R-CALF Beef Checkoff Case to Continue

Ranchers Group to Continue Legal Pursuit of Beef Checkoff Program

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
Connect with Todd:
A federal court will allow a lawsuit challenging USDA's implementation of the Beef Checkoff program. (DTN file photo by Chris Clayton)

LINCOLN, Neb. (DTN) -- A lawsuit against USDA challenging the Beef Checkoff program will be allowed to continue after a federal court on Wednesday denied the agency's motion to dismiss.

Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, or R-CALF USA, filed suit in September 2020 alleging USDA changes to the program were done without following the Administrative Procedures Act.

R-CALF alleges USDA "substantively amended" the program by entering into certain agreements with state beef councils without following notice-and-comment rulemaking.

USDA had asked the U.S. District Court for the District of Columbia to dismiss the case on several grounds. The D.C. court ruled R-CALF has standing to challenge USDA's actions.

On May 2, 2016, R-CALF sued USDA, alleging the federal Beef Checkoff program amounts to a "government-compelled subsidy of private speech of a private entity," and argued it was unconstitutional. A preliminary injunction was granted by the U.S. District Court for the District of Montana.

USDA then entered into memoranda of understanding with 20 state beef councils in Colorado, Florida, Hawaii, Indiana, Kansas, Maryland, Montana, Nebraska, Nevada, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia and Wisconsin.

The group now will be allowed to challenge the constitutionality of the use of checkoff funds by private state beef councils to fund speech that is "harmful" to independent, domestic producers, R-CALF said in a news release.

R-CALF said that in entering into the agreements, "USDA denied R-CALF USA's members -- and ranchers everywhere -- their right to weigh in on a federal program they are forced to fund."

The group has asked the D.C. court to declare illegal the agreements with state checkoffs.

"The district court ruling yesterday rightly recognizes that independent ranchers have a right through the courts to challenge a system that uses their money to prop up multinational agribusiness," said David Muraskin, litigation director of the Public Justice Food Project and counsel for R-CALF USA.

"USDA entered into these MOU's illegally by skipping a true public-input process, which is essential to good governing. It continues to be a long fight for American ranchers who just want the level playing field they're entitled to by law, and today represents a victory in that long fight."

R-CALF USA CEO Bill Bullard said the group hopes to prevent USDA from engaging in "unlawful government overreach.

"As a federal agency, the USDA is authorized only to carry out federal statutes, and if conditions change and the implementing regulations for the statutes need to be changed, then the agency is obligated to involve the people and entities it regulates in a transparent process," he said in a statement.

"This is an example where the USDA, instead, is attempting to run roughshod over those it regulates."

A district court in Montana and the U.S. Court of Appeals for the Ninth Circuit ruled that while the checkoff program had been administered in violation of the Constitution for decades, the agreements between USDA and the state checkoff rectified the violation.

R-CALF said in a news release on Thursday it was considering its options for how to proceed in the still-pending Montana litigation.

Back in November 2018, the Montana court granted R-CALF's motion to expand an ongoing lawsuit to at least 13 states.

The $1-per-head federal checkoff sends 50 cents to the Cattlemen's Beef Promotion and Research Board while 50 cents goes to state beef councils.

Fifteen states also have a state-operated $1 checkoff: Alabama, Georgia, Iowa, Idaho, Illinois, Kentucky, North Carolina, North Dakota, Ohio, Oregon, South Carolina, Tennessee, Texas, Utah and Washington.

A lawsuit filed in 2014 by the Organization for Competitive Markets demanded the release of 9,300 pages of documents related to the USDA's Office of the Inspector General investigation into the beef checkoff program. The documents stem from two OIG audits of the beef checkoff and its contractors, including the National Cattlemen's Beef Association.

The audits found producer investments in the checkoff are protected by a firewall that prevents beef checkoff dollars from being used for policy activities. Two audits by the OIG and several random audits by USDA found contractors to be in compliance with the laws that protect checkoff funds.

In 2017, a federal court ordered the release of thousands of documents requested by the OCM, but most of them were heavily redacted.

Read more on DTN:

"Group: Beef Checkoffs Unconstitutional," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

Todd Neeley

Todd Neeley
Connect with Todd: