Supreme Court rules raisin program is "unconstitutional"

Posted June 23, 2015

In a 8-1 vote, the Supreme Court denied a raisin price-support program that dates back to the New Deal, ruling it unconstitutionally requires growers to surrender their crop to the government for future sale, according to The Wall Street Journal article available here. USA Today also published an article available here and Reuters here.

The federal program violates the Fifth Amendment prohibition of taking private property “for public use without just compensation,” according to Chief Justice John Roberts.

While the government can regulate production in order to keep goods off the market, the chief justice said it cannot seize that property without compensation, according to USA Today.

"Selling produce in interstate commerce ... (is) n ot a special governmental benefit that the government may hold hostage, to be ransomed by the waiver of constitutional protection," Roberts said. "Raisins are not dangerous pesticides; they are a healthy snack."

The raisin program was defended by the Obama administration as a win-win proposition. Prices remain high for farmers, and their excess raisins can be donated to school lunch programs or sold overseas. If profits exceed administrative costs, the farmers share in the excess.

Justice Sonia Sotomayor, the sole dissenter, said a court precedent requires that "each and every property right be destroyed by governmental action" before a taking has occurred. The program, she added, "does not deprive the Hornes of all their property rights," according to Reuters.

The Hornes came up with a plan to circumvent the program by packing and marketing their own raisins in a move they said would make them exempt from it. The government disagreed and sanctioned the Hornes for the 2002-2003 and 2003-2004 seasons.

Chief Justice John Roberts said the government should pay the Hornes the market value of the raisins and relieve them of the fine that was imposed. The total value is around $700,000.

The Hornes' constitutional challenge to the program has lasted a decade and previously led to another Supreme Court case they won in 2013.

The case is Horne v. U.S. Department of Agriculture, U.S. Supreme Court, No. 14-275.

For more information on marketing orders, please visit the National Agricultural Law Center’s website here.

USDA Seeking Input on New Beef Checkoff

Posted November 10, 2014

The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) is seeking public input to guide the development of a new industry-funded promotion, research, and information order for beef and beef products, according to a USDA press release available here. Beef Magazine also published an article available here and Agri-Pulse here.

The new order, also known as a “checkoff program,” would be an addition to existing beef checkoff programs and provide more marketing and research resources to strengthen the nation’s beef industry.

"Beef industry representatives agree that this important program needs more resources. USDA is stepping up at a critical juncture to help achieve the industry's goal. With this action we can boost research investments, increase beef exports, and encourage folks here at home to support American beef producers," said Agriculture Secretary Tom Vilsack.

Beef industry leaders have agreed that the existing fee of $1/head-of-cattle/producer is too little, but USDA has stated that the $1 assessment has remained the same since 1985 when Congress created the program, and the amount can only be changed through Congressional action, according to Beef Magazine.

USDA will consider written comments in developing its proposal for a Beef Promotion, Research and Information Order that provides for a promotion, research, and information program for beef and beef products under the 1996 Act until December 10. The new program would operate concurrently with the Beef Checkoff Program authorized under the authority of the 1985 Act.

Comments may be submitted online at www.regulations.gov or sent to Beef Promotion, Research, and Information Order; Research and Promotion Division, Room 2096-S; Livestock, Poultry and Seed Program; AMS, USDA, STOP 0249; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-0249; telephone number (202) 720-5705.

Vilsack has stated that he hopes to have the new checkoff in place by December 2015, according to Agri-Pulse.

For more information on checkoff programs, please visit the National Agricultural Law Center’s website here.

Big Data Project to Obtain Agricultural Data

Posted June 24, 2014

Iowa farm and community organizations are supporting a project that will “harness the power of agricultural data to the benefit of farmers,” according Iowa Soybean Association (ISA) release available here. Brownfield Ag News also published the article here and Pork Network here.

The “Big Data Strategy and Implementation Plan” is backed by Iowa AgState and was developed by the Hale Group of Danvers, Mass. The plan aims to immediately obtain all relevant facts about how agricultural data is collected, shared, analyzed, and used.

Brian Kemp, ISA president and AgState chair, said that Big Data is not a new issue for agriculture, but the ability to collect, interpret, and manipulative data is an increasing issue that requires action.

“This project will be conducted at the strategic level addressing many components, namely data ownership and control,” said Kemp, who farms near Sibley. “By harnessing the knowledge of existing data and how it can be used, farmers can influence policy more effectively, develop appropriate user and privacy agreements and drive mutually beneficial relationships with those whom we do business.”

