Held up on appeal; Beef checkoff collection to continue during Appeals Court process

From Staff Reports

July 18, 2002 -- Collection of the $1-per-head beef checkoff will continue until the U.S. Court of Appeals for the 8th Circuit Court of Appeals decides if Federal District Court Judge Charles Kornmann's ruling on the subject will stand.

Kornmann, on June 21, declared the beef checkoff "unconstitutional and unenforceable" after hearing arguments made by Livestock Marketing Association (LMA), the Western Organization of Resource Councils (WORC), and several individual producers. Kornmann had also ordered a halt to checkoff collections starting July 15.

On July 10, the Appeals Court granted the Department of Justice's request for a stay regarding the halt of checkoff collections. The request was made on behalf of the U.S. Department of Agriculture, the Cattlemen's Beef Board, and Nebraska Cattlemen.

The stay allows the beef promotion program to continue without interruption while the appeal is pending.

"We are pleased that the court recognized the importance of continuing the beef checkoff program through the appeal process," said Cattlemen's Beef Board Chairman Dee Lacey, a cow-calf producer from Paso Robles, Calif. "This will allow continuance of promotion efforts on behalf of beef producers during challenging market conditions."

LMA officials said the appeals court "obviously wanted to maintain the status quo until it could review Judge Kornmann's entire decision." The association said on July 11 that they "remain confident (Kornmann's) decision ... is a correct statement of the law."

The appeals process could take several months, according to LMA attorneys.

Opinions about the beef checkoff program and Judge Kornmann's ruling were registered during Country World's web poll, which concluded July 15. As of July 8, the tabulation was 88 percent of the respondents agreed with Judge Kornmann's decision -- that the checkoff program is unconstitutional, and only 12 percent said they disagreed with the judge's decision.

Final tabulation of the poll on July 15 showed a reversal of the first reporting of the web poll -- 43 percent agree with the judge, and 57 percent disagree.

Poll respondents leaving comments on Country World's website between July 8 and July 15 were only from those who agree with the judge's decision.

One poll respondent, Pat, agrees with the judge's decision, and noted "if cattlemen had been able to follow the way their money was being used, they would have tried to do away with it years ago. It has given people in charge of it (checkoff funds) a license to steal. I agree that it is unconstitutional and should be done away with. It has never done anything for me personally as a producer."

R.L. stated, "I voted against the checkoff. I am still against it. My cattle sell at a local sale barn, then they belong to somebody else. Why should additional expense ($1 per head) come out of my check? Rose-colored glasses are not for me. It's a rip-off! The judge is right!"

Cattle producer John said, "The checkoff is a tax because it is mandated by the government and all it does is generate more economy by spreading my money around to many others, few of which are in the cow business. Texas is a 'right to work' state in which you do not have to join a union in order to work. Why do we have to pay a tax in order to sell cattle?"

Texas' Independent Cattlemen's Association, on July 12, is one group that disagrees with Kornmann's decision. They "applaud the (appellate court's) decision ... to grant a stay" in the matter. ICA First Vice President Verlin Callahan of Cedar Creek called the appellate court ruling "a battle that we had to win because if we were to reimplement the system in place for collecting the checkoff money, the program may have self-destructed without any further help from a court. Now our local auctions, treaty buyers and others can continue to do business without any unnecessary changes that could eventually be overruled."

The beef checkoff program was established as part of the 1985 Farm Bill. The checkoff assesses $1 per head on the sale of live domestic and imported cattle, in addition to a comparable assessment on imported beef and beef products. States retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen's Beef Promotion and Research Board, which directs the national checkoff program, subject to USDA oversight. The checkoff assessment became mandatory when the program was approved by 79 percent of producers in a 1988 national referendum vote.