Angus e-List Vol. 2, 77

DENVER (November 1, 2002) - A U.S. District Court judge in Montana today ruled the Beef Promotion and Research Act is constitutional, defeating an attempt to halt the national beef checkoff program.

"American beef producers should be very pleased with this decision," said Wythe Willey, president of the National Cattlemen's Beef Association and a beef producer from Cedar Rapids, Iowa. Willey said the decision by District Judge Richard Cebull strengthens the beef industry's hand in a similar case now in the Eighth Circuit Appellate Court where the constitutionality of the checkoff is being challenged.

"This is a victory for every cattleman in the U.S.," he said. "America's beef producers have prevailed because the national beef checkoff is not only constitutional, but a tremendously successful program that has helped make the industry what it is today. The industry is under severe economic pressure and we can't stop promoting beef."

The challenge to the beef checkoff's constitutionality was raised by Jeanne and Steve Charter of Shepherd, Mont., and several individual producers. The case began in 1998 as a noncompliance suit against the Charters. After the Charters lost their administrative appeals through USDA, they turned to Federal District Court to appeal.

Judge Cebull in his order directed that judgment be entered in favor of USDA, declared the Beef Promotion and Research Act constitutional, and ordered the Charters to pay past-due checkoff assessments and late fees in the amount of $417.79. Judge Cebull dismissed civil penalties levied against the Charters in the amount of $12,000.

Defendants in the case are the U.S. Department of Agriculture, the Cattlemen's Beef Promotion and Research Board, which administers the checkoff, and a group of supportive producers who have intervened on behalf of the checkoff.

Producers have demonstrated support for the $1-per-head checkoff every year since Congress launched it in 1986, said Chuck Rein, a Melville, Mont. beef producer and intervener in the suit. "In 16 years of producer attitude surveys by three different companies independent of the industry, support for the checkoff has always remained above 60 percent. The most recent survey shows a two-thirds approval rating. The vast majority of beef producers recognize the accomplishments of the checkoff, the 'Beef. It's What's For Dinner.®' promotions, and other subsequent programs that have served to boost the industry and its product."

The U.S. Department of Agriculture and Department of Justice have long supported the beef checkoff as well, Willey said. The constitutionality of the checkoff was upheld in two previous court challenges and "leaders in the beef industry are prepared to continue the defense of this important program all the way to the Supreme Court if necessary."

"We are determined to assure beef's place at the dinner table, and we call on dissenters to put aside costly legal battles and join us in focusing on the continued growth of the beef industry," Willey said. "We have a lot of work ahead of us in promoting and meeting consumer demand for beef, and will need the help of everyone who wants to see beef continue to be 'What's For Dinner.'"

Judge Says Beef Checkoff Is Constitutional

BILLINGS, MONT. (Nov. 1, 2002) - U.S. District Court Judge Richard Cebull today reaffirmed the constitutionality of the beef checkoff with his ruling in a suit brought by Steve and Jeanne Charter and various other cattle producers attempting to derail the checkoff program.

The judge's ruling declares the Beef Promotion and Research Act constitutional and notes that speech compelled by the act "constitutes support for government speech." Accordingly, the ruling directs that judgment be entered in favor of USDA, on behalf of the Cattlemen's Beef Board, and requires the Charters to remit unpaid assessments and late fees.

"Obviously, we are thrilled with Judge Cebull's decision," said Cattlemen's Beef Board Chairman Dee Lacey. "It reaffirms what other cases have concluded repeatedly through the years - that the beef checkoff is constitutional."

The District Judge in Billings, Mont. issued the ruling in favor of the defendants - the USDA and a group of producers who intervened on behalf of the checkoff, based on his review of the record in the case, as well as the transcripts in the Livestock Marketing Association's lawsuit against the checkoff. In that South Dakota suit, now under consideration by the U.S. 8th Circuit Court of Appeals in Minneapolis, LMA similarly challenged the constitutionality of the Beef Checkoff Program.

"We have remained confident in the future of the beef checkoff," Beef Board Chief Operating Officer Monte Reese said. "Surveys show that the vast majority of producers say they support their beef checkoff, and we continue to focus our time and attention on building demand for beef."

Lacey, a cow-calf producer from Paso Robles, Calif., said the ruling adds momentum to the Beef Board's efforts to increase consumer demand for beef through such informational and promotional efforts as the widely recognized "Beef. It's What's for Dinner" campaign.

The Charter case originated as a compliance issue in 1998, when Montana ranchers Steve and Jeanne Charter refused to pay the mandated $1-per-head beef checkoff on the sale of their cattle. Faced with the Charters' refusal to pay, a USDA administrative law judge enforced the checkoff and assessed a civil penalty. Upon further review by the USDA's judicial officer, at the bequest of the Charters, assessments of those penalties were upheld.

The Charters then chose to appeal their case to the Federal District Court in Billings, based on the 2001 United Foods case. Defendants in the case include the USDA and a group of producers who intervened on behalf of the checkoff.

With the declaration of the beef checkoff's constitutionality, the Beef Board's chairman says it is important that all players in the beef industry band together to improve the marketplace for their products - especially in light of recent market activity.

"It is now more critical than ever that we come together as an industry," Lacey said. "We would call on the Charters to join us in these efforts, with an eye toward increasing long-term profitability for all segments of our industry."

A link to the decision is posted on the beefboard.org Web site at the following location: http://www.beefboard.org/dsp/dsp_locationContent.cfm?locationId=1072