Judge rules beef checkoff is unconstitutional, unenforceable

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SALEM, Ohio – The beef industry’s card has again been pulled from the deck stacked against checkoff programs in place for agricultural commodities.

U.S. District Court Judge Charles Kornmann dealt a blow to the beef industry June 21 when he ruled the beef checkoff program is “unconstitutional and unenforceable.”

At the same time, the Aberdeen, S.D., judge granted requests by the plaintiffs – the Livestock Marketing Association, Western Organization of Resource Councils and three individuals – for an injunction to halt checkoff collections beginning July 15.

Attorneys for the USDA, Cattlemen’s Beef and Promotion Board, and Nebraska Cattlemen have requested a stay of the injunction and asked to begin the appeal process.

“Obviously, we are disappointed with the decision,” said Beef Board Chairman Dee Lacey, a cow-calf producer from California.

“The checkoff represents the key way for us, as producers, to invest in our futures, and this kind of tactic certainly seems counterproductive to those efforts.

“But this represents just one step in a lengthy process, and we’re in it for the long haul.”

Not the first step. Plaintiffs claimed forced association and that the board’s communications activities violate the First Amendment by using checkoff funds to spread messages some producers do not agree with, including advertising generic and foreign beef.

“We are gratified the court chose to uphold the constitutional rights of beef and dairy producers paying the mandatory beef checkoff. The decision affirms a producer’s right to free speech and the right to promote his own product,” said Billy Perrin, president of the Livestock Marketing Association.

The court’s ruling “confirms that producers will be able to use their money to promote the beef they produce, in the way they want, in association with people whose beliefs they share. It’s not up to the industry to come together to discuss a voluntary program which we can all support,” Perrin said.

The marketing association began a petition drive in 1998 in an attempt to obtain a producer referendum on the checkoff. The association later filed a lawsuit in federal district court challenging the USDA’s process to validate those petitions.

Fail to understand. “We are shocked at the severity of this ruling. Surveys show that more than two-thirds of producers still support [the program] and pay. This flies in the face of the majority who continue to support it,” said Elizabeth Harsh, executive director of the Ohio Beef Council.

“Frustration exists from the attention and resources that are being distracted and taken away from the true goal of the checkoff, implementing long-term consumer demand for beef,” Harsh said.

Harsh also noted the judge’s ruling contained inaccurate information regarding the checkoff set-up and operation.

“There are points that I think he failed to understand, including the whole federation effort,” of the checkoff, she said.

In the meantime, Harsh said officials in her office have been contacting checkoff collection points across the state, including livestock auction facilities, and reminding them to continue to assess the fees.

Producer support. The beef checkoff program was mandated in the 1985 Farm Bill and requires beef producers to remit $1 per head at the time of sale for promotion and research programs to improve the marketing climate for beef.

The checkoff is collected by qualified state beef councils, which retain up to 50 cents of every dollar. The balance of checkoff dollars is forwarded to the Cattlemen’s Beef Board at the national level.

Court records revealed beef checkoff revenues in fiscal year 2001 totaled more than $86 million.

The program was approved by 79 percent of producers in a 1988 national referendum vote. In the latest survey, released in January 2002, about 68 percent of producers said they approved of the beef checkoff program.

Prior challenge. The beef checkoff was challenged in 1994 by Jerry Goetz, a Kansas feedyard operator. Goetz filed the class action lawsuit against USDA claiming that the Beef Promotion and Research Act violated his constitutional rights. Prior to the suit’s filing, Goetz had repeatedly refused to collect and pay checkoff assessments since the program’s inception.

In 1996 a Kansas district court ruling reaffirmed the constitutionality of the Beef Promotion and Research Act of 1985. Goetz appealed the ruling and in early 1999, the U.S. Supreme Court refused to hear his challenge.

Still waiting. In April 2002, Montana ranchers Steve and Jeanne Charter and 119 other independent cattle producers filed suit in U.S. District Court in Billings, Mont., citing constitutional rights to free speech and association in regard to the beef checkoff. A ruling on that case is expected later this summer.

(You can contact Andrea Myers at 1-800-837-3419, ext. 22, or by e-mail at amyers@farmanddairy.com.)

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