In the first lawsuit of its kind, USDA has brought formal charges against Steve and Jeanne Charter, Shepherd, MT, for failure to pay the federally-mandated $1/head beef checkoff.
The government has proposed an $8,500 civil penalty, in addition to a requirement to pay $250 in actual checkoff assessments and $25.77 in late charges to the Montana Beef Council for two cattle sales: one involving 247 yearlings sold in October l997 and the other for three cull cows sold in April 1998.
On September 30, a lawyer for the Charters' filed a legal defense and request for an oral hearing with the Hearing Clerk of USDA's Office of Administrative Law Judges in Washington, D.C.
The Charters are pursing an open hearing to question USDA's authority in approving the 1996 checkoff reorganization. Their hearing request may mean they could receive the maximum civil penalty of $5,500 for each of the two sales or $11,000 total. This would be the first such lawsuit concerning the National Cattlemen's Beef Association (NCBA) checkoff merger.
The Charters' penalty could be reduced to $5,000 if they waive their right to an administrative hearing.
"An $11,000 penalty is a steep price to pay to get a hearing, especially given the state of the cattle market, but it will certainly be worth it if we can get things set right," the Charters said in a press statement.
"We don't really blame USDA for seeking to make an example of us in hopes of discouraging others from checkoff protests and maintaining orderly collection. We do blame them for taking an improper role as 'kingmaker' for NCBA and are convinced they exceeded their legal authority in approving the l996 checkoff merger plan," the statement went on to say.
Beef Board's Role "CBB (Cattlemen's Beef Board), the Montana Beef Council and USDA were unsuccessful in repeated attempts to encourage Gerald Murnion and Jeanne and Steve Charter to voluntarily comply with the Act," says Alysia Smith, manager of collections and compliance for the Cattlemen's Beef Promotion And Research Board. "After these efforts failed, we had no other choice than to take this legal action. Anything less would be unfair to producers who do pay."
The national beef checkoff is administered by the Cattlemen's Beef Board, a separate entity made up of 111 board members - 104 of them producers - appointed by the Secretary of Agriculture. CBB oversees the collection of the checkoff, certifies state beef councils, implements the provisions of the federal order establishing the checkoff and evaluates the effectiveness of checkoff programs. Funds can only be spent for promotion, research and information programs designed to increase demand for beef and veal.
"One of the features producers like most about the beef checkoff is that it is fair - everyone pays, no one gets a free ride," Smith points out. "The national checkoff replaced old state-by-state checkoff plans where a few cattlemen paid for promotion and information programs that benefited everyone."