On July 27, 2021, the U.S. Court of Appeals for the Ninth Circuit affirmed a summary judgment against claims that certain promotional activities funded by beef check-off funds amounted to unconstitutional compelled speech. Ranchers Cattlemen Action Legal Fund v. Vilsack, No. 20-35453 (9th Cir. July 27, 2021).
Like many U.S. commodity industries, the beef industry is promoted by a program created by Congress that is financed by an assessment paid by beef producers on each head of cattle sold. The assessment is called a “check-off.” The funds are remitted to an entity called the Beef Board that, in turn, creates programs to promote beef. Some of the funds also are disbursed to state bodies, called qualified state beef councils (QSBC’s) that also fund promotional activities, including directing funds to third parties for the production of advertisements and other promotional materials. Memoranda of understanding (MOU’s) exist between the QSBC’s and the Secretary of Agriculture giving the latter pre-approval over all check-off funded promotion and the authority to decertify a non-compliant QSBC.
The federal portion of the beef check-off was challenged years ago Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550 (2005), in which the plaintiffs argued that check-off funded promotion was compelled private speech in violation of the First Amendment. This claim was rejected by the Supreme Court on the ground that, since the Secretary exercises final approval authority “over every word used in every promotional campaign,” the speech was government speech and, as such, did not violate the First Amendment rights of those paying check-off who might not agree with the promotional message.
The issue in the present case was whether the speech by third parties receiving funding from the QSBC’s was sufficiently controlled by the Secretary so as to be considered government speech. The Ninth Circuit ruled that it was and rejected the First Amendment challenge:
Here, too, the message is firmly established by the federal government. The Beef Act’s implementing regulations require that all third-party speech “strengthen the beef industry’s position in the marketplace,” and not mention “brand or trade” names, engage in “unfair or deceptive acts or practices,” or seek to influence “governmental policy or action.” . . . QSBCs must submit annual budget and marketing proposals for the Secretary’s approval that contain “anticipated expenses and disbursements” and “a general description of the proposed promotion . . . programs contemplated.” In addition, the QSBCs must give the Secretary advance notice of all board meetings, allowing participation by the Secretary or his designees in any discussions about payments to third parties.
Slip op. at 14. That the Secretary does not exercise final pre-approval authority over all of the check-off funded third-party speech, did not change the outcome because
the Secretary clearly has that authority. . . . [T]he Secretary has unquestioned control of the flow of assessment funds to the QSBCs — and the threat of decertification under the MOUs and the regulations if he disapproves of the use of those funds.”
Id.