Petition for Writ of Certiorari — Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, Petitioner v. Thomas J. Vilsack, Secretary of Agriculture, et al.

App. 1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RANCHERS CATTLEMEN ACTION

LEGAL FUND UNITED

STOCKGROWERS OF AMERICA,

a Montana Corporation,

No. 20-35453

D.C. No.

4:16-cv-00041-BMM

Plaintiff-Appellant,

OPINION

v.

THOMAS VILSACK, in his Official

Capacity as Secretary of

Agriculture; UNITED STATES

DEPARTMENT OF AGRICULTURE,

Defendants-Appellees,

MONTANA BEEF COUNCIL;

NEBRASKA BEEF COUNCIL;

PENNSYLVANIA BEEF COUNCIL;

TEXAS BEEF COUNCIL; LEE

CORNWELL; GENE CURRY;

WALTER J. TAYLOR, JR.,

Intervenor-Defendants-Appellees.

Appeal from the United States District Court

for the District of Montana

Brian M. Morris, District Judge, Presiding

Argued and Submitted June 10, 2021

Portland, Oregon

Filed July 27, 2021

App. 2

Before: Kim McLane Wardlaw, Richard C. Tallman,

and Andrew D. Hurwitz, Circuit Judges.

Opinion by Judge Hurwitz

COUNSEL

David S. Muraskin (argued), Public Justice P.C.,

Washington, D.C.; William A. Rossbach, Rossbach Law

P.C., Missoula, Montana; J. Dudley Butler, Butler Farm

& Ranch Law Group PLLC, Benton, Mississippi; for

Plaintiff-Appellant.

Lindsey Powell (argued) and Michael S. Raab, Appellate Staff; Civil Division, United States Department of

Justice, Washington, D.C.; Ryan M. Majerus, Senior

Counsel; Stephen A. Vaden, General Counsel; United

States Department of Agriculture, Washington, D.C.;

for Defendants-Appellees.

Jean-Claude André (argued), Bryan Cave Leighton

Paisner LLP, Santa Monica, California; Bryan J. Harrison, Bryan Cave Leighton Paisner LLP, Washington,

D.C.; Robert M. Thompson and Mollie E. Harmon,

Bryan Cave Leighton Paisner LLP, Kansas City,

Missouri; Randy J. Cox, Boone Karlberg P.C., Missoula,

Montana; for Intervenor-Defendants-Appellees.

Tyler Lobdell and Tarah Heinzen, Food & Water Watch,

Washington, D.C., for Amici Curiae Food & Water

Watch, Dakota Rural Action, Family Farm Action

Alliance, Farm and Ranch Freedom Alliance, Institute

for Agriculture and Trade Policy, Iowa Citizens for Community Improvement, Rural Advancement Foundation

App. 3

International USA, and Western Organization of

Resource Councils.

OPINION

HURWITZ, Circuit Judge:

This case involves a challenge by the RanchersCattlemen Action Legal Fund (“R-CALF”) to mandatory assessments on cattle sales imposed by federal

law used to fund advertisements for beef products. The

Montana Beef Council (“MBC”) and other qualified

state beef councils (“QSBCs”) receive a portion of the

assessments to fund promotional activities and some

of these QSBCs direct a portion of these funds to third

parties. The dispositive question is whether the speech

generated by the third parties is government speech

and therefore exempt from First Amendment scrutiny.

The district court so held and entered summary

judgment against R-CALF. We affirm.

I

A

The Beef Promotion and Research Act of 1985

(“Beef Act”) imposes a $1 assessment, or “checkoff,” on

each head of cattle sold in the United States to fund

consumption promotions to “maintain and expand

domestic and foreign markets and uses for beef and

beef products.” 7 U.S.C. §§ 2901(b), 2904(8)(C). The

Secretary of Agriculture oversees the beef checkoff

program through the Cattlemen’s Beef Promotion and

App. 4

Research Board (the “Beef Board”), whose members

the Secretary appoints. Id. § 2904(1).1 A QSBC typically collects the checkoff, retaining 50 cents to fund

state marketing efforts, and forwarding the remainder

to the federal program. Id. § 2904(8)(C); 7 C.F.R.

§ 1260.172(a)(3). Producers may, however, opt out of

funding their QSBC and direct the entire assessment

to the federal program. See Beef Promotion and

Research, 84 Fed. Reg. 20,765, 20,766–67 (May 13,

2019).

Since 2016, the Secretary, through the Agricultural Marketing Service (“AMS”), has entered into

memoranda of understanding (“MOUs”) with QSBCs.

The MOUs grant the Secretary pre-approval authority

over “any and all promotion, advertising, research, and

consumer information plans and projects.” The Secretary also reviews and approves the QSBCs’ budgets

and marketing plans, which detail their anticipated

expenses and disbursements, and government officials

can participate in QSBC board meetings at which

promotional and funding decisions are made. The

MOUs allow the Secretary to decertify a noncompliant

QSBC, thereby terminating its access to checkoff

funds.

Using checkoff funds, QSBCs can hire private

third parties to produce advertisements and other

1

The Beef Board elects ten members to the Beef Promotion

Operating Committee; a federation of QSBCs elects the other

ten members. 7 U.S.C. § 2904(4)(A). The Operating Committee

develops promotional campaigns for the Beef Board. See 7 U.S.C.

§ 2904(4)(B).

App. 5

promotional materials. Some engagements involve

contracts. Under the MOUs, the Secretary must preapprove all contracts and any plans or projects developed under them. The parties agree that third-party

speech generated pursuant to these contracts is government speech.

But QSBCs can also make noncontractual transfers of checkoff funds to third parties to produce

promotional materials. Materials produced by this

funding method need not be pre-approved. Recipients of these transfers must identify their expenditures in an “annual accounting” and abide by

the principles of the Beef Act—promoting beef

without being unfair, deceptive, or political. The

primary issue on appeal is whether speech made

by third parties under these arrangements is effectively government speech.

B

R-CALF’s members include cattle producers who

object to their QSBCs’ advertising campaigns. R-CALF

first challenged the checkoff program in 2016, alleging that the distribution of funds to the MBC under

the federal program is an unconstitutional compelled

subsidy of private speech. While that litigation was

pending, the MBC entered into an MOU with the

Secretary. Without considering the MOU, the district

court entered a preliminary injunction preventing the

use of checkoff funds for promotional campaigns absent the producers’ consent. A divided panel affirmed

App. 6

the preliminary injunction; the majority expressly

declined to consider the effect of the MOU. R-CALF v.

Perdue, 718 F. App’x 541, 542 n.1 (9th Cir. 2018). The

dissent opined that the MOU “plainly grants the

Secretary complete pre-approval authority over ‘any

and all promotion, advertising, research, and consumer

information plans and projects’ of the MBC,” and

therefore would have vacated the preliminary

injunction. Id. at 543 (Hurwitz, J., dissenting) (quoting

Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550, 560

(2005)).

On remand, R-CALF amended its complaint to

seek relief against fourteen additional QSBCs, all of

which had MOUs with the Secretary. Four QSBCs and

three producers intervened to defend the program. The

district court granted summary judgment to the Secretary and intervenors, adopting a magistrate judge’s

proposed findings of fact and conclusions of law.

The district court found that R-CALF had standing to sue. But it concluded that the MOUs gave the

Secretary sufficient control over the promotional program to make the QSBCs’ speech—and the speech

of third parties they paid—effectively government

speech. It also rejected R-CALF’s request for an injunction to ensure the Secretary continues to enforce the

terms of the MOUs. R-CALF timely appealed.

II

We agree with the district court that R-CALF

has associational standing to sue the twelve QSBCs

App. 7

to which its members pay checkoffs. But R-CALF

concedes that it lacks such standing to challenge the

use of checkoff funds by QSBCs in states where none

of its members pay checkoffs—Hawaii, South Carolina,

and Vermont. Thus, R-CALF must establish direct

standing to sue those three QSBCs.

“[A]n organization has direct standing to sue

where it establishes that the defendant’s behavior has

frustrated its mission and caused it to divert resources

in response to that frustration of purpose.” E. Bay

Sanctuary Covenant v. Biden, 993 F.3d 640, 663 (9th

Cir. 2021). “Of course, organizations cannot manufacture the injury by incurring litigation costs or simply

choosing to spend money fixing a problem that otherwise would not affect the organization at all, but they

can show they would have suffered some other injury

had they not diverted resources to counteracting the

problem.” Id. (cleaned up); see also Am. Diabetes Ass’n

v. U.S. Dep’t of the Army, 938 F.3d 1147, 1154–55 (9th

Cir. 2019) (collecting cases).

R-CALF’s mission includes “protecting domestic,

independent cattle producers.” R-CALF uses some 60%

of its resources to educate producers on the use of

checkoff funds by QSBCs. The beef checkoff program

affects that mission and R-CALF has devoted (and

continues to devote) resources, independent of expenses for this litigation, to deal with the program that

might otherwise be used in support of that mission. See

Comite de Jornaleros de Redondo Beach v. City of

Redondo Beach, 657 F.3d 936, 943 (9th Cir. 2011)

(en banc) (spending “time and resources” to “meet”

App. 8

with impacted individuals that kept from other “core

organizing activities” established standing); see also

Valle del Sol Inc. v. Whiting, 732 F.3d 1006, 1018

(9th Cir. 2013) (“divert[ing] resources to educational

programs” established standing). Moreover, if R-CALF

did not pursue this litigation, the QSBCs would have

continued to use funds in a way that would frustrate

R-CALF’s organizational mission by allegedly “promot[ing] corporate consolidation in the beef industry.”

See E. Bay Sanctuary, 993 F.3d at 663. We therefore

find that R-CALF has direct standing to pursue this

litigation against the three QSBCs to which none of its

members pay checkoffs.

III

A

The critical question in determining whether

speech is public or private is whether the speech is

“effectively controlled” by the government. Johanns,

544 U.S. at 560. In Johanns, the Supreme Court upheld the federal portion of the beef checkoff program

against a compelled-speech attack because “the government sets the overall message to be communicated

and approves every word that is disseminated.” Id. at

562. Johanns “emphasized three overlapping aspects”

of the federal program: (1) “Congress directed the

establishment of the program itself, including its

promotional activities,” (2) “Congress and the Secretary specify the general content of the promotional

campaigns,” and (3) “the Secretary ‘exercises final

App. 9

approval authority over every word used in every

promotional campaign.’ ” Paramount Land Co. LP v.

