To many people, the optimism by some cattlemen that the checkoff will ultimately prevail in the U.S. Supreme Court has always seemed a little surprising considering the Court's mushroom case decision, which struck down the advertising portion of the mushroom checkoff. The following summary of the explanation provided by Monte Reese, the chief operating officer of the Cattlemen's Beef Board (CBB), does a great job of characterizing that optimism, however.

The ruling will hinge on the concept of government speech. This actually was not argued in the mushroom case in the lower court cases and, as a result, wasn't considered by the U.S. Supreme Court in that case. But when the court declared the advertising portion of the checkoff unconstitutional, they seemingly invited this argument to be made.

The original Livestock Marketing Association (LMA) case in South Dakota found the checkoff to be unconstitutional on these grounds. But, the second case in Montana, which used the exact same transcript or case record of the South Dakota case, ruled in favor of the checkoff on these grounds.

Three questions

It seems the government speech argument will rest on three questions:

  • Was the entity created by statute?

  • Does the government appoint, or control the appointment of, the majority of the governing body?

  • Does the speech serve a compelling government or national interest?

There's no doubt the answer to the first question comes down in favor of the checkoff.

Regarding the second question, the U.S. Secretary of Agriculture appoints 100% of the beef producers who sit on the CBB. So this item also doesn't appear to be a major stumbling block for retention of the checkoff, although part of this criterion also rests on the degree to which the industry is regulated by government.

On the third question, a strong case can be made that checkoff speech does serve a compelling government or national interest. After all, the beef industry is the largest segment (in gross receipts) in an industry (agriculture) that is the nation's largest. In terms of economic importance and national security, cattle and agriculture are thereby of important national interest.

It is this summation regarding these three basic questions that serves as the foundation for the optimism by cattlemen that the beef checkoff will prevail.

What if?

But what if the checkoff doesn't survive? Currently, 113 state and three national organizations have filed friend of the court briefs in support of the beef checkoff. So have 34 state attorneys general, and the chairmen and ranking members of both the House and Senate agriculture committees.

The Court could go in several directions in declaring the checkoff constitutional. The result could put the beef industry right back in court where LMA would likely push its original suit, which sought to force a producer referendum on the checkoff.

But, the Supreme Court could declare the checkoff unconstitutional, in which case the assets of the CBB would be liquidated, and the states would begin to attempt to continue the work they do on a voluntary basis. Or, the Court could rule similar to its decision in the mushroom case where it upheld certain parts of the checkoff but limited the purposes that checkoff dollars could be used for (e.g., research and product development, but not advertising or promotion).

Troy Marshall is a Colorado rancher, contributing editor to BEEF magazine's e-newsletter, BEEF Cow-Calf Weekly, and publisher of Seedstock Digest.