50 of their assessment send to the Montana Beef Council, they must complete a form requesting for that to be done.  The injunction was upheld on appeal by the United States Court of Appeals for the Ninth Circuit.

In August, plaintiffs filed a motion to expand this injunction far beyond the state of Montana, seeking similar injunctions be imposed on beef checkoff programs in thirteen additional states. [Read Motion here.] R-CALF claims that the checkoff program “has weakened the US cattle industry” and that this litigation seeks to prevent producers in the additional thirteen states from funding private speech with which they disagree and they believe harms their financial interests.

A critical issue in this case will be whether the promotions funded by the qualified state beef councils, like the Montana Beef Council, constitute private speech.  This is an issue that the United States Supreme Court has addressed several times, reaching differing conclusions based on the precise facts of the various cases.  For example, promotions that were part of a broader regulatory scheme included in a marketing order were found not to violate the First Amendment, but assessments for generic promotion of mushrooms were unconstitutional when certain producers did not support the messages.

The National Cattlemen’s Beef Board stated that this “attack by R-CALF and its activist partners on 13 additional state beef councils is nothing more than an attempt to broaden the damage they have caused in Montana.”  The NCBB went on to say that this litigation “has already weakened producer-directed programs that support beef demand and divided neighbors in a manner that undermines the best interests of the entire beef community.”   The Montana Beef Council claims that the injunction has caused a significant reduction on its funding this year.  Executive Director Chaley Harney reports that the Montana Beef Council anticipated collecting about $850,000 this year, but since the injunction was issued in January, they have collected less than $200,000.

This litigation is being closely watched not only by the beef industry, but by numerous other agricultural commodities that also utilize checkoff programs.

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