By: Harrison M. Pittman, Director, National Agricultural Law Center

On May 2, 2016, a legal action titled Ranchers Cattlemen Legal Defense Fund, United Stockgrowers of America (R-CALF) v. United States Department of Agriculture was filed in Montana federal district court. This lawsuit challenges the constitutionality of a key aspect of the national beef research and promotion program established by the Beef Promotion and Research Act of 1985 (Beef Act). The plaintiff asserts that the portion of the federally-mandated one-dollar-per-head of cattle assessment that is retained by the Montana Beef Council constitutes a “government-compelled subsidy of the speech of a private entity” which is unconstitutional under the First Amendment of the United States Constitution. R-CALF raises legal issues that could significantly impact the beef and soybean research and promotion programs, specifically including a loss of state sovereignty in the operation and administration of state beef councils and soybean boards throughout the United States. The issues raised by the litigants in R-CALF warrant careful consideration by any person, entity, or institution that pays, collects, remits, expends, administers, or is otherwise impacted by the national beef and soybean research and promotion programs. These issues are discussed in this article.

Specifically, this article addresses a proposed rule issued by the United States Department of Agriculture Agricultural Marketing Service (AMS) on July 15, 2016 titled, Soybean Promotion, Research, and Consumer Information; Beef Promotion and Research; Amendments to Allow Redirection of State Assessments to the National Program; Technical Amendments. The Proposed Redirection Rule is a key part of the defense raised by USDA to R-CALF. The article also addresses the historically and legally significant Memorandum of Understanding recently entered into between the Montana Beef Council and AMS that provides AMS direct oversight of the council and binds all third parties who contract with the council. The MOU was also entered into as a defense to the R-CALF argument that the Montana Beef Council is a private entity because it lacks sufficient federal oversight.6 Before addressing those issues, the article discusses the legal arguments presented in R-CALF by the plaintiff and USDA and how those arguments signal a loss of sovereignty for qualified state beef councils (QSBCs) and qualified state soybean boards (QSSBs) across the United States.

This article continues here.

To learn more about these and other checkoff issues tune in this Wednesday, February 15, for a webinar titled, Checkup on Checkoffs:  Recent & Emerging Legal Issues in State & Federal Checkoff Programs.