61 Agric. Dec. 99

Complainant, one of the officials charged with administering the Act of February 2, 1903, recommends the assessment of a $1,000 civil penalty against Respondent, as follows:

Respondent's action undermines the United States Department of Agriculture's efforts to prevent the spread of animal diseases throughout the United States. In order to deter [R]espondent and others similarly situated from committing violations of this nature in the future, [C]omplainant believes that assessment of the requested civil penalty of one thousand dollars ($1,000.00), is warranted and appropriate.

Complainant's Motion for Adoption of Proposed Default Decision and Order at 2nd unnumbered page.

Thus, I find assessment of a $1,000 civil penalty against Respondent is justified in fact. I find no basis in this proceeding for assessing a civil penalty against Respondent other than that recommended by Complainant. I reject Respondent's request that I assess a civil penalty against Respondent that is equal to the price of the pet bird Respondent brought into the United States in violation of 9 C.F.R. §§ 93.101(a), .104(a), and .105(b).

Complainant states he has no objection to Respondent's payment of the civil penalty in installments of $50 per month (Response to Respondent's Appeal at 5). Based on Complainant's lack of objection to Respondent's paying the civil penalty in installments of $50 per month and my finding that Respondent's payment of the $1,000 civil penalty in installments of $50 per month will achieve the remedial purposes of the Act of February 2, 1903, I issue an Order which allows Respondent to pay the $1,000 civil penalty in installments of $50 per month.

For the foregoing reasons, the following Order should be issued.

ORDER

Respondent is assessed a $1,000 civil penalty. The civil penalty shall be paid by certified checks or money orders, made payable to the "Treasurer of the United States," and sent to:

United States Department of Agriculture

APHIS Field Servicing Office

Accounting Section

P.O. Box 3334

Minneapolis, MN 55403

Respondent shall pay the $1,000 civil penalty in installments of $50 each month for 20 consecutive months. Respondent's first payment shall be sent to, and received by, the United States Department of Agriculture, APHIS Field Servicing Office, Accounting Section, within 30 days after service of this Order on Respondent. If Respondent is late in making any payment or misses any payment, then all remaining payments become immediately due and payable in full. Respondent shall state on the certified checks or money orders that payment is in reference to A.Q. Docket No. 01-0010.

61 Agric. Dec. 121

BEEF PROMOTION AND RESEARCH ACT

COURT DECISION

LIVESTOCK MARKETING ASSOCIATION, et al. v. USDA and NEBRASKA CATTLEMEN, INC., et al.,

DEFENDANTS. v. USDA.

No. Civ. 00-1032.

Filed June 21, 2002.

(Cite as: 207 F.Supp.2d 992).

INTERVENERS &

BPRA - First Amendment – Commercial Speech - Beef checkoffs – Intervener as proper party - Standing.

The U.S. District Court of South Dakota (Court) held that the portion of enforced dues known as "Beef checkoffs" collected by the Cattlemen's Beef Promotion and Research Board (Board) which were used to promote generic advertisement for beef (commercial speech) was an unconstitutional infringement of the rights of the several plaintiffs. The Court likened the compulsory collection of the Beef checkoffs of $1.00 (per head of live cattle sold) to be indistinguishable from the collection of $0.01 (per pound of mushrooms sold) in the case of United Foods, Inc. v. USDA. The Court agreed that the use of 85% of the compulsory dues in promoting generic beef as "producer communications" and which is not merely ancillary to an overall statutory scheme requiring antitrust exemptions is an unconstitutional infringement of free speech. The Court struck down as unconstitutional all portions of the Beef Promotion and Research Act which mandates that sellers pay an assessment because it violates the First amendment of the Constitution. The Court enjoined the Board from prospectively collecting such dues and restrained the use of checkoff funds from certain purposes lauding the policies or actions of the Board. The Court recognized the Plaintiffs' (as a group) as having standing so long as one of the several Plaintiffs qualified and the Court did not need to consider the standing issue as to the other plaintiffs

UNITED STATES DISTRICT COURT

D. SOUTH DAKOTA,

NORTHERN DIVISION.

MEMORANDUM OPINION AND ORDER

KORNMANN, District Judge.

