Summary of a Recent
Judicial Development in
Checkoff Decisions

Eighth Circuit Rules Beef
Checkoff Unconstitutional

Harrison M. Pittman
Staff Attorney

Summary of Decision

In Livestock Marketing Ass'n v. U.S. Dep't of Agriculture, 335 F.3d 711 (8th Cir. 2003), the United States Court of Appeals for the Eighth Circuit has ruled that the beef checkoff program, comprised of the Beef Promotion and Research Act and its implementing regulations, is unconstitutional.

Background

Pursuant to the beef checkoff program, beef producers and importers were required to pay mandatory assessments for each transaction. See id. at 713. The funds generated from the mandatory assessments were used for promoting and advertising beef and beef products, conducting research, and providing consumer and industry information. See id. at 713-14. Plaintiffs Livestock Marketing Association (LMA) and several other associations and individuals brought an action challenging the constitutionality of the beef checkoff program, arguing that the generic advertising conducted pursuant to the program violated their rights to freedom of speech and freedom of association under the First Amendment. See id. at 715. The United States District Court for the District of South Dakota held that the beef checkoff program was unconstitutional "in violation of the First Amendment because it requires plaintiffs to pay, in part, for speech to which the plaintiffs object." Id. Defendants United States Department of Agriculture (USDA), the USDA Secretary, Cattlemen's Beef Promotion and Research Board, Nebraska Cattlemen, Inc., and several individuals appealed the district court's decision to the Eighth Circuit. See id. at 717.

Arguments

The defendants argued that the plaintiffs' First Amendment claim was barred because the advertising conducted pursuant to the beef checkoff program was government speech and therefore immune from First Amendment scrutiny. See id. The defendants also argued that even if the Beef Promotion and Research Act "is not immune from First Amendment scrutiny under the government speech doctrine, it nevertheless survives First Amendment scrutiny as regulation of commercial speech" in accordance with the test set forth in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557 (1980). See id.

Analysis and Holdings

In addressing the defendants' first argument, the court explained that although the government may be entitled under the "government speech doctrine" to engage in its own speech without implicating the First Amendment, the doctrine does not provide immunity for all types of First Amendment claims. See id. at 718, 720 (citations omitted). The court also explained that "when the government speaks in its role as government, it may be immune from First Amendment challenge based upon its choice of content." Id. at 720 (citation omitted). The court stated, however, that the plaintiffs were not challenging the content of the beef checkoff program, but rather "their First Amendment free speech and free association rights to protect themselves from being compelled to pay for that speech, with which they disagree." Id. at 721. The court thus concluded that because the plaintiffs' claim predominantly raised a free speech issue, its analysis was governed primarily by the Supreme Court's compelled speech cases, rather than the Supreme Court's government speech cases upon which the defendants had relied. Id. (citations omitted).

Recognizing that in its compelled speech cases the Supreme Court has ordinarily applied a balancing-of-interests test to determine whether a challenged governmental action was justified, the court stated that it had to determine what constitutional standard applies when compelled subsidies are used to fund generic commercial advertising. See id. The court stated that "[o]n this question, . . . the [defendants] have consistently argued that, even if the . . . [beef checkoff program] is not immune from First Amendment scrutiny under the government speech doctrine, it nevertheless survives First Amendment scrutiny as regulation of commercial speech under the Central Hudson standard." Id.

In Central Hudson the Supreme Court stated that

[a]t the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.

Id.

The court held that pursuant to the compelled speech cases, the plaintiffs have a protected First Amendment interest and that the only remaining issue is whether the governmental interest in the commercial advertising under the beef checkoff program is "sufficiently substantial to justify the infringement upon . . . [plaintiffs'] First Amendment right not to be compelled to subsidize that commercial speech." Id. at 723.

Recognizing that it is duty-bound to reconcile and apply the precedents of the Supreme Court to the best of its ability, the court held that the beef checkoff program is, "in all material respects, identical to the mushroom checkoff program" at issue in United States v. United Foods, Inc., 533 U.S. 405 (2001). Id. at 725. It therefore concluded that

the government's interest in protecting the welfare of the beef industry by compelling all beef producers and importers to pay for generic beef advertising is not sufficiently substantial to justify the infringement on . . . [plaintiffs'] First Amendment free speech right. Accordingly, the district court did not err in holding that the . . . [beef checkoff program] are unconstitutional and unenforceable.

Id. at 725-26.

The case was decided on July 8, 2003; this summary was posted Jan. 27, 2004.