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By Mike Barnett
Editor
There's avocados; beef's been hit three times. Dairy, mushrooms, cotton...anyone for California tree fruit? What do all these different commodities have in common? They've all been targets of checkoff suits in various courts.
A big test for all checkoff programs will be decided this spring or early summer as the Supreme Court rules on the legality of the beef checkoff. The timing of the case is ironic in that support for the beef checkoff program among producers is at an all-time high. The case was heard by the Supreme Court in December 2004.
Certain U.S. producers and foreign importers have challenged several national commodity checkoff programs based on alleged violations of the United States Constitution, specifically the First Amendment, or the free speech guarantee.
At issue are these words: "Congress shall make no law abridging the freedom of speech."
How can a checkoff program violate free speech?
The argument, says Will Ellerman, an attorney with Jackson-Walker law firm in Dallas, of people who are forced to pay for these assessments are saying they disagree with the message that money is being used to fund. Ellerman spoke recently at the Texas Farm Bureau Leadership Conference in Austin.
"They disagree with 'Beef, it's What's for Dinner,' or 'Cotton: The Fabric of our Lives,' or any other advertising slogan that's out there," said Ellerman, who wrote two briefs before the Supreme Court in support of the national beef checkoff.
The courts, Ellerman said, are all over the map in their rulings.
"Some of them, the constitutionality of the checkoff programs has been upheld. Some of the checkoff programs have been held unconstitutional. Particularly, with respect to beef, you can find holdings that the beef checkoff is constitutional versus holdings the beef checkoff is unconstitutional," he said.
"And even within certain courts," he continued, "the dairy checkoff was held invalid...out of the 3rd Circuit in 2004, when only a few years earlier, the same court upheld the beef checkoff as constitutional in 1989. Even though those two programs are somewhat similar, the same court looking at them came up with two entirely different results."
The heart of the argument made by checkoff challengers is they are mandated to pay assessments to fund speech they do not agree with.
On the other hand, defenses typically raised to a checkoff challenge include the following:
• A checkoff is part of a comprehensive regulatory scheme. In other words, it's not something that is geared solely toward advertising. Checkoff dollars fund a number of different things including research, promotion through advertising, public awareness, educational programs and others, that in no way implicate free speech rights.
• Checkoff dollars are spent to fund government speech.
• Checkoff dollars are used to fund what is known as commercial speech, which also ties into the government speech argument and is a defense to a first amendment challenge.
Government speech is the heart of the Supreme Court case for checkoff proponents.
"Government speech says there can be no violation of free speech when the government is the one speaking," Ellerman said. "Government speech has three elements. It has to be controlled by the government. That's an important part of the beef case and other checkoff litigation. It has to further a legitimate government goal, which we certainly believe exists in the context of checkoff programs. And it has to concern an issue of national importance."
The Supreme Court case stems from a 2003 case brought to the 8th Circuit Court of Appeals by the Livestock Marketing Association.
The 8th Circuit Court ruled that beef commercials, the "Beef, It's What's for Dinner" campaign and all the advertising related to it, were unconstitutional. Also, of significance, the 8th Circuit held the government speech doctrine did not protect the beef advertisements at issue.
USDA and other parties filed a petition to the Supreme Court, and thus the case was heard.
When USDA appealed, an effort was started by the Texas Farm Bureau and joined by the Texas Cattle Feeders Association and the Texas and Southwestern Cattle Raisers Association to offer support in the form of a briefing to the court to uphold the checkoff.
"It snowballed from there," Ellerman said. "By the time we filed the full briefs on the merits, we had 113 groups from across the country involved in this brief. We had groups representing emus, mushrooms, sheep, soybeans, watermelons, you name it. And the goal of this was to provide sort of a united front of American agriculture in support of not only the beef checkoff, but all similar programs that might be affected by an adverse ruling by the Supreme Court."
So what's going to happen?
"Nobody knows," Ellerman said. "It's a very divided court in a number of ways. I expect them to be divided. The fact that the court has even heard this case is significant."
Ellerman says a ruling—expected this spring or early summer—will apply positively or negatively to the beef checkoff only. But a number of judges in other checkoff cases are waiting to see what the Supreme Court does before rendering decisions.
"What those courts will do at that time, they'll take the opinion of the beef case and apply it to those cases and come to a result," Ellerman said. "I expect they'll apply it similarly to how the Supreme Court approaches it's opinion in the beef case."
Texas beef producers do have an option if the Supreme Court finds the beef checkoff program unconstitutional.
The Texas legislature has passed a law providing the opportunity to establish a state beef checkoff program. Gov. Rick Perry signed the bill.
Under the Texas legislation, if the national beef checkoff program is suspended, the Texas Beef Council could petition the agriculture commissioner to implement a referendum among individuals who, during the previous 12 months, had paid into the checkoff program. Public notice would be required 60 days prior to an election.
Beef producers would have an up or down vote on approving the program. It would be simple majority and would be based on "one man, one vote" rules. The program would be mandatory. However, unlike the national beef checkoff, the Texas program would have a refund provision.
Under the legislation, the Texas Beef Council would run the program's research, marketing and educational aspects in-state.
