Supreme Court Hears Checkoff Case

The U.S. Supreme Court heard oral arguments in a case challenging the constitutionality of the national Beef Checkoff Program today.

The U.S. Department of Justice represented USDA and the Cattlemen's Beef Board in the case, Veneman vs. Livestock Marketing Association. Both sides are confident they will win.

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 addition to USDA and the Cattlemen's Beef Board, defendants include the Nebraska Cattlemen, leading a group of producers as interveners in the case.

"It's been a long road to the Supreme Court," Beef Board Chief Operating Officer Monte Reese says 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."

A final ruling could come down anytime between now and the end of June 2005, says Beef Board Chairman Nelson Curry.

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 this weekend 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 us, Robinson told the annual meeting of the Nebraska Farmers Union, 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 says. 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."

Robinson explains, "some of these so-called voluntary programs can keep your money from three to six months, using the interest to further enhance the coffers of the major livestock organizations."