On Wednesday, the U.S. Supreme Court began hearing oral arguments in an appeal of a ruling by the U.S. Court of Appeals for the Eighth Circuit that found the national Beef Promotion and Research Act in violation of the First Amendment. 

Plaintiffs in the case are the Livestock Marketing Association (LMA), the Western Organization of Resource Councils (WORC), and three individuals in an earlier petition. Their lawsuit calls for ending the checkoff program on the grounds that it violates some cattle producers’ First Amendment rights by forcing them to pay for beef promotion messages with which they do not agree. Specifically, plaintiffs have complained that the checkoff promotes beef, in general, rather than just U.S. beef. Importers also pay the checkoff assessment.

In total, 113 state and national beef industry and general agriculture organizations filed friend-of-the-court briefs supporting the Beef Checkoff Program, as did attorneys general from 35 states and Puerto Rico and the chairmen of both the U.S. House and Senate Agriculture Committees. Nebraska Cattlemen, Inc., leading a group of supportive producers intervening on behalf of the checkoff, is a defendant in the case along with the U.S. Department of Agriculture and the Cattlemen’s Beef Promotion and Research Board.

The high court is expected to reach its decision on the constitutionality of the Beef Checkoff Program in the first half of 2005, and the beef checkoff continues to operate through these proceedings. 

In addition, several states have held referendums to continue the checkoff program at the state level. So far 28 states have legislation in place to continue the checkoff program at the state level. These include: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Missouri, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wyoming.

Even with legislation in place, some states still need to conduct referendums before a checkoff program can be implemented at the state level. To date, several state have already conducted state checkoff referendums. Kentucky conducted a referendum Dec. 7, and in January, Ohio votes on a referendum to increase the Ohio Beef Checkoff from fifty cents to one dollar per head, which would go into affect only if the national program is not in operation. Three other states still have to conduct votes to initiate their programs; those include Florida, Georgia and Texas.

Checkoff history
Congress created the current Beef Checkoff Program via the 1985 Farm Bill as a tool to build demand for beef, noting “the production of beef and beef products plays a significant role in the Nation’s economy.” In a 1988 referendum, 79 percent of the nation’s cattle producers and importers voted in favor of making their $1-per-head checkoff contributions mandatory.

Through the program, cattlemen pool their money to conduct promotion, research, education and information programs aimed at building demand for beef here and abroad and, as a result, increasing their opportunities for profit.

In July 2003, a panel of three judges at the Eighth Circuit Court of Appeals upheld a June 2002 ruling by District Court Judge Charles Kornmann deeming the program unconstitutional.

At the same time this case was unfolding, however, U.S. District Judge Richard Cebull of Montana used the very same transcript in a similar case as Judge Kornmann used in the LMA suit and came up with a different ruling - declaring the checkoff constitutional.

That case in the Ninth Circuit was brought by Montana ranchers Stephen and Jeanne Charter and has been appealed to the Ninth Circuit Court of Appeals, which has set aside its review until the Supreme Court rules in this case.

“It’s been a long road to the Supreme Court,” Beef Board Chief Operating Officer Monte Reese said after the hearing today. “Throughout these years of litigation, however, the producer members of the Beef Board have remained focused on investing checkoff dollars into programs that they believe will be most efficient in building demand for beef. And, in fact, demand increased more than 16 percent between 1998 and 2003, after nearly 20 years of steady decline."

In July 2004, independent market research that is representative of the U.S. beef industry indicates that 70 percent of producers support the beef checkoff. You can read more on how checkoff funds are spent by going to the Cattlemen’s Beef Board Web site at www.beefboard.org.

LMA cautions states on ‘mandatory/voluntary’ beef checkoffs
A number of states are taking steps to protect the state portion of the beef checkoff, if the national checkoff is declared unconstitutional. But LMA’s Vice President for Government and Industry Affairs, Nancy Robinson, warned that these new programs, commonly called “mandatory/voluntary,” could face legal challenge.

The “mandatory/voluntary” concept means that producers must pay at the point of sale, but will be able to request a refund. LMA’s attorneys have advised that the state legislatures and state beef councils setting up such checkoffs “may be facing some litigation of their own should their state programs include compulsory elements that would violate the First Amendment’s prohibition against compelled speech and association.”

While LMA supports “a truly voluntary checkoff,” it “does not support the mandatory/voluntary concept,” she said. That’s because “collecting funds in this manner is principally for the purpose of getting your money up-front and hoping that producers, particularly small producers, will not request a refund.