JOHANNS v. LIVESTOCK MARKETING ASSOCIATION

Legal Principle at Issue

Did the 8th Circuit err in holding that the 1985 Beef Promotion & Research Act, and regulations promulgated there under which impose assessments on beef producers and importers to fund research, education, and promotional activities carried out by special administrative bodies created by Congress for the express purpose of furthering important governmental objectives under direct supervision of Secretary of Agriculture are unconstitutional and unenforceable?

Action

Vacated and remanded. Petitioning party received a favorable disposition.

Facts/Syllabus

The Beef Promotion and Research Act of 1985 (Beef Act) establishes a federal policy of promoting and marketing beef and beef products. The Secretary of Agriculture has implemented the Act through a Beef Promotion and Research Order, which creates a Cattlemen’s Beef Promotion and Research Board and an Operating Committee, and imposes an assessment, or “checkoff,” on all sales and importation of cattle. The assessment funds, among other things, beef promotional campaigns approved by the Operating Committee and the Secretary. 

Respondents are two associations — the Livestock Marketing Association and Nebraska Cattlemen, Inc. — whose members collect and pay the checkoff, and several individuals who raise and sell cattle subject to the checkoff. They sued the Secretary of Agriculture Mike Johanns, the Department of Agriculture, and the Cattlemen’s Beef Promotion and Research Board in federal District Court on a number of constitutional and statutory grounds — in particular, that the Board impermissibly used checkoff funds to send communications supportive of the beef program to beef producers. The District Court granted a limited preliminary injunction, which forbade the continued use of checkoff funds to laud the beef program or to lobby for governmental action relating to the checkoff.

While the litigation was pending, the Supreme Court held in United States v. United Foods, Inc. (2001) that a mandatory checkoff for generic mushroom advertising violated the First Amendment. Noting that the mushroom program closely resembles the beef program, respondents Livestock Marketing Association and Nebraska Cattlemen amended their complaint to assert a First Amendment challenge to the use of the beef checkoff for promotional activity, noting that the advertising promotes beef as a generic commodity, which, they contended, impedes their efforts to promote the superiority of American beef, grain-fed beef, or certified Angus or Hereford beef.

After a bench trial, the District Court ruled for the respondents on their First Amendment claim. The District Court declared that the Beef Act and Beef Order unconstitutionally compel respondents to subsidize speech to which they object, and rejected the government’s contention that the checkoff survives First Amendment scrutiny because it funds only government speech. The District Court entered a permanent injunction barring any further collection of the beef checkoff, even from producers willing to pay (allowing continued collection of voluntary checkoffs, the court thought, would require “rewrit[ing]” the Beef Act). Believing that the cost of calculating the share of the checkoff attributable to the compelled subsidy would be too great, the court also declined to order a refund of checkoff funds already collected. Finally, the court made permanent its earlier injunction against “producer communications” praising the beef program or seeking to influence governmental policy. The court did not rule on respondents’ other claims, but certified its resolution of the First Amendment claim as final.

The U.S. Court of Appeals for the Eighth Circuit affirmed, but unlike the District Court, the Eighth Circuit did not dispute that the challenged advertising is government speech; instead, it held that government speech status is relevant only to First Amendment challenges to the speech’s content, not to challenges to its compelled funding. Compelled funding of speech, it held, may violate the First Amendment even if the speech in question is the government’s.