Ranchers’ Flap Over Beef Ad Tax Hits Ninth Circuit

PORTLAND, Ore. (CN) – Lawyers for the federal government and a Montana beef growers association argued Monday over the constitutionality of requiring ranchers to pay for the advertising campaign behind the slogan “Beef: It’s What’s for Dinner.”

The Ranchers-Cattleman Action Legal Fund, United Stockgrowers of America, a political advocacy and trade organization representing independent cattle producers in the United States, sued the U.S. Department of Agriculture and its secretary in Montana federal court in May 2016.

According to the group, the government forced cattlemen in Montana to fund the federal “Beef Checkoff” program. The national media campaign promotes the beef industry, but the Montana association says it fails to highlight crucial distinctions in the beef market that would entice customers to buy Montana beef, or domestic beef at all, over meat from the 41 other countries that compete in the U.S. market.

The organization claimed it was unconstitutional to force ranchers to pay for advertising that goes against its own interests and demanded and injunction stopping the USDA from collecting $1 per head of cattle and directing half that amount to the Montana Beef Council, which runs the Beef Checkoff program.

And they got it.

In June, U.S. District Judge Brian Morris refused to dismiss the case, and issued a preliminary injunction prohibiting the government from letting the Montana Beef Council use ranchers’ money to fund ads under Beef Checkoff Program except from ranchers who specifically directed that their money be used for that purpose.

The government appealed, claiming that ranchers could opt out of funding the program and that the program was government speech, and therefore exempt from the First Amendment.

On Monday, Nicholas Riley argued for Agriculture Secretary Sonny Perdue and the USDA that Morris had erred in finding the Constitution requires the government to get ranchers to intentionally opt in to the program, rather than simply allowing them the opportunity to opt out.

The payments were not compulsory because ranchers who don’t want to fund the national ad campaign can instead “redirect” their full $1 per head to the USDA, Riley told Ninth Circuit Judges N. Randy Smith and Andrew D. Hurwitz and U.S. District Judge Gonzalo P. Curiel at the hearing in Portland’s Pioneer Courthouse. Curiel sat on the panel by designation from the Southern District of California.

And Riley said Morris’ finding that Montana Beef Council was effectively a private entity conducting private speech was wrong. He said the government controlled the campaign via the ability to remove the council’s board if it didn’t like its message.

That last argument may be a difficult row to hoe: the government-speech doctrine says that when the government is speaking, it cannot violate the First Amendment. But as the U.S. Supreme Court found in the recent First Amendment case Tam v. Matal, the government-speech doctrine “is susceptible to dangerous misuse. If private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.”

And that’s just what’s happening in this case, according to David Muraskin with Public Justice in Washington, who argued on behalf of the cattlemen’s association.

Muraskin told the judges that the Montana Beef Council was set up to be an independent, industry-run association that determines on its own what the content of its advertising campaigns will be.

According to Muraskin, public comments on the federal Beef Promotion and Research Act said the government should audit state councils like the Montana Beef Council more, that it should review council statements and tell them what they should be able to say in advertising campaigns. The government declined to take that approach in favor of promoting the independence of state beef councils.

“And that’s where you get into problems with the government-speech doctrine,” Muraskin told the panel. “How could it possibly be government speech when the government is disclaiming any form of control?”

The judges did not indicate when they will rule.

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