Cal. Pistachio Comm’n, 491 F.3d 1003, 1009–10 (9th

Cir. 2007) (quoting Johanns, 544 U.S. at 560–61, 563);

see also Delano Farms Co. v. Cal. Table Grape Comm’n,

586 F.3d 1219, 1226–27 (9th Cir. 2009) (identifying the

same factors).

Applying the Johanns factors, this Court has twice

issued opinions upholding mandatory assessment programs against First Amendment attacks.2 Paramount

Land refused to enjoin as unconstitutional a California

statute providing subsidies from assessments on pistachio sales to the California Pistachio Commission

because the State had specified the overall goal of the

program—to promote pistachio sales—and exercised

control over messaging. 491 F.3d at 1010–12. The

Commission, comprised of nine members, only one of

whom was named by the State, was required to submit to the State for concurrence “an annual statement

of contemplated activities . . . including advertising, promotion, marketing research, and production

research.” Id. at 1010 (quoting Cal. Food & Agric. Code

§ 69051(q)). Noting that the State had “less control”

over the Commission than the Secretary exercised

over the Beef Board, the Paramount panel nonetheless concluded that “[t]o draw a line between these

two approaches to oversight risks micro-managing

2

In an unpublished decision, this Court also upheld mandatory assessments on rental car transactions. See In re

Tourism Assessment Fee Litig., 391 F. App’x 643, 645–46 (9th

Cir. 2010).

App. 10

legislative and regulatory schemes, a task federal

courts are ill-equipped to undertake.” Id. at 1011–12.

Delano Farms upheld similar compulsory assessments on California table grape growers, citing a state

legislative directive that went “much further in defining the Commission’s message than the Beef Act”

along with the State’s power to appoint and remove all

California Table Grape Commissioners. 586 F.3d at

1225, 1228, 1230. The Court reached this conclusion

despite recognizing that the statute did “not require

any type of review by the [State] over the actual messages promulgated by the Commission.” Id. at 1229.

B

This case is similar to Paramount Land and

Delano Farms. Under the MOUs, QSBCs must submit “for pre-approval” by the Secretary “any and all

promotion, advertising, research, and consumer information plans and projects”3 and “any and all potential

contracts or agreements to be entered into by [QSBCs]

for the implementation and conduct of plans or

projects funded by checkoff funds.”4 QSBCs must also

submit “an annual budget outlining and explaining

. . . anticipated expenses and disbursements” and a

3

QSBCs have submitted thousands of approval requests to

the AMS. For example, the Texas QSBC has made more than 650

submissions, and it may take days or weeks before a final product

is approved.

4

In 2018 and 2019, the AMS reviewed about 155 QSBC

contracts.

App. 11

“general description of the proposed promotion, research, consumer information, and industry information programs contemplated.” See Paramount Land,

491 F.3d at 1010 (noting that the Pistachio

Commission must submit “an annual statement of

contemplated activities . . . including advertising,

promotion, marketing research, and production

research” (quoting Cal. Food & Agric. Code

§ 69051(q))).

Failure

to

comply can lead to de-certification of the QSBCs by the

Secretary. This establishes, as in the federal program,

“final approval authority over every word used in

every promotional campaign.” Johanns, 544 U.S. at

561. Promotional campaigns by QSBCs and contracted

third parties subject to the Secretary’s pre-approval

are therefore plainly government speech.

Third-party speech not subject to pre-approval is

also “effectively controlled” by the government. Congress expressly contemplated the participation of third

parties in the beef checkoff program, designating several “established national nonprofit industry-governed

organizations” with whom the Operating Committee

could contract to “implement programs of promotion.”

7 U.S.C. § 2904(6).5 The Supreme Court upheld that

5

Most of the third-party funding goes to two advocacy

organizations—the Federation Division of the National Cattleman’s Beef Association (“Federation”) and the United States Meat

Export Federation (“USMEF”)—with established relationships

with the Beef Board. Congress gave the Federation an express

role in the beef checkoff program, authorizing it to elect members

of the Operating Committee, 7 U.S.C. § 2904(4)(A), and directing

the Operating Committee to “enter into contracts or agreements

App. 12

program despite recognizing the presence of “assistance from nongovernmental sources in developing”

advertising. Johanns, 544 U.S. at 562.

Paramount Land vacated a preliminary injunction

in a similar program despite the Pistachio Commission’s use of funds from assessments to pay “a political

consultant who hires lawyers to represent the industry

before the International Trade Commission and the

Commerce Department, and to lobby government

entities on behalf of the pistachio industry.” 491 F.3d

at 1007. We treated the third-party speech as that of

the Commission because the “message set out in the

pistachio promotions is from beginning to end the

message established by the state government.” Id. at

1012 (cleaned up).

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.” 7

C.F.R. § 1260.169(a), (d), (e). 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

. . . with established national nonprofit industry-governed organizations, including the federation . . . to implement programs of

promotion, research, consumer information, and industry

information,” 7 U.S.C. § 2904(6).

App. 13

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.6

R-CALF argues that such safeguards are insufficient because the government does not exercise final

pre-approval authority over some third-party speech.

But in Paramount Land, we found dispositive the

government’s ability to control speech, even when it

declined to do so. See 491 F.3d at 1011–12. Here, the

Secretary clearly has that authority. In addition to the

oversight previously mentioned, the 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. See 7 C.F.R. § 1260.181(a) (providing for certification, and, impliedly, decertification of

QSBCs by the Beef Board); see also id. § 1260.213

(providing for the removal of Beef Board members by

the Secretary). “Just as ‘the Secretary of Agriculture

does not write the copy of the beef advertisements

himself ’ for the Beef Board, neither should such oversight be required for the [ ] scheme to pass constitutional muster.” Paramount Land, 491 F.3d at

1012 (quoting Johanns, 544 U. S. at 560) (cleaned

up). A contrary holding here “risks micro-managing

6

Defendants also argue that the opt-out scheme cures any

First Amendment concern. Because we hold that the government

effectively controls the speech at issue, we do not reach this issue.

App. 14

legislative and regulatory schemes, a task federal

courts are ill-equipped to undertake.” Id. at 1012.7

We therefore affirm the summary judgment of the

district court.

IV

Even if the underlying summary judgment is

affirmed, R-CALF nonetheless argues that the district

court should have entered a permanent injunction

requiring the continuation of the MOUs to prevent the

risk that the current policy will be undone. The district

court determined that no injunction was needed

because the MOUs mooted R-CALF’s entitlement to

relief and no exception to mootness applied.

“It is well-established . . . that ‘voluntary cessation of allegedly illegal conduct does not deprive the

7

R-CALF also argues that the QSBCs must have at least

some members appointed and removable by the Secretary for

the speech to constitute government speech. But the Secretary’s ability to decertify a QSBC—which has been previously

exercised—provides even greater oversight than the limited

removal authority this Court has cited in other cases. See Delano

Farms, 586 F.3d at 1229 (noting the State’s power to remove

individual members of the Table Grape Commission and to

recommend that producers suspend the Commission’s operation);

Paramount Land, 491 F.3d at 1011 (noting that while the

Secretary cannot remove members of the Pistachio Commission,

she may “suspend or discharge the Commission’s president if he

has engaged in any conduct that the Secretary determines is not

in the public interest,” or “correct or cease any existing activity or

function that is determined by the [S]ecretary not to be in the

public interest or in violation of the Pistachio Act”) (cleaned up).

App. 15

tribunal of power to hear and determine the case’

unless ‘it can be said with assurance that there is no

reasonable expectation that the alleged violation will

recur’ and ‘interim relief or events have completely and

irrevocably eradicated the effects of the alleged

violation.’ ” Fikre v. FBI, 904 F.3d 1033, 1037 (9th Cir.

2018) (cleaned up) (quoting Cnty. of Los Angeles v.

Davis, 440 U.S. 625, 631 (1979)). The government

receives greater deference than private parties when

courts analyze voluntary cessation. See Am. Cargo

Transp., Inc. v. United States, 625 F.3d 1176, 1180 (9th

Cir. 2010) (collecting cases). But the government “must

still demonstrate that the change in its behavior is

entrenched or permanent.” Fikre, 904 F.3d at 1037

(cleaned up). It must be “absolutely clear to the court,

considering the procedural safeguards insulating the

new state of affairs from arbitrary reversal and the

government’s rationale for its changed practices, that

the activity complained of will not reoccur.” Id. at 1039

(cleaned up).

The government has met that burden here. To be

sure, the MOUs are revocable. And, the Secretary

entered into the first MOU only after the magistrate

judge recommended a preliminarily injunction in this

case. But, over five years have now passed since the

Secretary first entered into the MOUs to document the

Department’s control of the use of checkoff funds—

including with QSBCs not named in this litigation. See

Am. Diabetes Ass’n, 938 F.3d at 1153 (finding two years

of policy weighs in favor of mootness). And the MOUs

remain binding unless both parties agree to rescind

App. 16

them, providing safeguard from arbitrary reversal. See

Fikre, 904 F.3d at 1039. Under these circumstances,

the MOUs are an “entrenched” change in the prior

status quo, and the district court did not err, in the

absence of any evidence that the Secretary intends to

withdraw from the MOUs, in declining to enter a

permanent injunction requiring him not to.8

AFFIRMED.

8

We also reject R-CALF’s cursory argument that the MOUs

are unlikely to remain in place because they did not go through

notice and comment. Even assuming that R-CALF preserved this

argument by raising it below, an MOU is not a legislative rule for

which notice and comment is required. See, e.g., Perez v. Mortg.

Bankers Ass’n, 575 U.S. 92, 102 (2015); Hemp Indus. Ass’n v. Drug

Enf ’t Admin., 333 F.3d 1082, 1087 (9th Cir. 2003).

App. 17

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

GREAT FALLS DIVISION

RANCHERS-CATTLEMEN

ACTION LEGAL FUND,

UNITED STOCKGROWERS

OF AMERICA,

Plaintiff,

vs.

CV-16-41-GF-BMM

ORDER ADOPTING

FINDINGS AND

RECOMMENDATIONS

(Filed Mar. 27, 2020)

SONNY PERDUE, in his

official capacity as Secretary

of Agriculture, and the

UNITED STATES

DEPARTMENT OF

AGRICULTURE,

Defendants,

vs.

