United States District Court, D. Montana, Great Falls Division
RANCHERS-CATTLEMEN ACTION LEGAL FUND, UNITED STOCKGROWERS OF AMERICA, Plaintiff,
SONNY PERDUE, in his official capacity as Secretary of Agriculture; and UNITED STATES DEPARTMENT OF AGRICULTURE, Defendants.
MEMORANDUM AND ORDER
Morris United States District Court Judge.
Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of
America is political advocacy and trade organization
representing independent, domestic cattle producers across
the United States, including Montana. Plaintiff filed this
action for declaratory and injunctive relief on May 2, 2016.
Plaintiff seeks a determination that the current
administration of the federal Beef Checkoff Program in
Montana violates the First Amendment to the United States
Constitution. The Beef Checkoff Program allows the Montana
Beef Council to use a portion of a federal beef checkoff to
fund promotional campaigns by the Montana Beef Council.
United States Department of Agriculture (USDA) administers
the federal Beef Checkoff Program. Defendant Sonny Perdue
(Perdue) serves as the Secretary of Agriculture. Perdue
oversees the federal Beef Checkoff Program.
before the Court are the following motions: Defendants'
Motion to Dismiss for Lack of Standing; Defendants1 Motion to
Dismiss for Failure to State a Claim; Defendants' Motion
to Stay; Plaintiffs Motion for Summary Judgment; Plaintiffs
Motion for Preliminary Injunction; and Plaintiffs Motion for
a Temporary Restraining Order.
States Magistrate Judge John Johnston issued Findings and
Recommendations in this matter on December 12, 2016. (Doc.
44). Judge Johnston recommended that Defendants' Motions
to Dismiss be denied, that Defendants' Motion to Stay be
denied, that Plaintiffs Motion for Summary Judgment be
denied, that Plaintiffs Motion for Preliminary Injunction be
granted, and that Plaintiffs Motion for a Temporary
Restraining Order be denied as moot. (Doc. 44 at 12).
filed objections to Judge Johnston's Findings and
Recommendations on December 23, 2016. (Doc. 45). Defendants
argue that Judge Johnston erred when he denied their motions
to dismiss, and when he granted Plaintiffs motion for a
preliminary injunction. Plaintiff filed a response to the
Defendants' objections on January 5, 2017. (Doc. 46).
Court reviews de novo findings and recommendations to which
the parties make objections. 28 U.S.C. § 636(b)(1). No
review is required of proposed findings and recommendations
to which no objection has been made. Thomas v. Am,
474 U.S. 140, 149-152 (1986).
Beef Promotion and Research Act of 1985 (Beef Act), 7 U.S.C.
§ 2901 et seq., imposes a $1 assessment on
cattle producers on each head of cattle sold in the United
States, and on each head of cattle imported into the United
States, 7 U.S.C. §§ 2901(b), 2904(8)(C); 7 C.F.R.
§ 1260.172(a)(1). The assessment, also known as a
checkoff, funds beef related promotional campaigns designed
to "strengthen the beef industry's position in the
marketplace and to maintain and expand domestic and foreign
markets ... for beef and beef products. 7 U.S.C. §
"Cattlemen's Beef Promotion and Research Board"
(Beef Board) administers the federal checkoff program.
See 7 U.S.C. § 2904(1)-(2). The Secretary of
the Agriculture appoints the Beef Board. Id. The
"Beef Promotion Operating Committee" (Beef
Committee) develops national promotional campaigns for the
Beef Board. 7 U.S.C. § 2904(4)(B). The Beef Board's
promotional campaigns must comply with the Beef Act.
Beef Act prohibits the Beef Board from developing promotional
campaigns that distinguish between domestic and foreign beef
products. See 7 U.S.C. §§ 2901,
2904(4)(B)(ii); 7 C.F.R. § 1260.169(d). The Secretary of
the Agriculture must approve the Beef Board's promotional
campaigns. 7 C.F.R. § 1260.169; Johanns v.
