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JUST A MATTER OF TIME

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HAY MAKER

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2004 was another busy year in the courts concerning agricultural check-offs. On February 24, the United States Court of Appeals for the Third Circuit held the Dairy check-off (mandatory 15 cent/hundredweight of milk sold) unconstitutional on First Amendment free-speech grounds. The court determined that the Dairy Act that authorizes the check-off constituted private speech and was, therefore, subject to scrutiny under the First Amendment. The court noted that the Secretary of Agriculture, under the Dairy Act, acted only in a supervisory role and that the government described the dairy check-off as a non-governmental program financed and directed by dairy farmers. Thus, the check-off was private speech. On the free-speech issue, the court noted that the Dairy Act is a stand-alone law that was not passed as part of a scheme of greater economic regulation of the dairy industry. Dairy producers, the court noted, are not bound together and required by law to market their products according to cooperative rules for purposes other than advertising or speech. Thus, compelled funding of generic advertising is a violation of the free-speech rights of those who object to the promotion of milk as a generic product. Cochran v. Veneman, 359 F.3d 263 (3d Cir. 2004), rev'g , 252 F. Supp. 2d 126 (M.D. Pa. 2003).

On May 24, the U.S. Supreme Court (upon request by the U.S. Solicitor General) granted certiorari on a limited basis in a case from the United States Court of Appeals for the Eighth Circuit involving the constitutionality of the beef check-off. The case involves plaintiffs who were livestock producers subject to an assessment of one dollar per head of cattle to be used by the USDA and the Cattlemen's Beef Board for promotion of the beef industry, as provided by the Beef Promotion and Research Act (7 U.S.C. §2901 et seq.). The plaintiffs challenged the law as an unconstitutional violation of the First Amendment. The plaintiffs objected to the assessment because it paid for advertising beef products, such as steak, which is not the product (live cattle) that the plaintiffs sold. The trial court held that (based on prior U.S. Supreme Court precedent) the assessment violated the First Amendment. The Eighth Circuit affirmed, and also ruled that the beef check-off did not constitute government speech. Oral arguments were heard in the Supreme Court on December 8. Livestock Marketing Association v. United States Department of Agriculture, 355 F.3d 711 (8th Cir. 2003), cert. granted sub. nom., Veneman v. Livestock Marketing Assoc., 124 S. Ct. 2389 (2004).

While the beef check-off case will be the first time that the U.S. Supreme Court has addressed the free speech issue in the context of an agricultural check-off, two Circuit Courts of Appeal have dealt with the matter. The U.S Court of Appeals for the Third Circuit, in United States v. Frame, 885 F.2d 119 (3d Cir. 1989), while upholding the beef check-off as constitutional (the rationale of the court on this point is no longer valid due to a later U.S. Supreme Court opinion), rejected the USDA's argument that the beef check-off was government speech. As noted above, the Eighth Circuit has also held that the beef check-off does not constitute government speech.

For a check-off to constitute government speech, the government must exercise sufficient control over the content of the check-off to be deemed ultimately responsible for the message, the source of the check-off assessments must come from a large, non-discrete group, and the central purpose of the check-off must be identified as the government's. The beef check-off likely clears only the first hurdle. The source of funding for the beef check-off comes from a discrete identifiable source (cattle producers) rather than a large, non-discrete group, and the check-off has as its central purpose that of being a “self-help” program designed to improve markets for beef. That central purpose has been articulated clearly by the Congress in the legislative history of the Act, and readily admitted to publicly by the current president of the National Cattlemen's Beef Association.
 

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