MONTANA BEEF COUNCIL,

et al.

Defendant-Intervenors.

Introduction

This Court answered the exact question now before it nearly three years ago when it adopted Magistrate

Judge John Johnston’s findings and recommendations to grant a preliminary injunction in favor of

Plaintiffs on the basis that the federal Beef Checkoff Program violated the First Amendment. This

Court adopted Magistrate Judge Johnston’s findings in

App. 18

full. The Ninth Circuit affirmed. As this litigation

wound its way from the Magistrate Judge to the Ninth

Circuit, the United States Department of Agriculture

(“USDA”) began entering into memorandums of understanding with a number of qualified state beef councils

that remain parties to this litigation. These memorandums gave USDA broad new authority over any

potential speech that the beef councils might produce.

The parties all filed motions and cross motions for

summary judgment.

Magistrate Judge Johnston reversed course and

now recommended granting summary judgment in

favor of Defendants and Defendant-Intervenors. He

outlined why the memorandums of understanding—

which no beef council had entered until after Magistrate Judge Johnston had issued his first findings

and recommendations—provided sufficient control of

qualified state beef councils’ speech for that speech to

qualify as government speech and thus not run afoul

of the First Amendment. All parties objected in full, or

in part, to Magistrate Judge Johnston’s Findings and

Recommendations. And so, three years after having

answered this question once before, this Court faces

the questions of whether the federal Beef Checkoff

Program violates the First Amendment.

Standard of Review

The Court reviews de novo findings and recommendations to which the parties make objections. 28

U.S.C. § 636(b)(1). No review is required of proposed

App. 19

findings and recommendations to which no objection

has been made. Thomas v. Arn, 474 U.S. 140, 149-152

(1986). “The court shall grant summary judgment if

the movant shows that there is no genuine dispute as

to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a).

Background

Congress passed The Beef Promotion and

Research Act of 1985 (“Beef Act”) “to strengthen the

beef industry’s position in the marketplace and to

maintain and expand domestic and foreign markets.”

7 U.S.C. § 2901(b). To accomplish this goal, Congress

imposed a $1 assessment, or “checkoff,” on cattle producers for each head of cattle sold in the United States.

See id. The checkoff would fund beef-related promotional campaigns. Congress also created the Beef

Board and Beef Promotion Operating Committee to

run the checkoff program and assist in crafting the

research and promotion plans undertaken with checkoff funds. 7 U.S.C. § 2904(1)-(5); see also 7 C.F.R.

§§ 1260.141, 1260.161.

While Congress created this federal program to

strengthen the beef industry, it also recognized that

“State and national organizations [already] conduct[ed]

beef promotion, research, and consumer education

programs that [were] invaluable to the efforts” of

maintaining beef markets. 7 U.S.C. § 2901(a)(5). So

Congress gave these state entities a role to play in this

new beef-market-strengthening regime by allowing

App. 20

qualified state beef councils (“QSBCs”) to collect the

checkoff assessments on behalf of the Beef Board. See

7 C.F.R. § 1260.172(a)(2). QSBCs must receive certification from the Beef Board before they may collect

assessments. See id. § 1260.181(a). In certain limited

circumstances, the Beef Board may decertify QSBCs.

(See Doc. 40-1 (Payne Declaration) ¶ 29 (citing 7 C.F.R.

§ 1260.181).)

QSBCs that collect the checkoff funds may retain

$0.50 to fund its own promotional activities. It must

send the remaining $0.50 to the Beef Board. 7 U.S.C.

§ 2904(8)(C); 7 C.F.R. § 1260.172(a)(3). This process

operates as the default payment for checkoff funds.

Producers, if they so choose, can opt-out under the

“Redirection Rule” of paying QSBCs any of their

assessment. This rule allows producers to “request a

redirection of assessments from a Qualified State Beef

Council to the Board” by “submitting a redirection

request.” 7 C.F.R. § 1260.172(a)(7). QSBCs agree that

any such requests “will be honored” as a condition of

certification. Id. § 1260.181(b)(8).

QSBCs may only uses checkoff funds in a limited

manner. QSBCs may only engage in promotional

activities that “strengthen the beef industry’s position

in the marketplace.” 7 C.F.R. § 1260.181(b)(1); see 7

C.F.R. § 1260.169 (defining activities that QSBCs may

conduct under § 1260.181(b)(1) to include “projects for

promotion” of the beef industry). At the same time,

QSBCs must certify that they will not use any of the

money that they receive under the Beef Checkoff

Program to promote “unfair or deceptive” practices,

App. 21

or to “inf luenc[e] governmental policy.” 7 C.F.R.

§ 1260.181(b)(7).

On top of these limits, QSBCs have begun entering

into Memoranda of Understaning (“MOU”) that give

USDA significant discretion to approve or reject any

and all QSBC promotional activities. Under the MOUs,

QSBCs agree to submit to USDA “for pre-approval any

and all promotion, advertising, research, and consumer

information plans and projects.” (Ex. 18, Doc. 91-1 at

RCALF_000045.) QSBCs also must provide USDA

with advance notice of any QSBC board meetings and

allow a USDA official to attend. (Id.) USDA may “direct

the Beef Board to de-certify” the QSBC if the QSBC

fails to comply with the MOU. (Id. at RCALF_000046.)

Decertified QSBCs cannot receive checkoff funds. (Id.)

I.

R-CALF Possesses Article III Standing

Magistrate Judge Johnston determined that RCALF had Article III standing to bring this lawsuit.

(Doc. 135 at 4-7.) Article III limits courts to deciding “cases” or “controversies.” See U.S. Const. art. III.

Courts have distilled the case or controversy requirement into a familiar three-part test—injury-in-fact,

causation, and redressability. Steel Co. v. Citizens for a

Better Env., 523 U.S. 83, 102-03 (1998). As the party

invoking the court’s jurisdiction, R-CALF bears the

burden of proof for each element. Spokeo, Inc. v. Robins,

136 S. Ct. 1540, 1547 (2016).

Organizations can invoke a court’s jurisdiction by

demonstrating a few additional elements on top of the

App. 22

typical three. These additional requirements differ

depending on whether the organization brings the

lawsuit on behalf of itself or its members. To bring a

lawsuit on behalf of its members, the organization

must demonstrate that “(a) its members would otherwise have standing to sue;” (b) the suit is “germane to

the organization’s purpose;” and “(c) neither the claim

asserted nor the relief requested requires the participation of individual members,” as is the case here,

where “the association seeks a declaration [or] injunction.” Hunt v. Wash. State Apple Advert. Comm’n, 432

U.S. 333, 343 (1977) (quoting Warth v. Seldin, 422 U.S.

490, 515 (1975)). An organization may bring a lawsuit

on its own behalf “[when] it show[s] a drain on its

resources from both a diversion of its resources and

frustration of its mission’ ” in response to the alleged

unlawful act. Valle del Sol Inc. v. Whiting, 732 F.3d

1006, 1018 (9th Cir. 2013) (additions in original)

(quoting Fair Hous. Council of San Fernando Valley v.

Roommate.com, LLC, 666 F.3d 1216, 1219 (9th Cir.

2012)).

Magistrate Judge Johnston found that R-CALF

had demonstrated associational standing to bring this

lawsuit on behalf of itself against all of the QSBCs and

on behalf of its members against 12 of the 15 QSBCs.

(Doc. 135 at 6-7.) No party objected to this part of

Magistrate Judge Johnston’s analysis.

Although they do not object to Magistrate Judge

Johnston’s findings about organizational standing,

Defendant-Intervenors object to whether R-CALF

has satisfied the redressability prong of Article III

App. 23

standing. (Doc. 138 at 2-8.) Magistrate Judge Johnston

rejected Defendant-Intervenors’ argument about redressability because this Court had “rejected a nearly

identical argument in its opinion in 2016” and nothing

since then would have changed Magistrate Judge

Johnston’s analysis. (Doc. 135 at 7.)

Defendant-Intervenors object to Magistrate Judge

Johnston’s findings in five ways. They seem to argue

that Magistrate Judge Johnston contradicted himself

because he ruled that QSBCs “were engaged in government speech” and thus this Court could not offer

any redress. This argument impermissibly collapses

the Court’s standing analysis with its merits analysis.

Plaintiffs only fail to satisfy the redressability prong if

they cannot receive a remedy redressing their injury

even if they win. Of course this Court cannot offer

Plaintiffs a remedy that would redress their injuries

when Plaintiffs lose on the merits (i.e. whether QSBCs

make government speech). This conclusion does not

preclude Plaintiffs from receiving a remedy that would

redress their injuries had Plaintiffs prevailed on the

merits. See Maya v. Centex Corp., 658 F.3d 1060, 1068

(9th Cir. 2011) (collecting cases that distinguish between standing and the merits).

Defendant-Intervenors also argue that the Court

cannot redress R-CALF’s injury because R-CALF

wants “the Beef Checkoff program to differentiate

between foreign and domestic beef.” (Doc. 138 at 2.)

This objection fails because it largely ignores—and

does not preclude—Magistrate Judge Johnston’s finding regarding standing. Magistrate Judge Johnston

App. 24

found that R-CALF had standing because one of RCALF’s purported purposes was “protecting domestic,

independent cattle producers.” (Doc. 135 at 6 (quoting

Doc. 111 at 7).) R-CALF has been injured by diverting

resources from protecting domestic, independent cattle

producers to fighting this alleged First Amendment

violation. (See id.) The Court could redress R-CALF’s

injury by an injunction preventing the alleged First

Amendment violation.

Whether R-CALF wants the Beef Checkoff program to differentiate between foreign and domestic

beef proves irrelevant to Magistrate Judge Johnston’s

analysis. Defendant-Intervenors’ objection would only

preclude R-CALF from showing that it had standing if

Magistrate Judge Johnston had found that R-CALF’s

injury arose from the Beef Checkoff program’s failure

to differentiate between foreign and domestic beef. His

analysis did no such thing.

Defendant-Intervenors other three objections relate to whether R-CALF has suffered injury by diverting resources. First, they claim that R-CALF

cannot have standing because R-CALF has not shown

that “its lack of success [lobbying] Congress and the

Executive Branch was due to a lack of resources.” (Doc.

138 at 5.) This argument would place a requirement on

organizations not mandated by Ninth Circuit case law.