Dean Lemke, nutrient management and environmental stewardship director of the Agribusiness Association of Iowa and member of the AgState Big Data task force, said the project complements other regional and national projects focused on similar issues.

“The Hale Group has unique capabilities to do the work to benefit the greater industry,” Lemke said. “They will do a thorough job of gathering information from many sources on the topic of Big Data, define what’s most meaningful to farmers and how they can capitalize on it and then share these findings with all stakeholders.”

Farmers do not wish to “stop Big Data,” however, they wish to influence the way it is developed and introduced to growers, said Bob Ludwig of The Hale Group.

For more information on checkoff programs, please visit the National Agricultural Law Center’s website here.

USDA Publishes Final Rule Establishing Paper Checkoff Program

Posted January 29, 2014

The U.S. Department of Agriculture (USDA) recently published a final rule for the Paper and Paper-based Packaging Promotion program.  The final rule is available here.

The rule establishes a research, promotion, and information program for paper and paper-based packaging.  The program will cover four types: “printing, writing and related paper (used to make products for printing, writing and other communication purposes), kraft packaging paper (like grocery bags and sacks), containerboard (used to make corrugated boxes, shipping containers and related products), and paperboard (used for food and beverage packaging, tubes and other miscellaneous products).

The program will be funded by the industry with an assessment on domestic paper and paper-based packaging manufacturers and importers.  The assessment rate will be $0.35 per short ton.  The industry voted on the program and the assessment fee – 85 percent voted to implement the program.

The proposed rule was published in the Federal Register on January 2, 2013, and provided for a 60-day comment period.

“Today’s announcement represents a seminal moment for our industry to stand together and promote the benefits of paper-based packaging to customers and consumers,” said Paper Check-off Panel Chairman John Williams, president and CEO of Domtar.  “Our industry produces recyclable products from a renewable resource.  The Paper Check-off will allow us to inform consumers of the sustainable products we make and the responsible manner in which we make them.”  News and information on the Paper program are available here.

Checkoff programs are also referred to as research and promotion programs which promote and provide research and information for a particular agricultural commodity without reference to specific producers or brands.  Producers and handlers usually finance these programs for assessments charged on a per unit basis of the marketed commodity.  For more information on Checkoff programs, please visit the National Agriculture Law Center’s website, here.

AMS Gives Beef Board Clean Review

Posted January 9, 2014

A recent management review of the Cattlemen’s Beef Board (CBB) by the Livestock, Poultry and Seed Program of USDA’s Agricultural Marketing Service (AMS) last week verified that CBB is operating in compliance with the Beef Promotion and Research Act and Order and with all applicable federal laws, regulations and policies, according to an article by Farm Futures available here.

The Beef Promotion and Research Order is authorized by the Beef Promotion and Research Act of 1985, 7 U.S.C. §§ 2901-2918.  AMS is required to conduct management reviews of all commodity boards every three years. 

The report from the AMS Compliance and Analysis Program staff states, “In our management review of CBB, we noted no reportable findings…Our review showed that CBB adhered to the AMS Guidelines for Oversight of Research and Promotion Programs, as well as its own policies,” as reported by Beef Board.

“As secretary-treasurer of the Beef Board, I review finances of the Board on a monthly basis,” said Jimmy Maxey, a cattle feeder in Fresno, California.  “Having seen all of the policies and procedures at work in protecting our checkoff investments, I have confidence in the system we have in place, so I can’t say that I am surprised by the results.  But I think these comprehensive reviews are critical to the transparency of checkoff operations to all producers and importers who pay the beef checkoff assessment.”

The AMS Management Review Report is available here.

For more information on checkoff programs, please visit the National Agricultural Law Center’s website here.

Federal Court Dismisses HSUS Lawsuit over Pork Slogan Sale

Posted September 30, 2013

A U.S. District Court has dismissed a lawsuit filed by the Humane Society of the United States (HSUS) which challenged Secretary of Agriculture Tom Vilsack’s approval of the National Pork Board’s purchase of the marketing slogan, “Pork: The Other White Meat,” according to an article by MeatPoultry.com, available here.  A Capital Press article on the case is available here.

In Humane Society of the United States, et al. v. Tom Vilsack, Secretary of the U.S. Department of Agriculture, No. 12-1582 (D.D.C. Sept. 25, 2013), HSUS alleged that the National Pork Producers Council (NPPC) sold the marketing slogan to the National Pork Board and unlawfully used the $60 million to lobby against animal welfare campaigns.  Plaintiffs argued that the sale violated the Administrative Procedure Act (APA), 5 U.S.C. § 706, alleging that the Secretary's approval was “arbitrary, capricious, an abuse of discretion, and contrary to law.”  Specifically, plaintiffs claimed the contract associated with the sale resulted in the use of pork checkoff dollars for purposes of influencing legislation and government policy, when “the Board is prohibited from using pork producers’ contributions for that purpose.”  Plaintiff Harvey Dillenburg, a hog farmer, claimed that he had standing because the purchase diminished the return on investment of his checkoff dollars.  The complaint is available here.  The text of the opinion is available here.