LivestockMktg. Ass 'n, 544 U.S. 550, 561 (2005).
Beef Act allows "qualified state beef councils" to
collect the checkoff assessments on behalf of the Beef Board.
7 C.F.R. § 1260.18 l(b)(2)-(4). Qualified state beef
councils are private entities organized and operated within a
state. 7 C.F.R. § 1260.181(a). The Montana Beef Council
operates as Montana's qualified state beef council. The
Montana Beef Council is a private corporation organized under
the laws of Montana. (Doc. 23 at ¶ 47).
Montana Beef Council collects beef checkoff assessments in
Montana. When the Montana Beef Council collects the $1
per-head checkoff from a cattle producer it sends 50 cents
from each dollar to the Beef Board. The Montana Beef Council
retains the remaining 50 cents to fund its own promotional
activities. (See Doc. 1-2 at 6; 7 U.S.C. §
2904(8)(C); 7 C.F.R. § 1260.172(a)(3).
USDA possesses some authority over the Montana Beef Council.
The USDA requires that the Montana Beef Council engage in
promotional activities that promote beef and beef products.
The USDA also requires that the Montana Beef Council certify
that it will not use any of the money that it receives under
the Beef Checkoff Program to promote "unfair or
deceptive" practices, or to "influenc[e]
governmental policy." See 7 C.F.R. §
1260.181(b)(7) (cross-referencing 7 C.F.R. §
1260.169(e)); see also, Beef Promotion and Research
Order, 51 Fed. Reg. 26132, 26137 (July 18, 1986).
USDA does not control how the Montana Beef Council spends the
money that it obtains from the federal Beef Checkoff Program.
(See Doc. 1-2 at 7). The Montana Beef Council
determines for itself how the checkoff money that it receives
should be invested. (See Doc. 1-2 at 13). The
Montana Beef Council uses the checkoff monies that it
receives to fund advertising campaigns that promote the
consumption of beef. The USDA requires only that the Montana
Beef Council submit annual reports of its expenditures.
See 7 C.F.R. § 1260.181(b)(6).
Montana Beef Council's board possesses broad discretion
to determine the content of its promotional activities. The
advertisements of the Montana Beef Council do not distinguish
between domestic beef and foreign beef. The USDA does not
supervise the Montana Beef Council's promotional
campaigns. (Doc. 40-1 at ¶¶ 14-15).
Beef Board possesses limited authority with respect to the
Montana Beef Council's promotional campaigns.
Id. The Beef Board reviews the Montana Beef
Council's "annual marketing plan" that
"outlines" the Montana Beef Council's
"planned activities" for the coming year. The Beef
Board also conducts post-hoc audits of the Montana Beef
Council's activities. (Doc. 40-1 at¶ 19).
recently, no mechanism existed for a cattle producer to
direct the Montana Beef Council to send the entire checkoff
assessment to the Beef Board. Cattle producers who disagree
with the Montana Beef Council's promotional activities
now may direct that the full amount of their checkoff
assessment be forwarded to the Beef Board by submitting a
redirection request to the Montana Beef Council. See
Beef Promotion and Research; Amendments to Allow Redirection
of State Assessments to the National Program, 81 Fed. Reg,
45, 984, 45986 (proposed July 15, 2016).
Montana Beef Council has 60 days to review the redirection
request to determine whether the cattle producer has
submitted the necessary paperwork to opt-out. Id.
The Montana Beef Council holds the cattle producer's
checkoff assessment during this review period. The Montana
Beef Council must forward the full amount of the cattle
producer's checkoff assessment to the Beef Board if the
cattle producer provides the necessary paperwork.
represents domestic cattle producers in Montana. Plaintiff
disapproves of the Montana Beef Council's advertising
campaigns. Plaintiff disapproves of the advertisements'
failure to distinguish between domestic beef and foreign