R-CALF does not need to show that it will lobby

Congress and the Executive Branch successfully; it

only needs to show that it will be able to undertake

more lobbying of Congress and the Executive Branch

App. 25

in the absence of the alleged First Amendment

violation. R-CALF has done so.

Defendant-Intervenors make two separate, but

related arguments, that both suffer from the same

flaw: they simply ignore without explanation Magistrate Judge Johnston’s findings that R-CALF has

diverted resources to fight this alleged First Amendment violation. Defendant-Intervenors maintain that

R-CALF “cannot manufacture . . . injury [to itself ] by

incurring litigation costs or simply choosing to spend

money fixing a problem that otherwise would not

affect the organization at all.” (Id. at 6 (quoting La

Asociacion de Trabajadores de Lake Forest v. City of

Lake Forest, 624 F.3d 1083, 1088 (9th Cir. 2010)).)

Defendant-Intervenors then argue based on a recent

decision, Humane Soc’y v. Perdue, 935 F.3d 598, 601-04

(D.C. Cir. 2019)), that R-CALF must have more than a

“mere interest in a problem or an ideological injury.”

(Id. at 6 (quoting Humane Soc’y, 935 F.3d at 604

(quoting PETA v. USDA, 797 F.3d 1087, 1094 (D.C. Cir.

2015))).) The thrust of both arguments strikes at a

fundamental principle underlying standing doctrine:

Plaintiffs must have a “personal stake in the outcome”

of a lawsuit. Baker v. Carr, 369 U.S. 186, 205 (1962); see

City of Los Angeles v. Lyons, 461 U.S. 95, 101 (1983).

Both of Defendant-Intervenors’ arguments maintain

in different ways that R-CALF lacks a personal stake

in this litigation.

Both of these arguments fail because they ignore

Magistrate Judge Johnston’s findings regarding the

personal stake that R-CALF has in this litigation,

App. 26

namely the diversion of its resources. As Magistrate

Judge Johnston correctly pointed out, R-CALF has

diverted resources to educate producers on the use of

checkoff funds by QSBCS—the alleged problem central

to this case that would undercut R-CALF’s purpose of

protecting domestic, independent cattle producers if

let unaddressed. (See Doc. 135 at 6.) Thus, R-CALF is

not attempting to solve a problem that would otherwise not affect it, but instead attempting to address

a problem that would directly undercut its entire

purpose. The diversion of resources also proves that

R-CALF has not alleged some “mere interest in a

problem,” but rather has alleged a problem and the

specific way that problem impacts R-CALF. Neither of

Defendant-Intervenors arguments proves availing

absent some sort of explanation about why R-CALF

has not diverted 40 percent of its resources.

II.

QSBCs Do Not Conduct Government

Speech in the Absence of the MOUs

Magistrate Judge Johnston noted that “the Government tangentially claims that it had effective

control over the QSBCs’ advertising campaigns without the MOUs.” (Doc. 135 at 14.) Magistrate Judge

Johnston endorsed this Court’s first ruling, which address the same factual scenario now before the Court

with the exception of the MOUs. (Id.) The Government

objects to this finding. This Court has no reason

to doubt its analysis from its first decision in this

case, as the Ninth Circuit affirmed. See R-CALF

App. 27

v. Perdue, 718 F. App’x 541 (9th Cir. 2018). The Court

rejects the Government’s objection on this issue.

III.

QSBCs Conduct Government

Speech Under the MOUs

The First Amendment protects private parties

from subsidizing speech with which the private party

disagrees. See Knox, 567 U.S. at 309. No such prohibition applies to government speech, though. See

Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550, 559-560

(2005). Government’s remain accountable to its constituents for any speech with which those constituents

disagree; the same is not true of private speech. See id.

at 563.

That said, private organizations may still make

speech that falls within the definition of government

speech. See id. at 560 n.4. Private organizations make

government speech only when the federal government

“effectively control[s]” the message of the nongovernment entity. Id. at 560; see also Delano Farms Co. v.

Cal. Table Grape Comm’n, 586 F.3d 1219, 1226 (9th Cir.

2009).

The Supreme Court has given a general description of what government speech looks like in the

context of checkoff funded organizations. The federal

government must control the speech “from beginning

to end.” Johanns, 544 U.S. at 560. The Supreme Court

has considered a number of factors when determining

if speech by a checkoff funded entity qualifies as

government speech. The Court considered whether

App. 28

statutes and regulations “specified, in general terms,

what the promotional campaign shall contain, and

what they shall not.” Id. at 561. The Government may

then delegate “development of the remaining details

to an entity whose members are answerable” to the

government. Id. Whether government officials may

“attend and participate in open meetings at which”

that development occurs also proves relevant to the

analysis. Id. Finally, the government must retain

ultimate veto power over the private organization’s

advertisements, “right down to the wording.” Id. at

563.

The Ninth Circuit has recognized two critical

considerations when applying Johanns. First, the focus

in a Johanns analysis must be on potential control,

rather than actual control exercised. See Paramount

Land Company LP v. California Pistachio Commission,

491 F.3d 1003, 1011 (9th Cir. 2007); see also Johanns,

544 U.S. at 560. Second, “Johanns did not set a floor

or define minimum requirements.” Paramount Land,

491 F. 3d at 1011.

Magistrate Judge Johnston made two findings

related to the factors outlined in Johanns to which no

party has objected. The Court has reviewed Magistrate

Judge Johnston’s findings regarding the general terms

of promotional campaigns and participation in QSBC

board meetings. The Court agrees with Magistrate

Judge Johnston’s findings and will adopt them.

App. 29

A. Answerability to USDA

Magistrate Judge Johnston found that QSBC

members remain answerable to USDA through the

certification and decertification process. 7 C.F.R.

§ 1260.181. Through that process the Beef Board, in

concurrence with USDA, approves all QSBCs. QSBCs

may not obtain checkoff funds without certification. Id.

The Beef Board similarly can revoke that certification

and ability to receive checkoff funding.

Magistrate Judge Johnston rejected R-CALF’s

argument that the QSBCs only remain answerable to

the Government if the Government appoints some or

all of their members. R-CALF noted that every board

previously approved by a court as making government

speech had one or members who were appointed by the

Government. Magistrate Judge Johnston noted that

the “presence of appointment and removal powers

proves significant, but the absence of those powers

proves quite little.” (Doc. 135 at 11.) He continued by

stating that appointment and removal stand as strong

ways to ensure answerability, but hardly the only

way. (Id.) Magistrate Judge Johnston emphasized that

“under the MOUs . . . , USDA now retains complete

final approval over all QSBC ads. This final approval

gives USDA the option to exercise its authority to

decertify a QSBC before the QSBC ever gets the chance

to disseminate advertisements.” (Doc. 135 at 13.)

R-CALF now objects to Magistrate Judge Johnston’s findings related to the appointment and removal

of QSBC board members. R-CALF does not cite a single

App. 30

case that explicitly states that boards like QSBCs

that receive checkoff funds must have at least some

members appointed and potentially removed by the

Federal Government. R-CALF instead claims that

because “any party had some or all of its members

appointed and likely subject to remove by the government” in other government speech cases, QSBCs

cannot undertake government speech unless at least

one of their members is appointed and likely subject

to removal by the Government. (Doc. 139 at 20-23.)

R-CALF then claims that the absence of appointment

and removal of QSBC members makes QSBC speech

“inconsistent with the premise of ‘government speech’:

that the First Amendment need not apply because

there is ‘democratic accountability’ for the speech.” (Id.

at 22 (quoting R-CALF II, 2017 WL 2671072, at *5).)

This argument borders on frivolous as Paramount

Land explains. There the government appointed one

member of the nine-member board. The government

also could suspend or discharge the board’s president

and must “concur in any nomination and election

procedures.” Paramount Land, 491 F.3d at 1010. The

Court fails to see what practical difference as related

to democratic accountability could possibly exist between the board in Paramount Land and QSBCs here

due to the appointment of one member of a ninemember board. And as R-CALF acknowledges in a

different part of its brief, “if a court is sure the speech

‘is from beginning to end the message established’ by

the government[,] it should not ‘draw a line between’

minor differences in satisfying that requirement.”

App. 31

(Doc. 139 at 17 (quoting Paramount Land, 491 F.3d at

1011-12).) Certainly, the difference between a board

with one out of nine members and a board with zero

members appointed by the Government proves minor

here.

What is more, courts have upheld checkoff funded

entities’ speech as government speech even when the

Government possessed limited appointment power.

The United States Supreme Court approved the Beef

Board even though the Government could only appoint

people from a list of candidates nominated by the trade

associations. The Government was further limited by

the requirement that the members must be a geographically representative group of beef producers and

importers. See Johanns, 544 U.S. at 553. As the Ninth

Circuit pointed out in Paramount Land, both the Beef

Board and the board at issue in Paramount Land were

“dominated by industry appointees, not independent

third party board members.” 491 F.3d at 1010 n.4.

Given the Ninth Circuit’s directive that “Johanns

did not set a floor or define minimum requirements,”

this Court agrees with Magistrate Judge Johnston

that the lack of appointment and removal power

proves quite insignificant here. Id. at 1011. Rather, the

focus must remain on answerability to the government, and Magistrate Judge Johnston’s findings and

recommendations correctly outline why QSBCs remain answerable to USDA even in the absence of

appointment and removal power. The Court rejects RCALF’s objections on this issue.

App. 32

B. Final Approval

Magistrate Judge Johnston ultimately found that

USDA now exercises final approval over all QSBC

advertisements. Magistrate Judge Johnston relied on

the MOUs between QSBCs and USDA. (Doc. 135 at 1415.) Under the MOUs, QSBCs agree to submit to

USDA “for pre-approval any and all promotion, advertising, research, and consumer information plans and

projects, which [USDA] shall review and approve or

reject.” (Doc. 133-1 at 3.) The QSBCs also agree “to

submit for pre-approval . . . any and all potential

contracts or agreements to be entered into by [a QSBC]

for the implementation and conduct of plans or projects funded by checkoff funds.” (Id.) Magistrate Judge

Johnston concluded that the “MOUs gives broad preapproval authority, without much, if any, limitation.

At bottom, QSBCs face the choice of getting USDA

approval or not speaking at all.” (Id. at 15.)

R-CALF objects to Magistrate Judge Johnston’s

findings and recommendations on the basis that Magistrate Judge Johnston allegedly made both legal and

factual error. R-CALF claims that Magistrate Judge

Johnston legally erred because under Matal private

speech cannot “be passed off as government speech by

simply affixing a government seal of approval.” (Id.

