RANCHERS CATTLEMEN ACTION LEGAL FUND UNITED STOCKGROWERS OF AMERICA V. THOMAS VILSACK in his Official Capacity as Secretary of Agriculture; UNITED STATES DEPARTMENT OF AGRICULTURE

San Francisco, CA - Agricultural lawyer represented

Plaintiff-Appellant with a summary judgment in favor of federal defendants and state intervenor defendants in an action brought by the Ranchers-Cattlemen Action claim.

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 Research Board (the "Beef Board”),

whose members the Secretary appoints. Id. § 2904(1).1 A

QSBC typically collects the checkoff, retaining 50 cents to

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).

R-CALF V. VILSACK 7

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 promotional

materials. Some engagements involve contracts. Under the

MOUs, the Secretary must pre-approve 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

8 R-CALF V. VILSACK

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 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 preapproval 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

R-CALF V. VILSACK 9

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 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

10 R-CALF V. VILSACK

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” 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 approval authority

over every word used in every promotional campaign.'”

Paramount Land Co. LP v. Cal. Pistachio Comm'n, 491 F.3d

R-CALF V. VILSACK 11

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 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

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).

12 R-CALF V. VILSACK

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 preapproval” 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 "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.

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.

R-CALF V. VILSACK 13

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 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

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 . . . 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).

14 R-CALF V. VILSACK

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 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

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.

R-CALF V. VILSACK 15

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 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

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).

16 R-CALF V. VILSACK

injunction was needed because the MOUs mooted RCALF'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 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).

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 RCALF’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 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

R-CALF V. VILSACK 17

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.



AFFIRMED