U.S. District Judge Amy Berman Jackson ruled that the plaintiffs lacked standing to challenge how the National Pork Board spends money collected from hog producers.  Judge Jackson said the plaintiffs failed to show that that they have “suffered an injury” that “can be redressed by this lawsuit.”  Judge Jackson also ruled that plaintiff, Harvey Dillenburg, did not have standing because his claim was only hypothetical and he was not “injured in fact” by the NPPC’s lobbying efforts. 

Judge Jackson stated that “lobbying is what these organizations do, so being prompted to do it can hardly qualify as an injury that confers constitutional standing.”  She continued, “the fact that [the organizations] have decided to redirect some of their resources from one legislative agenda to another is insufficient to give them standing.”

USDA oversees the checkoff program and can reject expenditures that are in violation of federal laws or regulations. 

Checkoff programs are also referred to as research and promotion programs which promote and provide research and information for a particular agricultural commodity without reference to specific producers or brands.  Producers and handlers usually finance these programs for assessments charged on a per unit basis of the marketed commodity.  For more information on Checkoff programs, please visit the National Agriculture Law Center’s website, here.

Supreme Court Rules that Agricultural Marketing Agreement Act of 1937 Withdraws Tucker Act Jurisdiction; Takings Claim Can Be Raised as Affirmative Defense in USDA Enforcement Proceeding

Posted:  June 11, 2013

 

In action involving a constitutional challenge to the California Raisin Marketing Order under the Agricultural Marketing Agreement Act of 1937(AMAA), 7 U.S.C. §§ 701-714, §§ 671-674 Horne v. United States Dep’t of Agric., No. 12-123, 2013 WL 2459521, -- S. Ct. – (June 10, 2013), the United States Supreme Court held in Horne v. United States Dep’t of Agric., No. 12-123, 2013 WL 2459521, -- S. Ct. – (June 10, 2013) that the AMAA withdrew Court of Federal Claims jurisdiction arising under the Tucker Act.  The Court further held that the petitioners’ takings claim could be raised as an affirmative defense against the USDA’s enforcement proceeding against them.  In so holding, the Court reversed the decision of the United States Court of Appeals for the Ninth Circuit and remanded the matter to the Ninth Circuit for further proceedings consistent with its opinion.

In 2004, USDA brought an enforcement action against Marvin and Laura Horne, et al., (hereinafter petitioners) that alleged that the petitioners were “handlers” under the raisin marketing order and that they had failed to comply with several requirements under the order.  The petitioners asserted, inter alia, that they were not “handlers” and, therefore, excluded from coverage of the marketing order.  In addition, the petitioners argued that the marketing order violated the Fifth Amendment of the U.S. Constitution as a taking without just compensation.

 

In 2006, an Administrative Law Judge (ALJ) held that petitioners were “handlers” under the AMAA and that they had, as alleged by  USDA, violated several marketing order requirements.  The ALJ rejected the petitioners’ takings claim as well.  On appeal, a Judicial Officer affirmed the decision that the petitioners were handlers, but declined to render a decision on the petitioners’ takings claim.  The matter was appealed to federal district court where it was held that the petitioners were handlers and that the marketing order did not constitute a takings.  

On appeal, the Ninth Circuit affirmed the federal district court ruling that the petitioners were handlers.  The Ninth Circuit further held that when a handler raises a takings claim against marketing orders promulgated under the AMAA, the Court of Federal Claims jurisdiction under the Tucker Act is removed by the AMAA.  Interestingly, however, the Ninth Circuit determined that the petitioners were “producers” – instead of handlers – for purposes of their takings claim and, therefore, there was nothing in AMAA that prohibited the petitioners from raising their takings claim in the Court of Federal Claims.  And, on that basis, the Ninth Circuit held that the petitioners’ takings claim was not ripe for adjudication.