(quoting Matal v. Tam, 137 S. Ct. 1744, 1758 (2017)).)

R-CALF claims that this quote, and Matal as a whole,

show that Magistrate Judge Johnston incorrectly focused on potential, rather than actual, level of control.

App. 33

Matal hardly undercuts Magistrate Judge Johnston’s analysis. There the potential control the Government could exercise amounted to little more than a

rubber stamp. The Government could not inquire into

whether “any viewpoint conveyed by a mark is consistent with Government policy” and was required to

register trademarks if, in essence, a list of requirements had been met. The Government had almost no

discretion. See Matal, 137 S. Ct. at 1758.

In the absence of discretion to approve or reject

speech, the hallmark of government speech—political

accountability—disappears. If USDA had no discretion

under the MOUs to approve or reject QSBC speech, RCALF would have no political recourse when it saw

advertisements with which it disagreed. That would

fundamentally make QSBC speech private speech.

USDA has significantly more discretion, however, to

approve or reject speech than the government agency

in Matal.

Here, as Magistrate Judge Johnston pointed out,

USDA enjoys significant discretion to approve or reject

QSBC speech. Under the MOUs, USDA will review,

and approve or reject, all promotions, advertising, research, and consumer information plans and projects.

(See Doc. 133-1 at 2.) Nothing in the MOUs limits

USDA’s ability to approve QSBC speech as it sees fit.

Thus, anytime R-CALF sees a QSBC ad that it dislikes,

it may lobby USDA, who has the discretion to approve

or reject similar ads in the future.

App. 34

This analysis raises the question of R-CALF’s

alleged factual error. Although unclear in its brief,

R-CALF appears to claim that Magistrate Judge

Johnston made a factual error by crediting USDA with

more authority to review QSBC speech than USDA has

under the MOUs. (See id. at 24-26.) R-CALF relies on

guidelines provided to QSBCs outlining considerations

that USDA will make when evaluating QSBC speech.

(Exhibit 19, Doc. 91-1 at RCALF_000760.) R-CALF

paints these guidelines as putting drastic limits on

USDA’s review of QSBC speech. A closer review of the

guidelines proves otherwise.

The guidelines retain much of the discretion

that USDA retains under the plain terms of the MOUs.

The guidelines reiterate that QSBCs may not place

advertisements “prior to [USDA] approval.” (Id.)

The guidelines further note that USDA involvement

will require “much analysis” and the guidelines only

encompass USDA’s considerations “[a]s much as

possible.” (Id.) USDA will consider how and where

marketing proposals will be used, how they will be

distributed, and who is the target audience. (Id. at

RCALF_000763.) Critically, and notably absent from

R-CALF’s argument, USDA will consider “the overall

takeaway or net impression” of any marketing proposal. (Id.) USDA identifies the overall takeaway or net

impression as a “Key Point[ ]” of its consideration. On

top of that, USDA will ensure that “[a]ll statements

and depictions [are] appropriate for all audiences

and [are] appropriate for the Secretary of Agriculture

App. 35

and all other USDA employees to make.” (Id. at

RCALF_000775.)

All of these considerations indicate that USDA

retains significant discretion to approve or reject

QSBC speech, even under the guidelines on which RCALF relies. R-CALF takes significant liberties with

how it characterized these guidelines in its objections. Its objection that Magistrate Judge Johnston

made factual error cannot withstand much scrutiny

based upon the text of the Guidelines. The Court will

adopt Magistrate Judge Johnston’s findings regarding

whether USDA retains enough authority over QSBC

speech such that QSBC speech constitutes government

speech.

IV.

Attribution of the Speech to Private

Parties Does Not Per Se Transform

Government Speech to Private Speech

Relying on Johanns, Magistrate Judge Johnston

rejected R-CALF’s argument that QSBCs’ speech is

private speech because QSBCs present it as private

speech. (Doc. 135 at 16-17.) Magistrate Judge Johnston

noted that Johanns addressed and rejected R-CALF’s

argument on this front (Id.)

R-CALF now claims that more recent government

speech decisions state that “part of the government

speech analysis is whether viewers” believe it is the

government doing the speaking. (Doc. 139 at 26.) RCALF relies on various cases that dealt with government speech issues, although none of those cases dealt

App. 36

with checkoff funds. (Id. (citing Walker v. Texas Div.,

Sons of Confederate Veterans, Inc., 135 S. Ct. 2239

(2015); Pleasant Grove City v. Summum, 555 U.S. 460

(2009) and In re Tam, 808 F.3d 1321 (Fed. Cir. 2015) (en

banc), aff ’d Matal, 137 S. Ct. 1744 (2017)).)

A number of concerns give this Court pause to

adopt R-CALF’s proposed reasoning. To start, even RCALF acknowledges that if this Court adopted the

reasoning that R-CALF suggests, then how the speech

was attributed would represent only a “part” of the

analysis. (Doc. 139 at 26.) Every factor under Johanns

weighs in favor of finding that QSBCs conduct government speech. Second, the Court in Johanns expressed

concern regarding attribution only if the alleged

speech were associated with the parties who are now

in R-CALF’s position. See Johanns, 544 U.S. at 564 n.7

(“[R]espondents enjoy no right not to fund government

speech . . . whether or not the reasonable viewer would

identify the speech as the government’s. If a viewer

would identify the speech as respondents’, however, the

analysis would be different.”) R-CALF does not allege

that QSBCs attribute the speech to R-CALF.

Finally, R-CALF has cherrypicked convenient

portions of analyses from cases that did not involve

checkoff programs. The Ninth Circuit and United

States Supreme Court have spoken when it comes to

determining whether a checkoff program constitutes

government speech. All of the cases that R-CALF cites,

in turn, cite Johanns at various points. None of the

cases explicitly discuss, however, amending, overruling, or superseding Johanns. Indeed, Matal discusses

App. 37

Johanns, Summum, and Walker and the different

reasonings of each, implicitly acknowledging that the

government speech analysis may look different when

considering different types of speech. Absent the

United States Supreme Court and Ninth Circuit saying otherwise, this Court will continue to determine

whether checkoff programs constitute government

speech by applying the factors as outlined in Johanns.

V.

Third-party Organizations

Magistrate Judge Johnston also rejected RCALF’s arguments that QSBCs violate the First

Amendment by providing funds to third-party entities,

who may then use those funds to make advertisements. Magistrate Judge Johnston rejected R-CALF’s

argument because doing otherwise would run the

“risk[ ] [of ] micro-managing legislative and regulatory

schemes, a task federal courts are ill-equipped to

undertake.” (Doc. 135 at 17-18 (quoting Paramount

Land, 491 F.3d at 1012).) Magistrate Judge Johnston

also noted that USDA would be better suited than a

federal district court to “parse budget line items” and

remedy any potential abuse of third-party funds by

QSBCs. (Id. at 18.)

R-CALF objects to Magistrate Judge Johnston’s

findings regarding third-party use of QSBC funds. RCALF claims that the Government must have complete control over speech from third-parties who

receive money from QSBCs just as the Government

has complete control of QSBC speech. (Doc. 139 at 16.)

App. 38

According to R-CALF, however, the only limit on thirdparty speech by entities that receive QSBC funds is

that they must comply with the Beef Act and Order.

(Id.) And compliance with the Beef Act and Order”

cannot satisfy Johanns’ requirements for government

speech. (Id. at 16-17.) R-CALF then claims that under

“the F&R’s logic, a private state council can create

another private entity, transfer checkoff money to it to

fund its speech, and thereby evade the First Amendment’s prohibitions. . . . The Constitution cannot be

satisfied through such a shell game of corporate

forms.” (Id. at 20.)

R-CALF suggests that this Court can remedy the

situation simply by ordering “checkoff money only be

spent if the Government can pre-approve the speech.”

(Id. at 18.) Things do no prove so simple. A slight twist

on R-CALF’s own hypothetical proves why. Say, for

instance, that a QSBC used checkoff funds to pay for a

membership in an organization. And that organization

used its membership dues to pay for advertisements

that complied with the Beef Order and Act. What then?

How would R-CALF’s proposed remedy solve the

problem if the QSBC had no ability to control how this

third-party used the QSBC’s membership dues? What

if this third-party transferred all membership dues to

another third-party? How does the QSBC track what

happens to its membership due once it pays the thirdparty? How does R-CALF’s proposed remedy resolve

any of these issues?

Magistrate Judge Johnston’s analysis did not

create this shell game but simply acknowledged that

App. 39

USDA stood best suited to remedy any shell game that

does exist. USDA possesses experience and expertise

in dealing with QSBCs and their budgets that this and

all federal district courts lack. Further, as the Government notes, R-CALF continues to offer no authority

for the proposition that the government must control

all speech by any third-party entity that receives payments for goods and services from a commoditymarketing board.” (Doc. 143 at 17.) In the absence of

controlling case law saying otherwise, this Court will

not impose that requirement on QSBCs.

VI.

R-CALF Cannot Receive an Injunction

R-CALF unsuccessfully claimed before Magistrate

Judge Johnston that it should receive an injunction even if QSBCs conducted government speech.

In recommending against R-CALF, Magistrate Judge

Johnston noted that a party may receive an injunction

in a moot case “where there is ‘no reasonable . . .

expectation that the alleged violation will recur,’ and

where ‘interim relief or events have completely and

irrevocably eradicated the effects of the alleged violation.’ ” Am. Cargo Transp., Inc. v. United States,

625 F. 3d 1176, 1179 (9th Cir. 2010) (quoting Cty. of

Los Angeles v. Davis, 440 U.S. 625, 631 (1979)); see

Barnes, 980 F.2d at 580 (citing the same standard as

outlined in Davis). Governments receive greater deference than private parties when it comes to whether

events have completely and irrevocably eradicated the

effect of the alleged violation. See Am. Cargo Transp.,

Inc., 625 F.3d at 1180 (collecting cases). Magistrate

App. 40

Judge Johnston saw no reason to doubt that the

Government had completely and irrevocably cured the

alleged violation, and neither does this Court.

R-CALF objects to Magistrate Judge Johnston’s

recommendation that R-CALF not receive an injunction. R-CALF claims that even though the Government

receives greater deference than a private party, the

Government still must show that any changes are

“entrenched” or “permanent.” (Doc. 139 at 28 (quoting

Fikre v. FBI, 904 F.3d 1033, 1037-38 (9th Cir. 2018)).)