INTRODUCTION

[1] Plaintiffs instituted this action to challenge certain activities in connection with the Beef Promotion and Research Act (Title XVI, Subtitle A, of the Food Security Act of 1985), Pub. L. 99-198, Title XVI, § 1601, codified at 7 U.S.C. §§ 2901-11 ("the Act") and certain actions and inaction on the part of the United States Secretary of Agriculture ("Secretary") and the Cattlemen's Beef Board ("Board"). The Act authorizes the Secretary to promulgate a Beef Promotion and Research Order ("Order"), 7 U.S.C. § 2903, to establish a Cattlemen's Beef Promotion and Research Board (“Board”), 7 U.S.C. § 2904, and an Operating Committee, 7 U.S.C. § 2904(4)(A), to carry on a "program of promotion and research designed to strengthen the beef industry's position in the marketplace and to maintain and expand domestic and foreign markets and uses for beef and beef products." 7 U.S.C. § 2901(b). The program is funded by mandatory producer and importer contributions of one dollar per head on each transaction. 7 U.S.C. § 2904(8)(C). These mandatory contributions are referred to collectively as the "beef checkoff."

[2.] In fiscal year 2001, beef checkoff revenues totaled $86,099,403.00. Of that, $47,469,581.00 went to the Board. In states with a Qualified State Beef Council ("QSBC"), such as South Dakota, all checkoff funds collected by livestock markets go to the QSBC. There are 45 QSBC organizations. Each QSBC sends 50 cents to the Board, 25 cents to the National Cattleman's Beef Association ("NCBA”), a private trade group, for use in its non-Beef Board activities. The amount going to the Board included $60,907.00 collected from producers in states without a QSBC, $8,778,852.00 from importers, and $38,629,822.00 from QSBCs. The remaining funds were used by the QSBCs. The NCBA is the federation of QSBC's. The NCBA is a private contractor with the Board and 90% of all Board contracts are awarded to the NCBA. The Board consists of 110 members. The QSBC's nominate ten members to serve on the Beef Operating Committee which approves the budgets of the Board. The Board elects the Operating Committee.

[3.] In 1998, the Livestock Marketing Association ("LMA") initiated a petition drive to obtain a referendum on the question of the continuation of the beef checkoff program. LMA submitted the petitions to USDA on November 12, 1999. The Secretary did not act to validate the petitions and schedule a referendum vote. Plaintiffs instituted this litigation seeking 1) a declaratory judgment that the 1985 Act and the Secretary's action or inaction pursuant thereto is unconstitutional in violation of plaintiffs' rights to due process and equal protection, 2) an injunction prohibiting the Secretary from collecting assessments pursuant to the 1985 Act, 3) a preliminary injunction ordering defendants to immediately schedule a referendum election as to whether the

61 Agric. Dec. 121

checkoff should be retained or, alternatively, ordering defendants to immediately decide whether to schedule such a referendum, and 4) an order requiring the Board to immediately cease its expenditures for so-called "producer communications" and to make restitution to producers for in excess of $10 million claimed to have been illegally expended on such communications since 1998.

[4.] Plaintiffs' claims that the Board's producer communications activities violate both the Act and the First Amendment by using checkoff funds to disseminate public relations messages, including anti-referendum messages, and their claims that in implementing the petition validation program, the Secretary has failed to comply with the requirements of the Paperwork Reduction Act of 1995, were heard on January 25, 2001. The court issued a preliminary injunction on February 23, 2001. This prevented defendants from any further use of beef checkoff assessments to create or distribute any material for the purpose of influencing governmental action or policy with regard to the beef checkoff or the Board or both. It also prevented defendants from using assessments to block or discourage a referendum, from using assessments to attempt to influence beef producers to keep the Board or the checkoff program or both in existence, and from using assessments to laud the checkoff program by using descriptive words or phrases such as “fair”, “accountable", "effective”, "it's working", and the like. Livestock Marketing Association v. United States Department of Agriculture, 132 F.Supp.2d 817 (D.S.D.2001).

[5.] The United States Supreme Court issued a decision on June 25, 2001, in United States Department of Agriculture v. United Foods, Inc., 533 U.S. 405, 121 S.Ct. 2334, 150 L.Ed.2d 438 (2001), holding that the mandatory checkoff for mushroom promotions was in violation of the First Amendment and striking down as unconstitutional all portions of the Mushroom Act of 1990 which “authorize such coerced payments for advertising." United Foods v. U.S., 197 F.3d 221, 225 (6th Cir.1999), aff'd 533 U.S. 405, 121 S.Ct. at 2341, 150 L.Ed.2d 438. Following the issuance of the United Foods decision, the plaintiffs were allowed to amend their complaint to add a claim that the beef checkoff program violated plaintiffs' First Amendment rights to freedom of speech and freedom of association. The parties filed cross motions for summary judgment on the new First Amendment claims and those motions were denied. The First Amendment claims were bifurcated and a trial to the court on those issues was held on January 14, 2002.