LMA Amends Beef Checkoff Complaint

August 8, 2001

Livestock Marketing Association, eight individual cattle producers and the Western Organization of Resource Councils have filed an amended complaint in South Dakota Federal District Court asking the court to declare that the beef checkoff violates cattle producers' First Amendment rights to freedom of speech and association. LMA's amended complaint was filed in response to a request by the court to address the impact of the U.S. Supreme Court's recent decision which held that a nearly identical checkoff program in the mushroom industry violated the First Amendment.

In response to the court's request, attorneys for LMA, USDA and the Cattlemen's Beef Board submitted a joint statement informing the court that "the parties are in agreement that the issue regarding the constitutionality of the beef checkoff program called into question by the Supreme Court's recent decision...needs to be resolved prior to proceeding" with LMA's request for a referendum, which had been the focus of LMA's initial complaint.

If the checkoff is held to be constitutional, LMA will ask the court to order a producer referendum. LMA and the other plaintiffs told the court that under the First Amendment, the beef checkoff may not "underwrite and sponsor speech with a certain viewpoint," funded by the checkoff, from producers, "some of whom object to the ideas being advanced."

The plaintiffs told the court they object to several elements of the advertising and promotion programs funded by the checkoff, including the generic promotion of beef, as opposed to promoting beef raised in the United States. They also object to the funding of ads promoting and supporting "generic, brand-name and/or processed beef products which may directly benefit private corporations, beef packers, and beef retailers, rather than cattle producers."

Also, the amended complaint says the checkoff violates the plaintiffs' First Amendment right to freedom of association because the National Cattlemen's Beef Association, which is a private trade association, "enjoys a virtual monopoly of the...contracts for implementing and carrying out" checkoff-funded domestic activities. The complaint also claims to identify similarities between the beef checkoff and the mushroom checkoff.

"The beef industry is identical to the mushroom industry in that beef is not marketed under detailed marketing orders...cattle producers are not bound together and required by statute to market their products according to cooperative rules," and they are free to make their own marketing decisions. "Their freedom to act independently is not constrained by any regulatory scheme and they are not part of any broader collective enterprise," the complaint says.

In fact, beef and other commodities are subject to a variety of regulations, a topic likely to be argued about extensively as litigation moves onward.

LMA President Patrick Goggins said a close review of the Supreme Court's new mushroom decision "led us to the conclusion that the beef checkoff clearly violates the free speech and free association provisions of the First Amendment. Secondly, no one can seriously argue that the cattle industry is not just as much a free market as the mushroom industry. Therefore, we had no choice but to respond to the court by requesting that it declare the checkoff unconstitutional. If the court decides not to do that, we're asking for what we've always asked for: a producer vote on a program producers have been financing for years."

Most promotion boards have pointed out that the Supreme Court's mushroom decision applied only to that commodity. Since the decision, USDA has moved forward on other checkoffs, a sign the Department shares that view.

The South Dakota federal court has already issued a preliminary injunction prohibiting the CBB from using checkoff dollars on "producer communications" aimed at promoting the checkoff itself, rather than promoting beef. In addition, the court has already held that USDA violated a federal statute, the Paperwork Reduction Act, during its attempt to validate petitions signed by cattle producers seeking a referendum on the checkoff.