R-CALF further claims that the Government fails here

because the MOUs here are revocable. (Id.)

This Court remains unpersuaded by R-CALF’s

objections for two reasons. First, the Government has

entered into MOUs with QSBCs uninvolved in this

litigation. (Statement of Undisputed Facts, Doc. 100

¶ 57.) The involvement of QSBCs not involved in this

litigation indicates that the Government has enacted

a broader policy change, not a change with the sole aim

of ending this litigation. Further, the Government may

only revoke the MOUs with the consent of the QSBCs.

(See, e.g., Doc. 133-1 at 3.) Given this Court’s initial

order and the Ninth Circuit’s affirmance, the QSBCs

face the choice of operating under the MOU or

consenting to withdrawal of the MOU and losing their

checkoff funding. These considerations prove sufficient

to show that the MOUs stand “entrenched” in the way

that USDA and QSBCs make use of checkoff funds. See

Fikre, 904 F.3d at 1037-38. The Court denies R-CALF’s

request for an injunction.

App. 41

VII.

Redirection Rule

Magistrate Judge Johnston found that the Government’s finalization of the Redirection Rule failed to

remedy the compelled subsidy problem of which RCALF complains. (Doc. 135 at 7-8.) Magistrate Judge

Johnston relied almost exclusively on this Court’s

previous analysis rejecting the Redirection Rule when

the rule represented only a policy. The Government

objects to Magistrate Judge Johnston’s findings. Having reviewed de novo, this Court agrees with Magistrate Judge Johnston that nothing has happened since

this Court last addressed the Redirection Rule that

would change its analysis. The Court rejects the Government’s objections.

VIII. R-CALF’s First

Motion to Strike (Doc. 114)

No party objected to Magistrate Judge Johnston’s

recommendation regarding R-CALF’s motion to strike

(Doc. 114). Reviewing for clear error and finding none,

this Court will adopt Magistrate Judge Johnston’s

recommendation and deny R-CALF’s motion to strike

as moot.

IX. R-CALF’s Second

Motion to Strike (Doc. 144)

R-CALF filed a motion to strike DefendantIntervenor’s Response to R-CALF’s objections. The

Court generally tends to agree with the idea behind

R-CALF’s brief that Defendant-Intervenors have on

numerous occasions stretched legal principles and

App. 42

factual findings at or near their limits. That said, the

Court need not strike their responses; this Court

knows when a party mischaracterizes a legal principle

or factual finding. R-CALF’s motion is denied.

ORDER

Accordingly, IT IS ORDERED that Magistrate

Judge John Johnston’s Findings and Recommendations (Doc. 135) are ADOPTED IN FULL:

1.

Plaintiff ’s motion for summary judgment

(Doc. 89) is DENIED;

2.

Plaintiff ’s motion to strike (Doc. 114) is DENIED, as moot;

3.

Defendant Sonny Perdue, in his official capacity as Secretary of Agriculture, and the

United States Department of Agriculture’s

cross motion for summary judgment (Doc. 98)

is GRANTED;

4.

Defendant-Intervenors Montana Beef Council, et al.’s cross motion for summary judgment (Doc. 94) is GRANTED.

Further, Plaintiff ’s smotion to strike (Doc. 144) is

DENIED, as moot.

DATED this 27th day of March, 2020.

/s/ Brian Morris

Brian Morris,

Chief District Judge

United States District Court

App. 43

UNITED STATES DISTRICT COURT

DISTRICT OF MONTANA

GREAT FALLS DIVISION

RANCHERS-CATTLEMEN

ACTION LEGAL FUND,

UNITED STOCKGROWERS

OF AMERICA,

Case No.

CV-16-41 -GF-BMM

Plaintiff,

(Filed Mar. 27, 2020)

JUDGMENT IN

A CIVIL CASE

vs.

SONNY PERDUE, in his

official capacity as Secretary of

Agriculture, and the UNITED

STATES DEPARTMENT

OF AGRICULTURE,

Defendants.

vs.

MONTANA BEEF COUNCIL,

et al.,

Defendant-Intervenors.

Jury Verdict. This action came before the Court

for a trial by jury. The issues have been tried and the

jury has rendered its verdict.

X Decision by Court. This action came before the

Court for bench trial, hearing, or determination on the

record. A decision has been rendered.

App. 44

IT IS ORDERED AND ADJUDGED:

Magistrate Judge John Johnston’s Findings and

Recommendations (Doc. 135) are ADOPTED IN FULL:

1. Plaintiff ’s motion for summary judgment

(Doc. 89) is DENIED;

2. Plaintiff ’s motion to strike (Doc. 114) is DENIED, as moot;

3. Defendant Sonny Perdue, in his official

capacity as Secretary of Agriculture, and the United

States Department of Agriculture’s cross motion for

summary judgment (Doc. 98) is GRANTED;

4. Defendant-Intervenors Montana Beef Council, et al.’s cross motion for summary judgment (Doc.

94) is GRANTED.

Further, Plaintiff ’s motion to strike (Doc. 144) is

DENIED, as moot.

Dated this 27th day of March, 2020.

TYLER P. GILMAN, CLERK

By: /s/ S. Redding

S. Redding, Deputy Clerk

App. 45

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MONTANA

GREAT FALLS DIVISION

RANCHERS-CATTLEMEN

ACTION LEGAL FUND,

UNITED STOCKGROWERS

OF AMERICA,

Plaintiff,

CV-16-41-GF-BMM

FINDINGS AND

RECOMMENDATIONS

(Filed Jan. 29, 2020)

vs.

SONNY PERDUE, in his

official capacity as Secretary

of Agriculture, and the

UNITED STATES

DEPARTMENT OF

AGRICULTURE,

Defendants,

vs.

MONTANA BEEF COUNCIL,

et al.

Defendant-Intervenors.

Background

The Beef Promotion and Research Act of 1985

(“Beef Act”), 7 U.S.C. § 2901 et seq., imposes a $1

assessment on cattle producers for each head of cattle sold in the United States. It imposes the same

assessment on each head of cattle imported into the

United States. 7 U.S.C. §§ 2901(b), 2904(8)(C); 7 C.F.R.

§ 1260.172(a)(1). The assessment, also known as a

App. 46

checkoff, funds beef related promotional campaigns

designed to “strengthen the beef industry’s position in

the marketplace and to maintain and expand domestic

and foreign markets . . . for beef and beef products.”

7 U.S.C. § 2901(b). The Cattlemen’s Beef Promotion

and Research Board (“Beef Board”) runs the federal

checkoff program. See 7 U.S.C. § 2904(1)-(2).

Qualified state beef councils (“QSBCs”), which

may be either private entities organized and operating

within a state or entities authorized by state statute,

may collect the checkoff assessments on behalf of the

Beef Board. See 7 C.F.R. § 1260.172(a)(2). Before

QSBCs may collect assessments, they must receive

certification from the Beef Board. See id. § 1260.181(a).

In certain limited circumstances, the Beef Board may

decertify QSBCs. (See Doc. 40-1 (Payne Declaration)

¶ 29 (citing 7 C.F.R. § 1260.181).)

When QSBCs collect the one dollar per-head

checkoff from a cattle producer, it sends 50 cents from

each dollar to the Beef Board. QSBCs retain the

remaining 50 cents to fund its own promotional activities. 7 U.S.C. § 2904(8)(C); 7 C.F.R. § 1260.172(a)(3).

The flow of the producers’ one-dollar assessments—from producer to QSBCs to the Beef Board

with QSBCs keeping their 50 cents—operates as the

default process. Producers have the option, however, to

opt-out of paying QSBCs any of their assessment. The

“Redirection Rule” allows producers to “request a

redirection of assessments from a Qualified State Beef

Council to the Board” by “submitting a redirection

App. 47

request” and requires that QSBCs agree that any such

requests “will be honored” as a condition of certification. 7 C.F.R. §§ 1260.172(a)(7), 1260.181(b)(8).

USDA possesses limited statutory and regulatory

authority over QSBCs use of checkoff funds. USDA

allows QSBCs to engage in promotional activities

that “strengthen the beef industry’s position in the

marketplace.” 7 C.F.R. § 1260.181(b)(1); see 7 C.F.R.

§ 1260.169 (defining activities that QSBCs may

conduct under § 1260.181(b)(1) to include “projects for

promotion” of the beef industry). QSBCs must certify,

however, that they will not use any of the money that

they receive under the Beef Checkoff Program to

promote “unfair or deceptive” practices, or to “influenc[e] governmental policy.” 7 C.F.R. § 1260.181(b)(7).

In addition to USDA’s limited statutory and

regulatory authority, USDA now possesses significant

authority stemming from Memoranda of Understanding (“MOU”) that USDA has entered into with all 15

QSBCs in this lawsuit. Under the MOUs, QSBCs

agree to submit to USDA “for pre-approval any and

all promotion, advertising, research, and consumer

information plans and projects.” (Ex. 18, Doc. 91-1 at

RCALF_000045.) QSBCs must also provide USDA

with advance notice of any QSBC board meetings and

allow a USDA official to attend. (Id.) If any QSBC fails

to comply with the MOUs, USDA may “direct the Beef

Board to de-certify [the QSBC], and, in the event of

such de-certification, [the QSBC] shall stop receiving”

checkoff funds. (Id. at RCALF_000046.)

App. 48

Analysis

The primary issue relevant here is whether speech

by QSBCs constitutes government speech. Defendants

Sonny Perdue, in his official capacity as Secretary of

Agriculture, and the U.S. Department of Agriculture

(collectively the “Government”) and DefendantIntervenors raise a few other threshold questions

related to Article III standing and the Redirection

Rule, 84 Fed. Reg. 20,765, 20,766 (May 13, 2019). The

Court will address those in short order, ruling in favor

of Plaintiff Ranchers-Cattlemen Action Legal Fund,

United Stockgrowers of America (“R-CALF”), before

moving on to the question of government speech.

Standard of Review

“The court shall grant summary judgment if the

movant shows that there is no genuine dispute as to

any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a).

