A preliminary injunction that prevents the Montana Beef Council from spending beef checkoff dollars on advertising will remain effective under a federal appeals court ruling.
The 9th U.S. Circuit Court of Appeals has rejected a request by USDA to overturn the injunction, which was imposed last year by U.S. District Judge Brian Morris.
Ranchers pay $1 per head to the USDA when selling cattle. The agency oversees the national beef checkoff program to fund promotions and research, but half that money goes to state beef councils.
Morris ruled that the Montana Beef Council is a private corporation whose speech can’t be subsidized with public dollars collected from ranchers.
A lawsuit challenging the constitutionality of the Montana Beef Council’s spending of checkoff dollars was filed by the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America.
R-CALF hopes the case will ultimately prohibit beef checkoff dollars from funding other state beef councils, with the aim of cutting off money to the Federation division of the National Cattlemen’s Beef Association.
The NCBA has supported federal policies that R-CALF believes harm independent cattle producers.
The 9th Circuit has now ruled the injunction against the Montana Beef Council wasn’t based on incorrect legal standards or factual findings.
Because Morris’ ruling was not an “abuse of discretion,” it should be allowed to stand, a three-judge panel of the 9th Circuit said in a 2-1 decision. Using public money for advertising by the government is constitutional because that speech can be influenced by the political process.
Unlike cases where USDA more directly spent checkoff money, however, the agency “does not appoint any members of the Montana Beef Council, does not have pre-approval authority over the MBC’s advertising, and may only decertify after an action has been taken,” the 9th Circuit said.
The 9th Circuit’s ruling was issued in an unpublished memorandum, which means it doesn’t set a precedent for other court cases.
In a dissenting opinion, Circuit Judge Andrew Hurwitz said the injunction wrongly ignored a “memorandum of understanding” between USDA and the Montana Beef Council, which made clear the federal agency has control over the private organization’s spending.
Not taking that agreement into consideration was an “abuse of discretion” by the judge, Hurwitz said.