Johanns, Mike (Agriculture Secy.) v. Livestock Marketing Association, et al. / Nebraska Cattlemen, In (05/23/2005)

Question presented: Whether the Beef Promotion and Research Act of 1985 (Beef Act), 7 U.S.C. 2901 et seq., and the implementing Beef Promotion and Research Order (Beef Order), 7 C.F.R. Part 1260, violate the 1st Amendment insofar as they require cattle producers to pay assessments to fund generic advertising with which they disagree?BY ALICE CHANG & TONY TAGLIAVIA, MEDILL NEWS SERVICE

In 1985, a new federal law, the Beef Promotion and Research Act, created the beef checkoff program which required all cattle producers to pay $1 per cattle sold.

The money went to a national advertising and market research fund.

Over time, many cattle producers became disgruntled because the generic advertising slogans, like "Beef: It’s What’s For Dinner," did not differentiate between American and imported meat, which was generally cheaper.

"They see themselves as essentially being forced to subsidize their competition and their own economic demise," said Ron Parsons, an attorney for the Livestock Marketing Association, which represents about 700 livestock markets.

The checkoff program, which collects about $80 million annually, collected $8.7 million in 2001 from sales of imported beef.

In 1999, about 140,000 cattle producers petitioned the U.S. Department of Agriculture (USDA) for a referendum on whether to continue the program.

The USDA did not respond until more than a year later, when it said there were not enough valid petitions to hold a referendum.

In 2000, the Livestock Marketing Association, the Western Organization of Resource Councils and six individuals filed suit against the USDA over the department’s inaction in the U.S. District Court of South Dakota, the state with the highest number of petitioners for the referendum.

The Nebraska Cattlemen, Inc., which represents 5,000 cattle producers, petitioned to intervene.

Meanwhile, in 2001, the U.S. Supreme Court ruled in U.S. v. United Foods that a similar checkoff program for mushrooms was unconstitutional.

"By requiring contributions which contributors don’t agree to, the Court said that it is compelled speech that violates the 1st Amendment," said Philip Olsson, an attorney for the Livestock Marketing Association.

After the mushroom checkoff decision, the plaintiffs in the beef case amended their complaint to incorporate free speech claims.

But defendants argued the beef checkoff was "government speech" and thus immune from 1st Amendment protection.

The Supreme Court has not specifically defined "government speech," but has established a doctrine through a series of cases.

"Compelled support of a private association is fundamentally different from compelled support of government," wrote Justice Potter Stewart in 1977 in Abood v. Detroit Board of Education. "Clearly, a local school board does not need to demonstrate a compelling state interest every time it spends a taxpayer’s money in ways the taxpayer finds abhorrent. But the reason for permitting the government to compel the payment of taxes and to spend money on controversial projects is that the government is representative of the people. The same cannot be said of a union, which is representative only of one segment of the population, with certain common interests."

In June 2002, the district court ruled against the beef checkoff program.

U.S. District Judge Kornmann wrote that the beef checkoff was, in all material respects, identical to the mushroom checkoff.

He also decided that the program was not government speech.

"Common sense tells us that the government is not ‘speaking’ in encouraging consumers to eat beef," Kornmann wrote. "After all, is the ‘government message’ therefore that consumers should eat no other product or at least reduce the consumption of other products such as pork, chicken, fish, or soy meal? The answer is obvious."

The USDA appealed, again arguing that the advertising was "government speech." It maintained that a federal law had created and defined the powers of the Beef Board and Beef Committee, which administers the checkoff program.

In July, 2003, the 8thCircuit Court of Appeals unanimously affirmed, again following the mushroom checkoff case.

"We consider the substantiality of the government’s interest to be highly doubtful," wrote Judge Theodore McMillian.

The USDA appealed the case -- this time to the Supreme Court – again on the grounds of "government speech." Nebraska Cattlemen, Inc. also petitioned.

"The generic advertising of beef under that program serves public purposes identified by Congress, is confined to a message specified by Congress, and is disseminated by a governmental entity that was created by Congress and is subject of the supervision of the Secretary," wrote the USDA in its petition for a writ of certiorari.

On March 24, 2004, the Court accepted review in both cases, consolidated them for review and limited review to the question noted above.

There are about 20 agricultural checkoff programs in the U.S., ranging from grapes to milk. The 12 largest programs spend more than $700 million each year.

"Agricultural producers believe they should not be compelled to support a program with which they disagree," Olsson said. "Ultimately, that principle is pretty important to every one of us… We don’t want the government to compel in private, personal and business affairs anymore than is absolutely necessary.

In arguments before the Court on Dec. 8, 2004, lawyers for the USDA contended that, because the text of the advertisements must be approved by the department, they were indeed "government speech."

The cattlemen are simply paying to support a government message, Deputy Solicitor General Edwin Kneedler said. They are not being forced to send out their own message about eating beef, he argued.

That contention was immediately challenged by Justices Antonin Scalia and David Souter. Justice Stephen Breyer similarly questioned whether the program was indeed government speech.

"If you say, you know, 'America's cattlemen are speaking,' is it government speech?" Scalia asked. Justice Ruth Bader Ginsburg joined in questioning the reality of the "government speech claim," adding that if it were truly government speech, it's likely that the government would caution people not to eat too much beef.

That concept resurfaced in the exchange with counsel for the cattlemen.

Laurence Tribe, a Harvard Law School professor representing the industry, argued that, much as the government mandates warnings from cigarette manufacturers, the USDA could step in and require cattlemen to pay for an ad that cautioned Americans not to eat too much beef as Ginsburg suggested. That, he said, falls under the obligations of the department to protect citizens.

But what the government cannot and must not do, Tribe argued, is operate a system in which the government says, "'You've got to put money into this elaborate structure, which purports to represent you.'" Tribe said that's exactly what the beef checkoff program is and, he said, it is fundamentally unconstitutional. He reiterated arguments made in lower courts, namely, that the beef checkoff program did little to promote American beef.

Justice Anthony Kennedy offered possible compromise solutions. Kennedy first suggested that the government simply rework the program to convey the idea that the "Beef: It's What's for Dinner" messages are coming from the government, paid for by cattlemen. Tribe argued that such a solution only solves one of the many problems with the government program. The program would still amount to compelled speech in violation of the 1st Amendment, Tribe said.

Kennedy later suggested that it might be more appropriate for the government to use general funds to promote the beef industry, or more specifically, enact a specific tax on cattlemen to pay for the ads—something slightly different from the assessment currently imposed. The excise tax would be similar to those imposed on cigarette makers. The other option, using general funds, would mean the advertisements were more closely tied to the government, and more importantly for the ranchers, they would be paid by all Americans. That, Kennedy said, might quell some of ranchers' concerns about being misrepresented.

Kneedler said that the government would make those changes if the court required. Tribe conceded that such a change would address some of his arguments against the program.

Kneedler insisted that the Court could step in and call for changes to the statute, like those proposed by Kennedy, rather than striking it down in its entirety. But even that concept was challenged by Tribe.

"The Court doesn't have before it the possibility of rewriting all this," Tribe said.

On May 23, 2005, the Court held 6-3 that because the beef checkoff funds the government’s own speech, it is not susceptible to a 1st Amendment compelled-subsidy challenge.

In writing for the majority, Justice Antonin Scalia rejected the argument that the speech here is not government speech because it is controlled by nongovernmental entities, such as the Beef Board and Operating Committee.

Justices Anthony Kennedy, David Souter and John Paul Stevens dissented.