Standing

Article III of the Constitution limits the judicial

power of federal courts to the resolution of cases

and controversies. See U.S. Const. art. III. A case or

controversy exists under Article III only if the Plaintiff

possesses standing. Gettman v. DEA, 290 F.3d 430, 433

(D.C. Cir. 2002). An individual has Article III standing

if he or she satisfies three elements: (1) injury-in-fact;

(2) causation; and (3) redressability. Steel Co. v. Citizens for a Better Env., 523 U.S. 83, 102-03 (1998).

App. 49

Organizations may bring lawsuits but face

different standing requirements than the typical three

elements of standing. If an organization seeks to bring

a lawsuit on behalf of its members, the organization

must demonstrate that “(a) its members would otherwise have standing to sue”; (b) the suit is “germane

to the organization’s purpose”; and “(c) neither the

claim asserted nor the relief requested requires the

participation of individual members,” as is the case

here, where “the association seeks a declaration [or]

injunction.” Hunt v. Wash. State Apple Advert. Comm’n,

432 U.S. 333, 343 (1977) (quoting Warth v. Seldin, 422

U.S. 490, 515 (1975)). Alternatively, an organization

may bring a lawsuit on its own behalf “[when] it

show[s] a drain on its resources from both a diversion

of its resources and frustration of its mission’ ” in

response to the alleged unlawful act. Valle del Sol

Inc. v. Whiting, 732 F.3d 1006, 1018 (9th Cir. 2013)

(additions in original) (quoting Fair Hous. Council of

San Fernando Valley v. Roommate.com, LLC, 666 F.3d

1216, 1219 (9th Cir. 2012)).

The Court finds that R-CALF have demonstrated

associational standing to bring a lawsuit on behalf of

its members against 12 of the 15 QSBCs. Those

members pay the Beef Checkoff and object to being

associated with speech over which they have no

control. (See Doc. 90 at 14.) Also, this lawsuit is

germane to at least one of R-CALF’s purported

purposes—“protecting domestic, independent cattle

producers.” (Doc. 111 at 7.) Finally, the Court finds

App. 50

that neither the claim asserted nor the relief requested

requires the participation of individual members.

The Court also finds that R-CALF has satisfied

Article III’s standing requirements to bring this

lawsuit on behalf of itself. As R-CALF points out,

neither the Government nor Defendant-Intervenors

contest that R-CALF has diverted 60 percent of its

resources to attempting to educate producers on the

use of checkoff funds by QSBCs. (See Doc. 111 at 8; Ex.

56, Doc. 91-3 at 7.) These resources represent funds

that could otherwise be spent “protecting domestic,

independent cattle producers.” That constitutes a diversion of resources sufficient to give R-CALF organizational standing. Further, R-CALF reasonably fears

that QSBCs will use funds in a way that fails to protect

domestic, independent cattle producers, which would

frustrate R-CALF’s organizational mission.

The Government takes issue with whether RCALF has diverted resources and frustrated their mission by bringing this lawsuit. The Government claims

that R-CALF’s “mission is to challenge USDA policies.”

(Doc. 125 at 14.) And the resources that R-CALF has

diverted to things like this lawsuit only further that

mission. According to the Government, an organization

cannot “divert” resources from its mission when the

organization then uses those resources in a way that

serves their mission. (Id.) This argument fails because

nothing about protecting domestic, independent cattle

producers requires R-CALF to fight against QSBCs

use of checkoff funds.

App. 51

Rather than take issue with R-CALF’s organizational or associational standing, Defendant-Intervenors

challenge whether this lawsuit would redress RCALF’s injuries. This Court rejected a nearly identical

argument in its opinion in 2016. See R-CALF et al. v.

Vilsack et al., 2016 WL9804600, at *2 (D. Mont. Dec.

12, 2016), adopted in full, 2017 WL 2671072, at *4 (D.

Mont. June 6, 2017). The case law has not changed

since then, and neither does this Court’s analysis.

Redirection

Since this Court’s last ruling, the Government has

finalized its “Redirection Rule.” See 84 Fed. Reg.

20,765, 20,766 (May 13, 2019). This rule formalized

USDA’s policy of permitting producers to forward their

full assessment to the Beef Board. The Government

argues in essence that this rule removes any compulsion and thus any First Amendment claim brought by

R-CALF must fail.

The Government made similar arguments before

this Court when the Redirection Rule was still just

USDA policy. USDA has finalized the Redirection Rule

since that time. This Court rejected the Governments

arguments related to the Redirection Rule when it was

just policy and it has no reason to reconsider that

rejection now that it is a final rule. This Court relied

on Knox v. Service Employees International Union, 567

U.S. 298 (2012). Under Knox, opt-out provisions like

the one that this Court ruled on previously that has

now been finalized as the Redirection Rule violate the

App. 52

First Amendment. Instead, Knox requires the Government to obtain affirmative consent before taking funds

from individuals for private speech. See id. at 322.

The Ninth Circuit upheld that ruling, see R-CALF v.

Perdue, 718 Fed. App’x 541, 543 (9th Cir. 2018), and

nothing has happened in the interim that requires this

Court to change its analysis.

Private speech versus government speech

The First Amendment protects private parties

from subsidizing speech that the private party disagrees with. See Knox, 567 U.S. at 309. That protection

does not extend to subsidizing government speech. See

Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550, 559-560

(2005). Government speech includes speech from nongovernmental entities in certain circumstances. See id.

at 560 n.4. Nongovernmental entities make government speech only when the federal government “effectively control[s]” the message of the nongovernment

entity. Id. at 560; see also Delano Farms Co. v. Cal.

Table Grape Comm’n, 586 F.3d 1219, 1226 (9th Cir.

2009).

To effectively control the speech, the message

must be “from beginning to end the message established by the Federal Government.” Johanns, 544 U.S.

at 560. In Johanns, the Supreme Court provided a

general outline of what establishing a message “from

beginning to end” looks like. The Court noted that

statutes and regulations “specified, in general terms,

what the promotional campaign shall contain, and

App. 53

what they shall not.” 544 U.S. at 561. The Government

may then delegate “development of the remaining

details to an entity whose members are answerable to

the Secretary (and in some cases appointed by him as

well).” Id. And government officials “attend and participate in open meetings at which” that development

occurs. Id. Further and crucially for this case, the

Secretary there retained ultimate veto power over the

nongovernment entities advertisements, “right down

to the wording.” Id. at 563. Additionally, the Court

noted that Congress “retain[ed] oversight authority”

and “the ability to reform the program at any time.” Id.

at 563-64. “No more is required” to demonstrate control

of a message “from beginning to end.” Id. at 564.

The Ninth Circuit has not viewed Johanns as

defining minimum requirements for showing control

from beginning to end. For example, in Paramount

Land Company LP v. California Pistachio Commission,

491 F. 3d 1003, 1011-12 (9th Cir. 2007), the Ninth

Circuit held that a nongovernment entity created

government speech even though the Secretary of Agriculture had less appointment and removal powers over

that entities members as compared to the Secretary’s

appointment and removal powers in Johanns.

When determining whether government speech

exists, the Ninth Circuit emphasized effective, that is,

potential control. See Paramount Land, 491 F.3d at

1011; Johanns, 544 U.S. at 560. A failure to “reject[ ] or

edit[ ] proposals” or to take a particularly active role in

meetings” is “not an indication that the government

cannot exercise authority,” and does not preclude a

App. 54

Court from ruling that the government effectively

controls that speech. Paramount Land, 491 F.3d at

1011; see also Delano Farms, 586 F.3d at 1230 (noting

that the proper test for determining effective control

focuses on potential control, “not the actual level of

control evidenced in the record”). Instead, the question

is whether the government “retains authority to control both the activities and the message.” Paramount,

491 F.3d at 1011.

General Terms of Promotional Campaigns

Here, statutes and regulations “specif[y], in

general terms, what the promotional campaign shall

contain, and what they shall not.” Johanns, 544 U.S. at

561. QSBCs’ promotions must “advance the image and

desirability of beef and beef products” and may not

make “reference to a brand or trade name of any beef

product.” 7 U.S.C. § 2902(13); 7 C.F.R. § 1260.169(d);

see also Johanns, 544 U.S. at 561 (quoting these

provisions).

Answerability to USDA

QSBC members remain answerable to USDA

through the certification and decertification process. 7

C.F.R. § 1260.181. Through that process the Beef

Board, in concurrence with USDA, approves all

QSBCs. QSBCs may not obtain checkoff funds without

certification. Id. The Beef Board can similarly revoke

that certification and ability to receive checkoff funding.

App. 55

R-CALF claims that QSBCs are not answerable to

USDA, placing particular importance on the Government’s inability to appoint or remove anyone from the

QSBCs. R-CALF notes that “every entity the Ninth

Circuit and Supreme Court [have] held can use compelled subsidies to generate ‘government speech’ ” has

had some of its members appointed or removable by

the Government. (Doc. 90 at 17-18.) According to RCALF, “[i]t makes sense the absence of such authority

would be significant” here.

The presence of appointment and removal powers

proves significant, but the absence of those powers

proves quite little. The presence of appointment and

removal powers proves significant because appointment and removal of entity members stands as a quite

powerful way to ensure that those entities remain

answerable to the government. The absence of these

powers, however, proves insignificant, at least in this

case. No Ninth Circuit or Supreme Court opinion has

held that appoint and removal stand as the sole way

that entities remain answerable to government agencies.

Here, for example, QSBCs remain answerable to

USDA through the certification and decertification

power, in combination with USDA’s pre-approval over

all QSBC advertisements. Each board must meet certain certification requirements to receive funding. 7

C.F.R. § 1260.181. With USDA’s concurrence, the Beef

Board may use its authority to revoke certification

for failure to follow USDA requirements. USDA and

the Beef Board “retain[ ] [this] authority” and under

App. 56

Johanns that proves sufficient to demonstrate answerability. That USDA has used the decertification authority on at least one occasion only underscores the

usefulness of this power.

The certification process only proves useful for

making QSBC members answerable to USDA when

considered as one part of the whole scheme that USDA

uses to control QSBCs’ message “from beginning to

end.” Viewed in isolation, by contrast, the certification

power would prove relatively useless for keeping the

QSBCs answerable to USDA. In theory, QSBCs could

receive certification, then develop their ads, disseminate them, and only then get decertified. But by that

time, the damage will have been done to R-CALF and

those whose speech was compelled. Without more, the

certification and decertification power do quite little to

make QSBCs answerable to USDA without allowing

QSBCs to harm R-CALF.

