The USDA unlawfully approved spending $3 million a year of pork farmers’ money on a defunct promotional campaign, according to a federal judge.
Farmers pay a “checkoff” fee of 40 cents for every $100 worth of pigs sold in the U.S. to raise money for a pork industry research and promotion program, which is overseen by USDA.
U.S. District Judge Amy Berman said the agency approved payments for several discontinued “Pork The Other White Meat” trademarks based on a “completely arbitrary” assessment of their value.
For that reason, the USDA must stop the National Pork Board, which administers checkoff dollars, from making any further payments for the trademarks, which were largely abandoned about seven years ago, the judge said.
The valuation of $113 million to $132 million was based on the cost of replacing the “Other White Meat” trademarks, which doesn’t make sense because the old campaign had already been shelved and millions of checkoff dollars had been spent on a new slogan, “Pork Be Inspired,” according to the judge.
“In effect, the board is incurring the expense of replacing the trademarks for a second time,” Berman said.
Trademarks for “Pork The Other White Meat” are owned by the National Pork Producers Council, a trade association that lobbies to influence government policy.
The National Pork Board licensed the trademarks from NPPC for a fee that ranged from $1 to $818,000 a year before buying them in 2006 for $34.6 million. With interest costs, the total purchase amount came to $60 million, which the board agreed to pay off over 20 years.
The Humane Society of the United States, an animal rights group, filed a lawsuit opposing the deal along with a hog farmer and a community organization from Iowa.
Litigation over the deal prompted USDA to re-evaluate the purchase in 2016, but the agency decided to continue with the purchase process.
According to the plaintiffs, the sale agreement was actually intended to fund nearly one-third of NPPC’s budget and “evade federal restrictions against the use of pork checkoff dollars for purposes of influencing legislation and government policy.”
The National Pork Board agreed to pay $60 million even though it was in a strong position to negotiate favorable terms, since no other entity was competing to buy the trademarks from NPPC, the complaint said.
Roughly half a billion checkoff dollars had been spent by the National Pork Board to promote the “Other White Meat” slogan, which wasn’t accounted for in the sale price, the plaintiffs alleged.
Despite these arguments, the judge has rejected the plaintiff’s claim that the trademark deal violated a federal prohibition on using checkoff dollars for political lobbying.
While some of the money derived from the sale likely went toward lobbying, the funds weren’t directly steered toward influencing legislation, the ruling said.
Purchasing promotional trademarks was a legitimate expense for the National Pork Board, even if the seller was a lobbying organization, according to the judge.
Even so, the sale agreement violated administrative law because the trademark appraisal process was “quite disconnected” from the goal of determining their current value, Berman said.
USDA’s approval of continued payments was “unmoored from the facts and circumstances before the agency,” since the trademarks were “declared to be obsolete, and they have been retired from active use. So their value is minimal, or at best, undetermined,” she said.
The “Other White Meat” campaign stopped being actively promoted in 2011, after which the National Pork Board began spending about $26 million a year on the “Pork Be Inspired” campaign.
While the appraisal did acknowledge the discontinuation reduced the value of “The Other White Meat” trademarks, estimates of this decline were “not based on any research or factual analysis,” the judge said.
The NPPC characterized the lawsuit as “frivolous” litigation pursued by an “anti-meat activist group” that aims to damage the U.S. livestock industry.
The organization is evaluating its options regarding the “disappointing” ruling, NPPC said in a statement. “Regardless of the final outcome in this case, we are well positioned to continue fighting for the livelihood of farmers and others in rural America.”
The Humane Society of the United States cheered the ruling, which “halts an abusive misuse of millions of dollars of federal funds that was harmful to animals and responsible family farmers alike.”