Ninth Circuit Favors USDA in Government-Funded Beef Advertising Lawsuit

The Ninth Circuit ruled in an opinion docketed on Tuesday in favor of the U.S. Department of Agriculture in a lawsuit filed by ranchers through the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF). This decision affirmed the District of Montana’s ruling that beef promotional materials, although generated by a third party, were government speech and so it did not meet the First Amendment challenges brought against it. 

The plaintiffs filed the legal action to challenge “certain mandatory assessments on cattle sales imposed by federal law that are used to fund advertisements for beef products,” the opinion explained. Under the 1985 Beef Promotion and Research Act, $1 from every head of cattle sold is taken for research and advertising. Typically half of the funds are given to state beef councils and half is used for federal marketing, although producers can opt out of funding the state qualified beef councils instead sending the whole amount to the federal programs. Some state beef councils intervened in the lawsuit in favor of the USDA. 

R-CALF’s members reportedly objected to advertising campaigns from their qualified state beef councils, and challenged the program claiming it was “an unconstitutional compelled subsidy of private speech.” The District of Montana ruled that the plaintiffs had standing, however, they also determined that the Secretary had enough control over the program that the speech is considered government speech. 

Judge Andrew Hurwitz issued the Ninth Circuit opinion in the matter, which was also heard by Judges Kim McLane Wardlaw and Richard C. Tallman. The opinion said that the panel denied an permanent injunction which would require memoranda of understanding which granted USDA Secretary pre-approval authority over the state beef councils, ruling in line with the district court. They cited that the government in this instance has the authority to control the messages sent through the state councils, even if it does not choose to exercise pre-approval authority. 

The parties argued that since under the memoranda of understanding the USDA approved all contracts entered into by state councils that the promotional materials produced would be government speech. R-CALF, however, disputed whether speech from third parties hired by the state councils through “checkoff funds” rather than through contracts which are not approved are considered government speech.  

In the opinion, the judges determined that “third-party speech not subject to pre-approval is also ‘effectively controlled’ by the government.  Congress expressly contemplated the participation of third parties in the beef checkoff program, designating several ‘established national nonprofit industry-governed organizations’ with whom the Operating Committee could contract to ‘implement programs of promotion.’” 

R-CALF, according to the opinion, uses about 60 percent of its funds to educate beef producers about the checkoff funds and how they are used by the state beef councils. Because of this, it reportedly devoted significant effort into the lawsuit. 

The plaintiff is represented by Butler Farm & Ranch Law Group, Public Justice, and Rossbach Law.  The defendant is represented by the U.S. Department of Justice. State beef council intervenors are represented by Bryan Cave Leighton Paisner and Boone Karlberg