When considered as one part of the whole, however, this problem with the certification process

disappears. As discussed above, under the MOUs that

USDA entered into with QSBCs, USDA now retains

complete final approval over all QSBC ads. This final

approval gives USDA the option to exercise its authority to decertify a QSBC before the QSBC ever gets

the chance to disseminate advertisements. The MOUs

all but make this explicit. (See, e.g., Doc. 133-1 at 4 (“If

at any time [Vermont’s QSBC] fails to comply with the

terms of this MOU, . . . [USDA] may direct the Beef

Board to de-certify [Vermont’s QSBC.”) That proves

enough to make QSBCs “answerable” to USDA.

App. 57

This Court acknowledges that the certification

process makes QSBC members less answerable to

USDA than the Beef Board officials in Johanns. As

noted earlier, however, the Ninth Circuit has not

treated any one particular characteristic present with

the Beef Board in Johanns as a floor that other entities

must satisfy. See Paramount Land, 491 F.3d 1003

(upholding organization where Secretary of Agriculture had less appointment authority over board members than in Johanns).

Participation in Open Meetings

Under the MOUs, USDA retains the authority

to participate in open meetings. (See, e.g., Doc. 133-1

(noting that Vermont Beef Industry Council must provide USDA with notice of their meetings as well as

meeting minutes and additional information related to

those meetings as USDA requests).

Final Approval

This Court previously held that USDA did not

have effective control because there was no evidence

that federal officials either participated in the creation of QSBCs’ advertising campaigns or that USDA

approved every word of those campaigns. See R-CALF

v. Vilsack, 2016 WL 9804600, at *5 (D. Mont. Dec. 12,

2016). Simply put, Johanns requires control “from

beginning to end” and USDA had no control at the end

of QSBCs’ advertisement process.

App. 58

Since then, USDA and all QSBCs named in this

lawsuit have entered into MOUs that fix this problem. The Court continues to believe its first ruling

was correct, even though the Government tangentially

claims that it had effective control over the QSBCs’

advertising campaigns without the MOUs. (See Doc. 99

at 7-8.) The Government’s bare assertion carries no

weight because it relies exclusively on the MOUs to argue that USDA now retains “final approval authority

over every word used in every promotional campaign.”

(Doc. 99 at 11 (quoting Johanns, 544 U.S. at 561).) In

other words, USDA relies exclusively on the MOUs to

argue that the problem identified by this Court in its

first ruling has now been rectified. All fifteen states

named in this lawsuit have entered into MOUs with

USDA. (See Doc. 99 at 9 (Hawaii, Indiana, Kansas,

Montana, Nebraska, Nevada, New York, North Carolina, Pennsylvania, South Carolina, South Dakota,

Texas, and Wisconsin), Doc. 133 at 2 (Vermont), and

Doc. 134 at 2 (Maryland).) The Court will only reference the MOU with Vermont’s QSBC, but the MOUs

with the remaining QSBCs prove identical. (See Doc.

133 at 2.)

Under the MOUs, Vermont’s QSBC agrees to submit to USDA “for pre-approval any and all promotion,

advertising, research, and consumer information plans

and projects, which [USDA] shall review and approve

or reject.” (Doc. 133-1 at 3.) Also, Vermont’s QSBC

agrees “to submit for pre-approval . . . any and all

potential contracts or agreements to be entered into by

[Vermont’s QSBC] for the implementation and conduct

App. 59

of plans or projects funded by checkoff funds.” (Id.)

The MOU gives broad pre-approval authority, without

much, if any, limitation. At bottom, QSBCs face the

choice of getting USDA approval or not speaking at all.

That constitutes final approval of authority “over every

word used in every promotional campaign.” Johanns,

544 U.S. at 561.

R-CALF maintains that the Government does not

ensure that QSBCs’ speech reflects the Government’s

views. (Doc. 90 at 20-22.) R-CALF’s argument boils

down to this: the Government does not take enough

involvement in the QSBCs’ speech.

This argument misconstrues the government

speech standard outlined in Johanns. See Johanns,

544 U.S. at 563. As discussed above, the test is whether

the government “retains authority” to control the

speech, not whether the government actually exercises

that authority. So if USDA simply acts as a rubberstamp for QSBC advertisements, that fact proves

irrelevant as long as USDA retains the broad authority

in the MOUs.

The distinction drawn in Delano Farms between

actual authority exercised and retained authority

makes sense when considering the hallmark of government speech: political accountability. The Courts

have held that government speech does not implicate

the First Amendments compelled speech protections

because “[w]hen the government speaks, . . . it is,

in the end, accountable to the electorate and the

political process for its advocacy.” Bd. of Regents of

App. 60

Univ. of Wis. Sys. v. Southworth, 529 U.S. 217, 235

(2000). Similarly, a failure to exercise authority to

control speech from the QSBC is a failure of USDA,

an agency headed by the “Secretary of Agriculture, a

politically accountable official.” Johanns, 544 U.S. at

563. As long as R-CALF complains about a failure to

exercise authority, it can rectify that complaint by

holding USDA politically accountable. Only if USDA

has no authority to exercise in the first place does RCALF lose the ability to rectify its problems in the

political arena.

Finally, R-CALF contends that speech from the

QSBCs is private speech because QSBCs present it as

private speech. (Doc. 24-27.) The Court addressed and

rejected this argument in Johanns: “We need not determine the validity of this argument—which relates to

compelled speech rather than compelled subsidy—

with regard to respondents’ facial challenge. Since

neither the Beef Act nor the Beef Order requires

attribution, neither can be the cause of any possible

First Amendment harm.” 544 U.S. at 564-65.

Third-party Organizations

R-CALF maintains that QSBCs engage in private speech because it funds organizations with checkoff money and neither USDA nor the QSBCs have

authority to review what speech is made by those

organizations. (Doc. 99 at 22-23.) The Government

claims that it need only “exercise effective control over

QSBCs when they distribute checkoff dollars, ensuring

App. 61

that those expenditures are authorized by the Beef Act

and the Beef Order.” They further claim that “there is

no separate requirement that USDA exercise effective

control of every entity downstream from that disbursement.” (Doc. 99 at 19.) The Government counters that

no case law requires USDA to exercise control over

downstream entities that receive money from QSBCs.

(Id.)

The Government has the stronger argument. RCALF offers no rationale to explain why QSBCs may

not pay for membership in organizations like the

Federation of State Beef Councils or the U.S. Meat

Export Federation. To hold otherwise, raises the “risk[ ]

[of ] micro-managing legislative and regulatory schemes,

a task federal courts are ill-equipped to undertake.”

Paramount Land, 491 F.3d at 1012. This Court is

ill-equipped to parse budget line items from QSBCs

to determine whether that particular contribution

constitutes a compelled subsidy. To the extent that RCALF argues that these contributions represent a

potential end run around the pre-approval process in

the MOUs, those concerns are minimized by USDA’s

approval of QSBCs budgets.

Injunction Even Under MOUs

R-CALF argues that it should receive an injunction even if QSBCs engage in government speech. It

argues that under the Ninth Circuit’s mootness

doctrine that it is “entitled to the protection of an

enforceable order to ensure that past [constitutional]

App. 62

violations will not be repeated.” (Doc. 111 at 37-38

(quoting Barnes v. Healy, 980 F.2d 572, 580 (9th Cir.

1992)).) The Government maintains first that mootness doctrine doesn’t apply because R-CALF would not

have standing if this Court finds that QSBCs make

government speech. The Government also argues that

even under Ninth Circuit’s mootness case law that the

Government is entitled to greater deference than a

private party regarding whether a party can moot a

case by changing its actions that caused the alleged

constitutional violation. (Doc. 125 at 16-17.)

Assuming R-CALF has standing, R-CALF still has

not demonstrated that an injunction would prove necessary at this point. A party may receive an injunction

in a moot case “where there is ‘no reasonable . . .

expectation that the alleged violation will recur,’ and

where ‘interim relief or events have completely and

irrevocably eradicated the effects of the alleged violation.’ ” Am. Cargo Transp., Inc. v. United States, 625

F.3d 1176, 1179 (9th Cir. 2010) (quoting Cty. of Los

Angeles v. Davis, 440 U.S. 625, 631 (1979)); see Barnes,

980 F.2d at 580 (citing the same standard as outlined

in Davis). But mootness does not treat private parties

and the government equally. Courts have routinely

given government agencies greater leniency when

considering whether the party may resume its illegal

or unconstitutional activities. See Am. Cargo Transp.,

Inc., 625 F.3d at 1180 (collecting cases). The Court sees

no reason here to assume the Government entered

these MOUs as merely a way to avoid an adverse result

in this Court.

App. 63

Motion to Strike

R-CALF also moved to strike both DefendantIntervenors’ and the Government’s individual Responses to Plaintiff ’s Statement of Undisputed Facts

(“RSUFs”). (Doc. 114 (seeking to strike portions of Doc.

97 and Doc. 101).) The Court has recommended

resolving this case at the summary judgment stage. In

doing so, the Court decided which facts were material

and whether those material facts were in dispute. RCALF’s motion proves moot.

RECOMMENDATIONS

Accordingly, this Court RECOMMENDS that the

district court:

1.

Plaintiff ’s motion for summary judgment

(Doc. 89) should be DENIED;

2.

Plaintiff ’s motion to strike (Doc. 114) should

be DENIED, as moot;

3.

Defendant Sonny Perdue, in his official capacity as Secretary of Agriculture, and the United

States Department of Agriculture’s cross motion for summary judgment (Doc. 98) should

be GRANTED;

4.

Defendant-Intervenors Montana Beef Council, et al.’s cross motion for summary judgment (Doc. 94) should be GRANTED.

App. 64

NOTICE OF RIGHT TO OBJECT TO

FINDINGS & RECOMMENDATIONS AND

CONSEQUENCES OF FAILURE TO OBJECT

The parties may file objections to these Findings

and Recommendations within fourteen (14) days after

service (mailing) hereof. 28 U.S.C. § 636. Failure to

timely file written objections may bar a de novo

determination by the district judge and/or waive the

right to appeal.

This order is not immediately appealable to the

Ninth Circuit Court of Appeals. Any notice of appeal

pursuant to Fed. R. App. P. 4(a), should not be filed

until entry of the District Court’s final judgment.

DATED this 29th day of January, 2020.

/s/ John Johnston

John Johnston

United States

Magistrate Judge