Richard McDonald, Texas Cattle Feeders Association (TCFA) president and CEO, says his constituents certainly don't feel the industry has lost the national beef checkoff.
“People forget the checkoff's constitutionality has been presented to the U.S. Supreme Court twice before and they refused to even consider it,” he says.
But, where judges and lawyers are concerned, history proves most anything is possible. Consequently, states like Texas are taking steps to ensure they have legislation in place to enact a state program as a stopgap should the court ultimately rule the current national program unconstitutional.
In late September, the Texas Beef Council (TBC) succeeded in getting the Texas Senate to pass legislation making it possible for TBC to petition the Texas commissioner of agriculture for a state referendum calling for a state checkoff. Insiders expect the bill to pass the Texas House, as well.
“All the organizations represented by TBC agree a state program would be established only if the national program is struck down,” McDonald says. “We must not lose sight of maintaining a coordinated national program.”
After all, it was a conglomeration of state programs that preceded the national program enacted in 1987. Each state collected its own checkoff fees and spent the money however it saw fit. Such a system duplicated efforts, and hindered the industry's ability to speak with one voice.
“I think it's prudent for states without these mechanisms in place to begin taking steps now,” says Monte Reese, chief operating officer of the Cattlemen's Beef Board (CBB), which administers the national checkoff. He says almost half the nation's 45 state beef councils have the legal mechanics in place to implement such checkoffs.
The fate of the current checkoff resides in two Circuit Courts. In the 8th Circuit, the appellate court upheld a ruling that it was unconstitutional. The Department of Justice then asked for a full court review. There's no indication yet whether they will.
In the 9th Circuit, where both plaintiffs and defendants agreed to use the same trial record used in 8th Circuit proceedings, the judge ruled the checkoff constitutional. Plaintiffs have appealed the ruling.
“They represent totally opposite decisions from the same trial record,” Reese says. “I'm confident, if it goes that far, that the Supreme Court will consider it (unlike the two previous times McDonald cites).”
The matter could be resolved by next summer. But, Reese says a final resolution may not come until summer 2005.
But, Reese believes the Supreme Court needs to weigh in on the matter. Of 15 commodities with national checkoff programs, eight are currently under court challenge on constitutionality grounds. And, legal challenges of state checkoffs for some commodities have grown into a cottage industry in some states.
“It needs to be decided whether producers have the right to band together and ask Congress for legislation mandating an assessment for the purposes of building demand for a commodity,” Reese says. “We expect to prevail in the end, but it may take a Supreme Court order to do that.”