In reaching its decision, the Supreme Court stated the following:

Under the AMAA's comprehensive remedial scheme, handlers may challenge the content, applicability, and enforcement of marketing orders. Pursuant to §§ 608c(15)(A)-(B), a handler may file with the Secretary a direct challenge to a marketing order and its applicability to him. We have held that “any handler” subject to a marketing order must raise any challenges to the order, including constitutional challenges, in administrative proceedings. See United States v. Ruzicka, 329 U.S. 287, 294, 67 S.Ct. 207, 91 L.Ed. 290 (1946). Once the Secretary issues a ruling, the federal district court where the “handler is an inhabitant, or has his principal place of business” is “vested with jurisdiction ... to review [the] ruling.” § 608c(15)(B). These statutory provisions afford handlers a ready avenue to bring takings claim against the USDA. We thus conclude that the AMAA withdraws Tucker Act jurisdiction over petitioners' takings claim. Petitioners (as handlers) have no alternative remedy, and their takings claim was not “premature” when presented to the Ninth Circuit.

The Court further held that “[a]lthough petitioners' claim was not 'premature' for Tucker Act purposes, the question remains whether a takings-based defense may be raised by a handler in the context of an enforcement proceeding initiated by the USDA under § 608c(14). We hold that it may.”

 

HSUS Files Suit Against NPPC Funding

Earlier today, the Humane Society of the United States (HSUS) filed suit against the United States Department of Agriculture in an attempt to void a contract between the National Pork Board (NPB) and the National Pork Producer’s Council (NPPC).  The NPB is the entity through which pork “checkoff” dollars are spent, while the NPPC is an industry group focused on legislative and public policy issues that affect its members.  The contracts at issue involve the rights to the slogan “Pork, The Other White Meat” and related intellectual property. 

According to the lawsuit “the $3 million per year the NPB pays NPPC for those rights is illegal, because those funds are used for NPPC lobbying efforts. The lawsuit estimated those payments account for as much as 32 percent of NPPC’s annual budget revenue.” See Meatingplace article here. 

HSUS claims standing to bring suit on its own behalf because “NPPC has consistently expended significant funds to fight HSUS policy and legislative reforms related to humane practices in the care of farm animals.”  As a result, HSUS argues, “[s]ince HSUS resources would otherwise be spent on advocacy, legislation, and education related to improving the treatment of pigs and other animals, Defendant’s unlawful conduct directly impedes Plaintiff’s activities, and causes a significant drain on its resources and time.”

 
To read the complaint, click here.  The press release issued by HSUS in conjunction with the filing is available here.  As of this time, no press release has been issued by either the NPB or the NPPC.

Posted: 9/24/2012
Questions? Looking for more information? Contact Staff Attorney Elizabeth Rumley at erumley@uark.edu

Farm Bill Vote Keeps Mandatory Checkoffs

A Senate amendment that would have made mandatory checkoffs for soybeans and other crops voluntary has been defeated. 

Alan Kemper, chairman of the American Soybean Association, told AgriNews that the defeat of the amendment likely ensures the continuance of the current checkoff structure. 

“As far as we know, there will be nothing like it offered in the House of Representatives. We don’t anticipate any further action.”

The U.S. Department of Agriculture administers the soybean checkoff through the United Soybean Board. In 2011, the checkoff raised more than $80 million. This monkey is used, "largely to increase exports and domestic use of soybeans as well as fund research."

Kemper continued, “the industry has been extremely supportive of checkoffs across the country. Those against it might be people for whom we have not done a good enough job educating on the benefits of a checkoff."

To read the full article, click here.

This article posted July 11, 2012.

Beef Checkoff Returns $5.55

For every dollar invested by a beef producer it returns about $5.55 in value to the producers. This is according to an economic study just completed by Dr. Ron Ward, professor emeritus at the Food and Resource Economics Department at the University of Florida. For the Beef Board’s press release, click here.

According to Dr. Ward,

“Is the beef checkoff a demand driver? This was the most fundamental question of the entire study, and the answer is an overwhelming ‘yes,’ the generic promotion of beef has shifted beef demand,” Ward noted in his research conclusions. “The marginal rate-of-return is large enough to provide overwhelming evidence that the programs are achieving positive impacts (on) the U.S. demand for beef,” he said.

Dr. Ward’s results were presented on Monday at the 2009 Cattle Industry Summer Conference in Denver, Co. To view a copy of Dr. Ward’s report entitled The Beef Checkoff Programs and Their Impact on U.S. Beef Demand, click here.

Posted: 07/21/09

Checkoff Programs

Subject Description: Checkoff programs, also referred to as research and promotion programs, promote and provide research and information for a particular agricultural commodity without reference to specific producers or brands. While this area of the law is not as active as it once was, this subject area will assist users in staying up-to-date on news and developments regarding Checkoff Programs.